SURE KAMHUNGA: Ramaphosa has no time to waste

President Cyril Ramaphosa, who must have heaved a sigh of relief at his re-election for a second term as ANC president, doesn’t have the luxury of time to tinker with solutions for a wobbly economy facing significant structural challenges.

The country’s problems are well documented: sluggish growth in the past decade, rising unemployment and poverty, an investor strike, a power crisis, dysfunctional municipalities and infrastructure decay.

The economy struggled to achieve the minimum 5% GDP growth needed to put a dent in what is one of the world’s highest unemployment rates. Covid-19 made it harder to grow the economy, and as if this wasn’t enough the July 2021 riots and the worst floods in six decades in KwaZulu-Natal in early 2022 didn’t help.

But it has not been all gloom. The economy grew 1.6% in the third quarter, due largely to the contribution of key sectors such as mining, agriculture and manufacturing. Unemployment slowed, though slightly. Some retail, vehicle manufacturing and ICT companies have been announcing big ticket investments, a sign of improved investor confidence in the economy.

Investors responded enthusiastically to reform in the energy sector as evidenced by bids from independent producers after the removal of the licensing threshold for renewable energy projects. But these nascent green shoots of progress are not enough. More is needed.

Since his re-election as ANC president, Ramaphosa has the political mandate to push through accelerated reforms across the broader economy, deal more decisively with corruption and focus on ailing state-owned enterprises, with a particular sustained focus on Eskom and Transnet.

Business leaders and organisations have been pushing for faster reform, and complained repeatedly about policy and regulatory failure and tardiness. They are critical of slow government decision-making, inadequate consultation and (when it happens) its failure to incorporate or implement suggestions from business. They also complain about policies made without prior consideration of the impact on business, which has at times led to business threatening to seek judicial review.

These things complained of shouldn’t be happening, given Ramaphosa’s  repeated commitments and pledges to be consultative and inclusive in government’s approach to solving problems. But promises can be hollow if not followed up by practical solutions or implementation. And this is what has been happening.

That is why Ramaphosa should use the political lifeline of a second term as ANC president to demonstrate decisiveness, urgency of purpose and action and, through a soon to be reconfigured cabinet, implement structural reforms that will lay the groundwork for sustainable and inclusive growth.

Some of his ministers have been accused of policy and leadership ineptitude and being wholly responsible for some of the problems facing state-owned enterprises. This is the perfect opportunity for Ramaphosa to choose a winning cabinet team of energetic ministers with a strong grasp of the challenges we face and clear ideas on what they need to do.

Ramaphosa will be judged by the team he chooses and results they produce. He doesn’t have the luxury of time, nor much political space to go on tinkering with solutions. He faces an unenviable yet perfect opportunity to  cement his leadership and create a legacy that will live beyond his second term as president of the country, assuming the ANC has a parliamentary majority after the 2024 general election.

The country is not short of plans or ideas to address its economic challenges.  Nor does it lack a private sector that is willing and able to invest in job creating opportunities.

What the country needs most urgently now is a political leadership that has a clear understanding of what must be done to achieve growth, reduce unemployment and inequality and improve living conditions of more than 30-million people living in poverty — and the courage to be decisive.

To move forward, the government must immediately address the crippling power crisis with Eskom implementing the worst rolling blackouts since 2008, and no immediate signs of improving. Eskom admits that forced daily power cuts will continue for the next six to 12 months, if not longer, before there is any relief.

Eskom is now the single largest risk and threat to economic growth. The longer it takes to improve generation capacity the higher the risk of economic losses from disruption of business activity. Investors want reliable and cost-effective energy, which Eskom fails to supply. While there is progress in securing renewable energy sources, this will not be achieved  overnight. This is why it is important for Eskom’s problems to be addressed with greater urgency.

Infrastructural decay and inefficiency, particularly with ports, roads and railway networks, is a major concern, and severely affecting exporting sectors such as mining and agriculture. That the situation at Transnet ports and rail system was left to decline to its current state speaks volumes on poor policy and management, for which the line ministry must take political responsibility. 

As Ramaphosa considers his in-tray for 2023 he shouldn’t feel overwhelmed but rather see it as an opportunity to make the right decisions and demonstrate greater urgency. If not for his own legacy, for the future of the country and its people. The time to act is now, or history will forever judge him and his administration harshly.

• Kamhunga is a former financial journalist now working in corporate communications.