Business, markets fear Ramaphosa will be hamstrung
'We call on the newly elected leadership of the ANC to immediately occupy itself with a clear and practical programme of action'
Business and markets’ optimism about a victory for Cyril Ramaphosa in the ANC’s leadership race has been tempered by the three members of the Zuma camp in the party’s new top six.
Cyril Ramaphosa was elected to succeed Jacob Zuma as the party’s president, with David Mabuza as his deputy. Gwede Mantashe, formerly secretary-general, returns as chairman. Jessie Duarte retains her post as secretary-general, and Free State chairman Ace Magashule becomes secretary-general.
The rand gave back a chunk of Monday’s gains on Tuesday morning. BayHill Capital MD Geoff Blount said markets had priced in “a Cyril slate victory, rather than a hung national executive committee (NEC)”.
Economist Dawie Roodt said investors might consider investing in SA again but he doubted Ramaphosa would be able to turn the country around.
“He will not be held back by his own ability‚ but the ability of his organisation … I think the DNA of the ANC is poisoned‚” said Roodt.
“It is not as if the state’s debt is gone. We still have one of the worst education systems in the world. We still have a swollen public service that is paid hopelessly too much.”
Chamber of Mines CEO Roger Baxter said: “The newly elected president of the ANC and members of the national executive committee have a considerable task at hand and, on behalf of the mining industry, we wish them well.
“We hope to see a renewed focus by the ruling party on responsible and ethical leadership in the national interest across all sectors of the economy and at all levels of society. The future of SA and its people depend on it.”
The chamber, whose members represent 90% of SA’s annual mineral output by value, is locked in two court battles with Zuma’s appointee as mineral resources minister, Mosebenzi Zwane, and the Department of Mineral Resources over ownership aspects of the first two mining charters, and the review and setting aside of the third charter Zwane introduced in June.
The chamber and department are awaiting a declaratory order on the ownership aspects of the first two charters, which spell out transformation objectives for mining companies, deciding whether the industry body is right in its assertion that past deals count towards 26% black ownership levels, something the department disputes.
The review of the third charter, which Zwane has suspended pending a ruling from a full panel of three judges, will be heard in mid-February. The impasse over the charters and incomplete amendments to the Mineral and Petroleum Resources Development Act during Zuma’s tenure have contributed to the uncertainty dogging the local industry and skewing the perception of SA as a mining investment destination.
Ramaphosa’s history in the sector — as head of the National Union of Mineworkers (NUM) and, more recently, on Lonmin’s board, will give the sector reason to hope for some pragmatic and less hostile dealings with the ANC and, by extension, government.
Business Unity SA (Busa) CEO Tanya Cohen said South Africans “are looking for clear signs of consistent, ethical and accountable leadership, acting in the best interests of the country”.
“We call on the newly elected leadership of the ANC to immediately occupy itself with a clear and practical programme of action that will address the country’s declining fiscal and macroeconomic position.
“Business also expects the leadership of the ANC to embrace the opportunity of strengthening the strategic partnership between government, business and organised labour by using Nedlac more effectively for robust engagements on national issues such as youth employment; the national energy plan; stimulating small business growth; addressing the crises at many state-owned enterprises; and restoring good governance and accountability in the public and private sector,” she said.
Business Leadership South Africa (BLSA) wants the ruling party to focus on inequality‚ unemployment and poverty by growing an “inclusive” economy to create jobs.
“For this to happen‚ we require regulatory certainty and policy stability that will accelerate and deepen transformation.”
Black Business Council secretary-general George Sebulela said: “We are positive that the new leadership will contribute hugely to creating an environment that is conducive for radical socioeconomic transformation and job creation in the country.”
Economics professor Raymond Parsons, of the North West University, said the ANC leadership was at a possible “tipping point” for creating jobs and growing the economy.
“This is essential in order to underpin future ‘radical socioeconomic transformation’. The South African economy is presently not in a good space and needs urgent economic changes to realise its true potential.”