South African President Cyril Ramaphosa is hamstrung by politics and the economy is suffering the consequences.<\/p>\n
His narrow win to become leader of the ruling African National Congress in December 2017 has left him dependent on the left — the unions and the South African Communist Party that are ANC allies and helped him become party president.<\/p>\n
Now the same labor movement that he worked to strengthen almost four decades ago as an anti-apartheid activist stand in the way of reforms needed to revive the economy.<\/p>\n
\u201cIt\u2019s difficult to please market forces while he has got these allies,\u201d said Ntsikelelo Breakfast, a politics lecturer at the University of Stellenbosch. \u201cThere are people holding him back.\u201d<\/p>\n
Left-leaning senior members of the ANC say they back him against supporters of ousted President Jacob Zuma and party secretary-general, Ace Magashule, because they can see the damage that\u2019s been done to the economy. Magashule is the highest-ranking party official allied to Zuma and has publicly contradicted the president on policy.<\/p>\n
But Ramaphosa\u2019s powerful labour backers are opposed to the job cuts needed to help rescue indebted state power utility, Eskom Holdings SOC Ltd., and to trim a bloated government wage bill. Similarly, selling loss-making state-owned companies is off the table, forcing the government to add to debt to bail them out.<\/p>\n
Business leaders, criticised by the media for remaining quiet despite damaging policies during Zuma\u2019s presidency, have begun to speak out. The country\u2019s biggest business lobby told its members last week that the government has no political will, no sense of urgency and, unless it changes its ways, will be forced to seek relief from the International Monetary Fund.<\/p>\n
\u2018Wrestling Match\u2019<\/strong><\/p>\n The government has already had to commit R128 billion ($8.3 billion) to keep Eskom running and has tough choices to make around its R440 billion of debt. The national airline, broadcaster and arms company all need money.<\/p>\n Those pressures at a time when economic growth can\u2019t reach 1% may cost the nation its last remaining investment grade rating at Moody\u2019s Investors Service, sparking billions of dollars in outflows.<\/p>\n While Ramaphosa and his closest allies know what needs to be done to revive the economy, from restructuring Eskom to easing onerous work visa rules for skilled immigrants, they haven\u2019t reached an agreement with the labor unions, said a senior business leader who has discussed the issues with Ramaphosa. The person declined to be identified as the talks were private.<\/p>\n Both the National Union of Mineworkers, the union Ramaphosa founded and an affiliate of the 1.8 million-strong Congress of South African Trade Unions, and the National Union of Metalworkers of South Africa, part of the 800,000-member South African Federation of Trade Unions, have threatened to bring Eskom to a halt if there are mass job cuts.<\/p>\n Saftu was formed in 2017 from unions that broke away from Cosatu and is opposed to the ANC. That schism makes it less likely Cosatu will compromise on job cuts because it fears losing its dominance, the business leader said.<\/p>\n \u201cThe wrestling match over the ANC tiller is now essentially between a hard-left faction and aggressive racial nationalist faction all under the supervision of a captain who cannot break the deadlock or inspire a third way,\u201d the Johannesburg-based Centre for Risk Analysis said in a report it gives to clients.<\/p>\n Ramaphosa \u201cbelieves, fatally in our view, that maintaining unity among the crew is a priority,\u201d it said.<\/p>\n Distracting Cases<\/strong><\/p>\n Ramaphosa is battling on several fronts.<\/p>\n Magashule, one of the top party leaders, is pushing for the nationalisation of the central bank and quantitative easing to pay off debt. While Ramaphosa received a boost from Zuma\u2019s dwindling influence in the ANC, the secretary-general\u2019s opposition and legal battles have narrowed the room to act.<\/p>\n The president and his public enterprises minister, Pravin Gordhan, are challenging cases filed against them by the state anti-graft ombudsman, viewed by critics as being aligned with Zuma and Magashule. Busisiwe Mkhwebane has denied the allegation.<\/p>\n The 86-member ANC National Executive Committee is seen by analysts as evenly split between supporters of Ramaphosa and Magashule. While the cabinet is weighted toward his allies, Ramaphosa secured support from the left by appointing former union leaders to the trade, labor and minerals and energy ministries.<\/p>\n Ramaphosa\u2019s instinct is to build consensus, and he would be hesitant to be the leader who presided over the breakup of the 107-year-old ANC. The irreconcilable differences between the two factions in the party may make that difficult.<\/p>\n \u201cTime is not on his side, he is damned if he does and damned if he doesn\u2019t,\u201d said Claude Baissac, the head of Eunomix Business & Economics Ltd., a Johannesburg-based risk advisory firm. \u201cSomeone needs to make some bold decisions here.\u201d<\/p>\n
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