A month is a long time in politics, particularly when waiting to find out who will run the country

A month is a long time in politics, particularly when waiting to find out who will run the country.

But if capital markets are a barometer of success then South Africa’s new Government of National Unity was worth the excruciating wait required to birth the new-look cabinet.

The business community, both here and abroad, has reacted positively to President Cyril Ramaphosa’s executive appointments. A creeping optimism, no doubt some would call it premature, pervades the national discourse around the seventh administration, helped along by an ongoing load shedding reprieve – three months and counting. 

Gigabytes of online commentary and analysis since Ramaphosa’s Sunday evening announcement all share one dominant thread: finally we know who’s steering the ship.

Now we just need to figure out where we’re going.

Fortunately Ramaphosa’s appointments are broadly indicative of renewed urgency to accelerate economic growth, notably in the realm of energy and logistics, arguably the two biggest impediments to business success in recent years. The energy portfolio has been merged with electricity, and the Department of Public Enterprises has been scrapped altogether. There is also new leadership for the Departments of Transport and Public Works.

Most pundits have welcomed the reappointment of finance minister Enoch Godongwana who has largely resisted the urge to escalate government spending. 

However it remains to be seen how the new executive team will perform under difficult circumstances. In the words of one commentator: if the previous administration had to hit the ground running, this one will need a racing car just to keep up with their to-do list.

It is the Chamber’s view that a few choice interventions can garner significant results in the short term and restore confidence in both the economy and public administration. 

Immediate interventions should include the following: 

  1. Reduce the cost of government by introducing more public-private partnerships in critical spheres of government, particularly those underpinning economic performance. Allow the private sector to solve problems that currently absorb a large proportion of taxpayers’ money
  2. Improve the competitiveness and reliability of public sector infrastructure such as ports and rail networks. This is a prerequisite for sustained economic growth
  3. Rebuild a police force that can be trusted at all levels of society. If we cannot trust the police then we can’t expect to resolve the numerous law and order challenges eroding business confidence and overall quality of life
  4. Repurpose underutilised state properties, particularly adjoining small harbours that could serve as business incubators and job-creation ecosystems. Harness private sector innovation to rejuvenate these assets which are currently a maintenance burden
  5. Promote business-friendly trade and investment strategies that will attract foreign investors and restore private sector trust in South Africa’s trade policies.

In our view these few interventions could provide significant gains within five years and generate positive momentum while the new administration tackles longer term challenges such as education, healthcare and land reform. 

A month of backroom horse-trading and electoral pacts, harrowing as it was, will be time well spent if it translates into meaningful economic growth and stability.

John Lawson
CEO of the Cape Chamber of Commerce and Industry