Investors hope for faster reform in SA now President Ramaphosa strengthens grip on ANC

South Africa President, Cyril Ramaphosa

INVESTORS welcomed the suspension of one of the main party rivals of South African President Cyril Ramaphosa, but his reform agenda had been too slowly implemented, said Reuters.

Secretary General of the ANC, Ace Magashule, was suspended from the party last week in order he face charges of corruption. This is in terms of a ‘step aside rule that was introduced by the party’s leadership in 2017 but which had taken until now to bring about. Magashule was seen as Ramaphosa’s main party rival and he publicly contradicted Ramaphosa on policy issues in the past.

“It shows an element of steel that has been missing,” Adrian Saville, a fund manager and economics professor at GIBS business school in Johannesburg, told Reuters. Magashule denies the corruption allegations and has called the charges he faces flimsy.

Areas where reform is desperately needed in South Africa include energy. Currently, red tape still prevents big companies from generating their own power despite state utility Eskom regularly implementing outages, said Reuters.

“The direction of travel is the right one, but the speed has been slow,” said Pavel Mamai, partner and portfolio manager at London-based ProMeritum Investment Management.

Changes to visa rules affecting skilled migration and the release of radio frequency spectrum for telecoms firms are two other areas where the president had not met expectations, said Peter Attard Montalto, head of research at Intellidex who tracks reforms under Ramaphosa.

“Magashule’s suspension is an important step, but it does not shift the dial on reform,” he told the newswire. “Factional politics is not blocking policy.”