Breathing new life into the economy tops Ramaphosa’s ‘to do’ list – analysts

Cyril Ramaphosa, SA president

SOUTH African president, Cyril Ramaphosa, faces a multitude of tasks following his victory at the polls on May 8, but none are larger or more urgent than improving the country’s economic growth rate, said Reuters.

“We are going to do things differently, we are going to do things effectively. We are going to make sure we inject growth … we are going to invite investors,” Reuters cited Ramaphosa telling ANC supporters at a celebration rally earlier this week.

However, change of the type Ramaphosa speaks will not be immediate. “Economic growth is not something that you can declare. There are lots of puzzles,” said Enoch Godongwana, head of the ANC’s economic transformation sub-committee.

“There is the global aspect which you don’t have control over and investment decisions by third parties,” he said.

Godongwana also pinpointed the overhaul of Eskom, the debt-stricken power utility, as an urgent task for Ramaphosa’s new government. “Reforming Eskom will definitely gain momentum. That is something which government is serious about,” he said.

“It now all hinges on (Ramaphosa) quickly presenting a political agenda and initiating the urgently required reforms once he has formed a government,” Commerzbank analysts Ulrich Leuchtmann and Elisabeth Andreae wrote in a note on Monday. “…The country’s problems are complex and the new government is facing a Herculean task.”

Ramaphosa, who is due to be inaugurated on May 25, is also expected to trim the cabinet which, at some 30 ministers, is considered too large, especially for an economy that is struggling. With a majority of 58% of the vote, the ANC last week saw its share of the national election vote fall below 60% for the first time.

 

1 COMMENT

  1. Only businesses create jobs.

    The South African government seems to believe that, wealth re-distribution through taxing businesses and productive individuals and passing this on to non-productive individuals, is wealth creation?
    The government has become addicted to syphoning from the economy and is unable to stop itself.
    It does not have the incentive to breathe new life into the economy.

    The lack of rail infrastructure points to this.
    It is obvious that the trucking industry has expanded massively in the absence of rail support.
    The consequences of this are:
    1. Higher consumption of fuel leading to substantial government revenues through the fuel levy which constitutes a very large percentage of the fuel price.
    2. Increased road use leading to higher toll revenues.
    3. The apparent creation of jobs through owner/driver schemes.
    With consideration to these items, would it suite the government to provide efficient and functioning rail infrastructure?

    “Breathing new life into the economy” requires a focused effort to stop the easy feeding at the revenue trough, guaranteed by legislation and enforced by SARS.
    Stop interfering in business with various schemes and legislation which deny capable businesses access to contracts.

    Start understanding that the word wealth “re-distribution” does not work and start contemplating the fact that wealth “creation” is urgently required.

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