Frontline Africa Advisory

TAKING A LOOK AT KEY PRIORITIES FOR THE NEW GOVERNMENT

TAKING A LOOK AT KEY PRIORITIES FOR THE NEW GOVERNMENT

Presiding over the 6th democratic government, President Cyril Ramaphosa is faced with the unenviable task of reviving a stagnant economy that has been unable to  keep up with the growing needs of a growing South Africa such as decent employment and access to business opportunities for small players. During his inauguration speech, President Ramaphosa outlined some of the country’s key challenges as well as the priorities of the incoming government. These included the eradication of poverty, tackling corruption and decreasing unemployment. To achieve those priorities, government will need to take drastic measures and have a business unusual approach.

Corruption

By now we are aware of the extent of the rot that has infected our government, particularly state-owned enterprises. Not only has the state lost billions through mismanagement of SOEs, but it has also spent more billions ensuring that they stay afloat. Not only should the President occupy himself with cleaning up the mess he has inherited, but he needs to ensure that those responsible are held to account. That should serve not only as a deterrent to those thinking of embarking on similar activities in our state organisations, but to also restore those entities to a viable state to play their intended role in driving growth. The bolstering of the National Prosecution Authority with the appointments of Shamila Batohi and Advocate Hermione Cronje, who are considered impartial and competent, will ensure that those accused of corruption are dealt with without fear or favour.  With all the revelations, money and time spent on Commissions of Inquiry, the public wants to see some action being taken by the NPA to test those revelations in a court of law.

Cleaning up of SOEs

The resignations of the CEOs of Eskom and SAA are a major setback to the government’s narrative about bringing stability to key SOEs and rid them of the rot that has beset them. In their resignation letters, Mr Hadebe and Mr Jarana cited over-interference by government in the management of the companies, making the execution of their duties difficult. This does not bode well for the current government, as this smacks of past instances in the Zuma era, where political heads would involve themselves in operational matters. It is understandable that for SOEs to get back on track, there needs to be closer cooperation between government and company leadership. However, government must that they were hired based on their competence and should have been left to do their job with government playing a more oversight role than an active one, as insinuated by the departing CEOs.

Minister Gordhan and Minister Mboweni must not let their eagerness for the New Dawn to scupper their chances of overseeing a successful turn-around of SOE’s.

Unemployment

The unemployment rate in South Africa is at an all-time high since 1994. Recent statistics have revealed that the unemployment rate has increased from 27.1 to 27.6%. The incoming government needs to act with speed to find credible solutions to this growing problem, especially the increasing number of young people who are unable to find employment.

The reconfiguring of the Department of Labour to include employment in its mandate is an interesting development coming out of the elections. It will be interesting to see how government views its mandate in employment creation beyond creating an enabling environment for business to invest and create the jobs that he economy so craves. Perhaps the new mandate will include a long over-due review of the labour laws, which have been cited many times as an impediment to job creation, both by large and small businesses. The impact of these laws is especially critical for the small business sector which is rightly regarded as the backbone of this economy and key to our future growth and employment. So far, small business owners have only heard platitudes about their role in the economy without a corresponding effort to actually make life easy. 

Greater coordination of policy

Effective policy coordination and implementation lies at the heart of solving the country’s key challenges. The establishment of a Policy Analysis and Research Services unit by President Ramaphosa is intended to aid in policy development and coordination. The main task of the unit will be policy research, analysis and coordination. The main problem for South Africa has been ensuring that policies proposed by departments are not only geared towards achieving the government’s objectives but that they are complementary and do not work against each other.

President Ramaphosa has also ensured greater participation of business in finding solutions to our current problems. It is a sensible thing to do, given that business creates jobs and grows the economy and policies proposed by government should seek to support their efforts and ability to effectively contribute to our economic growth and not put stumbling blocks on their path.

Great policies and coordination efforts mean nothing without effective implementation.  It is often said that South Africa has some of the best policies in the world, however, the lack of effective implementation of those policies has seen the country regress and underperform its emerging market peers from the African continent and elsewhere.

No doubt the task ahead for President Ramaphosa is great, however he has demonstrated the will to tackle them head-on and if he maintains his ‘thuma mina’ attitude throughout his presidency, he will succeed, if not at least ensure the country is back to putting its best foot forward.

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