Ramaphosa’s report card
RECAP: THE PRESIDENT’S SUCCESSES AND FAILURES
South Africa’s unemployment rate increased since Ramaphosa took power.
Cyril Ramaphosa came to power two years ago pledging a new dawn of reforms, economic growth and jobs. The president will deliver his fourth State of the Nation address today with a mixed bag of results. Here is a recap of his successes and failures:
Economy
In his first speech Ramaphosa conceded that the economy was not expanding fast enough to reduce poverty. While he didn’t set growth targets, his 2017 campaign to take over the ANC leadership centred on an economic recovery.
“The need for a social compact in South Africa, where all stakeholders concede to enduring some of the short-term pain has never been more urgent,” said Sanisha Packirisamy, an economist at Momentum Investments.
The president’s efforts to bolster growth are being hampered by internal battles in the ANC and powerful labour unions who are opposed to cuts in government spending and state jobs.
Jobs
South Africa’s unemployment rate increased since Ramaphosa took power. It’s at an 11-year high and could climb even further after companies including Telkom and Walmart’s local unit Massmart announced thousands of potential job cuts this year.
Ramaphosa has made good on commitments to put youth at the centre of his agenda with the launch of the Yes4Youth initiative, which seeks to create one million job opportunities for young people, as well as a jobs summit that aimed to create 275 000 positions a year. However, the results haven’t been forthcoming.
One of the labour-market successes he could count, is the introduction of a national minimum wage. Furthermore, the Labour Relations Act was changed to make it illegal to embark on a strike action before conducting a secret ballot of members, a step employers have long called for.
Investments
Ramaphosa launched “a major push to encourage significant new investment” with the start of an investment summit in 2018. He has since hosted two such events and his plan to raise $100 billion (about R1.4 trillion) in five years has already reached almost 50% of its target, according to his administration. Not all of the money pledged by companies including Sappi, BMW and Ford Motors is new and some of it will come from state institutions such as the Industrial Development Corporation.
State-owned companies
While Ramaphosa kept his promise to address governance issues at state-owned companies, most notably with the appointment of Andre de Ruyter as permanent chief executive officer of Eskom, the financial crises at many of the firms continue.
Plans to split Eskom into three separate units and reorganise its R454 billion debt pile are yet to be finalised.
A turnaround plan for loss-making South African Airways, which includes the scrapping of some routes, faces opposition from government and labour unions.
Policies
The November 2018 announcement of the new Automotive Production and Development Plan that will take effect next year fulfilled some of the president’s pledges to boost investment in key manufacturing sectors.
The same can’t be said for the Mineral and Petroleum Resources Development Bill, which Ramaphosa said two years ago would be “reasonably finalised” in the first quarter of 2018. It is yet to be signed into law. – Bloomberg