FT: Ramaphosa cornered as growth stalls and Washington turns hostile
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Ramaphosa faces pressure at home after Oval Office clash with Trump
Budget finally passed, calming fears over coalition stability
BEE laws under scrutiny as Musk pushes for investor-friendly reforms
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By Alec Russell and Monica Mark in Johannesburg and David Pilling in
London
A few hours before South Africa’s President Cyril Ramaphosa was subjected to a litany of false and embroidered charges by Donald Trump live on TV in the Oval Office, back in Cape Town a more orderly but perhaps more significant debate reached a climax: the country’s parliament finally passed a highly contested budget.
It was the third attempt. Two previous budgets had been shot down over disagreements between the two main political parties, the African National Congress and the Democratic Alliance, in the year-old government of national unity.
Each time, the financial markets were rattled over fears that the coalition might collapse — scuppering what investors see as the best chance in years for a business-leaning government. So the budget’s passing was a vital moment for investor confidence.
The big question is which of last week’s two meetings — one in the White House; the other in parliament — will have the greater long-term impact on South Africa’s trajectory. The walls are closing in on the 72-year-old Ramaphosa at home and abroad, with a hostile US, a stagnant economy and radical populist parties hovering in the wings.
Millions of South Africans watched the White House showdown live on their phones, as the US president repeated the lie, first propagated in his first term in office, that the white Afrikaner minority faces “genocide”.
Members of Ramaphosa’s entourage argue the visit went better than the fracas indicated. Two prominent Afrikaners, Johann Rupert, the billionaire founder of the luxury goods company Richemont, and John Steenhuisen, head of the DA party, did their best in the Oval Office to present a more accurate picture. “I think we leave better than we came in,” Steenhuisen tells the Financial Times.
Progress was made towards a vital trade deal with America to head off the threat of 30 per cent tariffs, officials insist; with unemployment over 40 per cent, tens of thousands of jobs may depend on this.
But many businesspeople are less sanguine, fearing that the spectacle did serious harm to South Africa’s image, however much the claim of genocide has been debunked. “This was awful for brand South Africa, for tourism and investment,” says a leading corporate figure.
Investors were delighted last June by the formation of the unity government and the inclusion of the market-friendly DA, ending 30 years of solo rule by the statist ANC. It was hailed as a fresh start after more than a decade in which the former liberation movement had been mired in corruption scandals and presided over an erosion of public services.
One year on, with the economy growing at a little more than 1 per cent, optimism is waning. Now business leaders are arguing that the White House showdown has to be a catalyst for a new approach. They also hope Ramaphosa has returned aware of the need to act more decisively to open up the economy and keep populists on the back foot.
Hendrik du Toit, chief executive of the Anglo-South African asset management firm Ninety One, does not mince his words. While he praises South Africa’s unified stance in the White House, he believes “the wisdom of going there” is open to question.
“What South Africa has to do now is move on and focus on how we can grow our economy,” he says, pointing to the appallingly high rates of violent crime and calling for a clampdown on corruption and an investment in education. “South Africa is on the brink of an economic emergency,” he adds, citing statistics suggesting 60 per cent of workers below the age of 24 are jobless.
The country is “grinding through its challenges”, du Toit says. But he worries that other developing economies are adapting better to a fast-changing world.
He goes on: “In the White House I saw a clear understanding there are threats from the populists in South Africa which need to be dealt with and that we are starting to face up to our challenges . . . The big question is for our president: Mr President, what is the next step?”
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