The president has been busy. He’s finally signed off on the board of the South African Broadcasting Corporation (SABC) after an embarrassing and clumsy late attempt by the ANC to kick former head of news Phathiswa Magopeni off the list of board members recommended by parliament.
How awkward was that legal advice obtained by parliament which effectively schooled the president on the doctrine of the separation of powers and limits of his? If I were Cyril Ramaphosa I’d be on the market for new legal advisers after that amateur hour.
He also found time to sign off on the Electoral Amendment Act, ignoring cries by civil society organisations that the bill submitted to him for assent — allowing independent candidates to stand in provincial and national elections — deviated from the ruling of the Constitutional Court on this crucial matter. Seeing that this is headed for litigation once more, it will be interesting to see if the apex court grants direct access to those planning to challenge the act. The integrity of next year’s elections rests on a speedy resolution of this issue.
Last week I joined businesspeople and government officials for the fifth edition of the Invest in South Africa Conference at the Sandton Convention Centre. This is the president’s baby, having launched these shortly after assuming power. He was beaming from ear to ear at news that the target of R1.2-trillion in investments he set in 2018 had been exceeded by R300bn. The new target for the next five years is R2-trillion.
Ramaphosa can thump his chest and declare victory, but the truth is this R1.5-trillion has not made a dent in the economy. All indicators are pointing downwards. Economic growth has been revised down to 0.2% for 2023, 1.0% in 2024 and 1.1% for 2025 by none other than the SA Reserve Bank. That’s not enough to reverse a dangerously high unemployment rate. This “investment victory” has not moved the needle an inch.
I went to the convention centre expecting to rub shoulders with captains of industry and top executives in the private sector, but I was mostly bumping into government officials in its elongated corridors. Don’t get me wrong, there were a lot of corporate suits in the crowds, but my inkling is many c-suite execs who matter chose to give this party a miss.
I don’t blame them.
When Ramaphosa kicked these off in 2018, business leaders arrived enthused with hope and armed with open chequebooks. Here, finally, was a president willing to fix structural weaknesses in the economy. They would meet him halfway by unlocking new investments or expand existing ones.
All they wanted in return was for structural impediments to growth done away with.
Granted, the administration did respond with a solid economic recovery and reconstruction plan. It held lofty promises.
Among these were achieving sufficient, secure and reliable energy supply within two years by significantly increasing the contribution of renewable energy sources to the grid. Unlocking more than R1-trillion in infrastructure investment. Reversing the decline in manufacturing and promoting re-industrialisation through exports. Granting third-party access to the rail network. Stimulating tourism and reducing data costs for South Africans.
This is the real tragedy of the South African economic story under Ramaphosa, and no glitzy investment talkshop is going to gloss over these failures.
Three years later, these and other promised reforms are stuck in limbo. The great bureaucratic inertia has set in.
Eskom is implementing stage 6 of load-shedding because the coal-power reliant grid simply cannot cope and is collapsing. Only in December did energy minister Gwede Mantashe conclude power purchase agreements with 13 preferred bidders under the Renewable Energy IPP Procurement Programme (REIPPP) Bid Window 5, to provide 975MW of renewable energy. But these will only be connected to the grid in 24 months.
Business says government is not investing in infrastructure development fast enough. This is a low-hanging fruit; every rand spent on new public construction projects has major multiplier effects and huge job creation potential. Our manufacturing sector keeps declining as a contributor to GDP; choked by underinvestment, shortage of skilled labour, regulatory rigidity and lack of reliable energy — all of which are conspiring to make our exports uncompetitive.
Transnet has joined Eskom as the biggest impediments to growth. Its inefficiencies are not just costly on export miners who have lost billions in sales of minerals that can’t get to the ports, but the fiscus has also lost out on additional tax revenue from the sector.
This is the real tragedy of the South African economic story under Ramaphosa, and no glitzy investment talkshop is going to gloss over these failures. Business sees right through it.
Attendees at the investment conference were treated to a mini fireworks display when the master of ceremonies announced that the president’s investment drive had exceeded its R1.2-trillion target.
But what exactly were they celebrating?
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