{"id":297594,"date":"2019-02-06T08:02:55","date_gmt":"2019-02-06T06:02:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=297594"},"modified":"2019-02-06T08:03:09","modified_gmt":"2019-02-06T06:03:09","slug":"politics-hinders-ramaphosas-bid-to-rouse-the-economy-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/297594\/politics-hinders-ramaphosas-bid-to-rouse-the-economy-in-south-africa\/","title":{"rendered":"Politics hinders Ramaphosa’s bid to rouse the economy"},"content":{"rendered":"

Politics is tying the hands of South African President Cyril Ramaphosa as he weighs policy trade-offs needed to rejuvenate a moribund economy.<\/p>\n

The labor union leader-turned businessman took office a year ago, shortly after winning control of the ruling African National Congress by a razor-thin margin. With a large party faction remaining loosely aligned to his predecessor Jacob Zuma, his political control remains tenuous.<\/p>\n

He\u2019s due to announce his policy programme and priorities in his second state-of-the-nation address on Thursday.<\/p>\n

While Ramaphosa\u2019s ascent to power initially boosted confidence and the rand after repeated policy missteps during the almost nine years Zuma was in charge, indexes tracking sentiment have retreated as reforms fell short of businesses\u2019 expectations.<\/p>\n

The government\u2019s decision to entertain the option of seizing land without compensation has been particularly damaging, even though it could help the ANC win over voters who may have backed the populist Economic Freedom Fighters in May elections.<\/p>\n

\u201cThe African National Congress is a brake on Ramaphosa doing what needs to be done,\u201d because he doesn\u2019t have a clear backing from the party\u2019s decision-making structures, Ivor Sarakinsky, a senior lecturer at Johannesburg\u2019s Wits School of Governance, said by phone.<\/p>\n

\u201cHe\u2019ll have to navigate his way around on an issue-by-issue basis and carefully.\u201d<\/p>\n

Ramaphosa can point to some successes – he\u2019s replaced the boards and top managers of state companies that have been dogged by corruption allegations, finalized new rules to provide certainty to the mining industry and convinced several local and international companies to back his drive to secure $100 billion in new investment.<\/p>\n

Challenges Remain<\/strong><\/p>\n

Yet major challenges remain, including trimming a bloated cabinet, resolving the land seizure debate without unduly spooking investors, taking unpopular steps to fix Eskom Holdings SOC Ltd, the state power utility which is on the verge of collapse, and following through on the ANC\u2019s resolution to implement a national health insurance scheme.<\/p>\n

The president said Tuesday the government will announce a plan for Eskom within days, pledged to ensure that land reform will be done in a responsible manner and undertaken to reduce the number of cabinet ministers after the vote.<\/p>\n

Fixing the power utility will be a test for Ramaphosa with the Congress of South African Trade Unions, a key alliance partner for ANC, having said it would oppose a move to split the company into separate units.<\/p>\n

Eskom expects a loss of around R20 billion ($1.5 billion) for the year through March and has about R419 billion of debt.<\/p>\n

His televised speech is due to begin at 7 p.m. in Cape Town.<\/p>\n

\u2018Strong Hand\u2019<\/strong><\/p>\n

Ramaphosa\u2019s ability to act decisively would be much enhanced should the ANC perform well in the elections, according to George Herman, chief investment officer at Citadel Investment Services. The party has won every election outright since the first multiracial one in 1994.<\/p>\n

\u201cWhere we stand, on a precarious level of economic growth, with a slowdown of economic growth in the global economy, we need a dedicated, committed, focused government to lead us through this phase,\u201d Herman said.<\/p>\n

\u201cWe need Mr. Ramaphosa to have a strong hand.\u201d<\/p>\n

Ramaphosa will need to implement measures that require \u201csome pain\u201d up front, with the benefits only materializing down the line, according to Sanisha Packirisamy, an economist at Momentum Investments.<\/p>\n

If he secures a strong mandate from the electorate, he can start implementing reforms reasonably soon \u201ceven though he might not be there in the presidency to bear the fruits once they actually starts to manifest in higher growth,\u201d she said.<\/p>\n

\"\"<\/a><\/p>\n

\n

Read: Ramaphosa wants to split Eskom in two: report<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Politics is tying the hands of South African President Cyril Ramaphosa as he weighs policy trade-offs needed to rejuvenate a moribund economy.<\/p>\n","protected":false},"author":59,"featured_media":297604,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[1164,26,3137],"class_list":["post-297594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-eskom","tag-headline","tag-momentum-investments"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/297594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=297594"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/297594\/revisions"}],"predecessor-version":[{"id":297610,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/297594\/revisions\/297610"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/297604"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=297594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=297594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=297594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}