An unemployment rate of 29%, an economy stuck in the longest downward cycle since World War II, chronic electricity shortages and soft business confidence \u2014 after 20 months running South Africa, patience is wearing thin with Cyril Ramaphosa\u2019s languid pace of reforms.<\/p>\n
There have been no shortages of policy papers, conferences and speeches outlining how to unlock economic growth, but the deeply divided ruling African National Congress and its labor union and communist allies have struggled to agree on a way forward.<\/p>\n
Bailouts for power utility Eskom Holdings SOC Ltd are draining the state\u2019s coffers and plans announced months ago to split it into three operating units and reorganize its $30 billion mountain of debt remain a work in progress.<\/p>\n
\u201cWe are desperate for some real action on Eskom,\u201d Neal Froneman, the chief executive officer of Sibanye Gold Ltd, the country\u2019s biggest private employer, said in an Oct. 25 interview at Bloomberg\u2019s Johannesburg office.<\/p>\n
\u201cYou have to make some tough decisions. It just blows my mind that we don\u2019t just get on and do it.\u201d<\/p>\n
The disenchantment is evident in the financial markets, with the rand down 20% against the dollar since Ramaphosa took office. The nation\u2019s bond yields are the highest of any country with an investment-grade credit rating.<\/p>\n
Ramaphosa said in a speech in London this month that plans to deal with Eskom\u2019s debt will be announced soon and he\u2019d found ways to stabilise the state\u2019s finances that will appease Moody\u2019s Investors Service \u2014 the only major rating company that doesn\u2019t classify the nation\u2019s debt as junk.<\/p>\n
Focus now shifts to Finance Minister Tito Mboweni, who may give more clarity when he unveils his mid-term budget on Oct. 30.<\/p>\n
The president has also pledged to cut red tape to promote investment and commerce and is targeting a top-50 position in the World Bank\u2019s rankings for ease of doing business within three years. South Africa slipped two places to 84th in the institution\u2019s latest list published on Oct. 24.<\/p>\n
Part of Ramaphosa\u2019s problem is that implementing reforms is difficult at the best of times, and these aren\u2019t the best of times.<\/p>\n
The president\u2019s hold on the African National Congress is tenuous and his administration lacks technical experience, said Ivor Sarakinsky, a lecturer at the University of Witwatersrand\u2019s School of Governance in Johannesburg.<\/p>\n
\u201cIt\u2019s very hard to turn complex organisations around and consensus is probably the best way in order to ensure sustainable results,\u201d Sarakinsky said by phone.<\/p>\n
\u201cIf he goes into these processes and uses the authority he has, he can alienate people who are sitting on the fence and push them over to the other camp.\u201d<\/p>\n
Besides the lack of clarity on plans to fix Eskom, investors remain in the dark about how a contentious ANC decision to change the constitution to make it easier to seize land without compensation will be implemented.<\/p>\n
Also, proposals made by the National Treasury in August that the state relinquish its near-monopoly of electricity, port and rail services and privatize assets were met with a lukewarm response from the ruling party.<\/p>\n
\u201cThere is disenchantment with the pace of change,\u201d Mcebisi Jonas, a former deputy finance minister and incoming chairman of telecommunications company MTN Group Ltd., said in an Oct. 24 speech.<\/p>\n
\u201cWe need a few measures of shock therapy to get the economy growing. It\u2019s not delivering more speeches, it\u2019s about doing.\u201d<\/p>\n
Debt Plans<\/strong><\/p>\n Finance Minister Mboweni notes that even when the government and ANC do take decisions, it doesn\u2019t follow through on them because the state lacks capacity.<\/p>\n \u201cIf at least we implement about 30% of the things which we say we\u2019re going to implement, we\u2019ll be making great progress,\u201d he said in a speech in Pretoria, the capital, on Oct. 17. \u201cWe have a problem in that the key economic actors are not moving in the same direction, they\u2019re pulling away from each other.\u201d<\/p>\n
\n