Intellidex analyst Peter Attard Montalto says that the last two weeks of load shedding will look like a “walk in the park” compared to the energy crisis that lies ahead for South Africa as fallout from the Phala Phala scandal weighs heavily on the country’s pathway out of the energy crisis.
Speaking to The Money Show on 702, the analyst said that the focus on Ramaphosa and the Phala Phala ‘farmgate’ scandal has thrust the country back to 2017, where the heated battle for the presidency of the ANC left many feeling like politics at South Africa was at a tipping point.
Political analysts see the current situation as a point of no return for the ANC and Ramaphosa. If he loses the vote in parliament and impeachment processes are launched against him, it would mark a historic turn for South Africa, where a sitting president will be subject to the full scrutiny of parliament.
It also puts his position as president in question, where many would expect him to step aside while the process is ongoing. What comes after this, is uncertain.
However, even if Ramaphosa survives the vote and the impeachment process is set aside, the president has been significantly weakened by the scandal, and it will make implementing reforms and policies far more difficult.
According to Attard Montalto, the rub of the situation is that it ultimately boils down to political blockages which already create so many problems in the country.
“If we’re honest, these are actually going to get worse next year under the status quo (Ramaphosa surviving),” he said.
“We now have a president who is surrounded by people who persuaded him to stay there – people like Gwede Mantashe will have more sway over energy policy, and those kinds of things are not positive for finding our way out of the current (energy) crisis.”
With the status quo continuing – which is the analyst’s baseline scenario – policy direction and reforms in South Africa are unlikely to happen. Without a significant shift in South Africa’s political landscape, the country will remain stuck.
“Do you have to go through the bottom to find your way to somewhere better? I think we have to pour some salt on that kind of scenario,” Attard Montalto said. “(The debate now is) how do you see a larger realignment of the body politic – not just party politics – in the country at large, to see the kind of reforms that are needed to solve something like the energy crisis?
“I think the last two weeks (of load shedding) are going to look like a walk in the park compared to some of the load shedding issues we’re going to see through next year,” he said.
Ultimately, Attard Montalto said that things are unlikely to change in South Africa, which means the country will continue to bumble along in a state of policy inertia and little to no reform.
“At the start of the year, the markets were looking for a reformist top six or a reformist NEC (for the ANC). That is not going to happen. There is no indication of that from the people that are running – from the composition of the NEC nominations.
“I think we’re largely going to see status quo in terms of a NEC that is not particularly policy wonkish, can’t take those long-term policy trade-offs. We’re going to see Ramaphosa re-elected but battling a more mixed top six and a more mixed NEC as well,” he said.