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JOHANNESBURG — With Zuma out of office, the focus will now shift to Ramaphosa’s swearing-in and, critically, the budget speech next week. The 2018 budget speech will probably be the most important of its kind in a post-1994 South Africa. The country is staring down the barrel of further downgrades to junk and a ballooning deficit and tax shortfall. Can Ramaphosa fix the mess and who will be his trusted finance minister going forward? Questions that will hopefully be answered in days and weeks to come. – Gareth van Zyl
By Dawie Roodt*
He may be gone but his reek will linger long after we have forgotten him. Getting rid of Zuma was only the beginning of a process to get this country back in shape again. His legacy is one of policy confusion, financial ruin, corruption, mismanagement and incompetence. Worst of all, he was a force of division and the reason for the return of that feeling of hopelessness.
I spoke to a few fellow South Africans last night, just after Zuma capitulated, and found it funny how such a divisive force could also be the reason for a new feeling of unity…
But, first things first. Our soon to be president, Cyril Ramaphosa, will now consolidate his political power base. That means appointing his own cabinet as soon as possible and then gradually weeding out other compromised individuals across the length and breadth of “the state”.
The second pressing issue is the budget. Ideally, he should appoint his “own” finance minister before the budget but, unless the budget is postponed — which is not a good idea, it’s probably better not to change the minister of finance, yet.
The timing of the political transition and the budget, actually creates a bit of a dilemma. The State of the Nation Address (SONA) is supposed to set the political scene for the year and the budget is then supposed to support and provide financial detail on how to achieve the president’s political vision. Much went wrong at finance recently.
Apart from a fiscus that has become financially totally unsustainable on many levels, Zuma recently decided to “move” the budgetary process to the presidency. That means that, if the budget is indeed delivered next week, it will be a Zuma budget — warts and all.
This is the dilemma with which we are faced: will it be Zuma’s budget or Ramaphosa’s? And it matters, because policy uncertainty was one of the hallmarks of the Zuma administration, except for fiscal policy which has always been clear and well documented in the form of the budget (although even treasury started crumbling recently).
The least disruptive approach is perhaps to continue with the Zuma budget and with the Zuma finance minister, for now, but to replace Gigaba and to amend certain aspects of the budget soon thereafter. Much needs to change regarding fiscal policy (I will write a follow-up note on this). The downside is that such an approach will add to policy uncertainty in the short term.
Once issues regarding the budget have been addressed, the next pressing matter will be policy. Who is this man Ramaphosa? What does he stand for? What is his vision? I guess some of this will be covered in his first SONA. Let’s hope we receive a message of liberty, of service delivery, of competence and of a total dedication to the well-being of South Africans — all of them. But then we need specifics on the way the state-owned enterprises (SOE’s) will be managed in future, the role of the state, Black Economic Empowerment (BEE), protection of private property rights, labour issues, and the list goes on and on…
You now have the power to do what is right, Mr President. Please don’t squander it.
- Dawie Roodt, Chief Economist of the Efficient Group.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.