Ramaphosa’s leadership tested as GNU struggles to deliver on renewed optimism: Justice Malala

After the euphoria of South Africa's unity government, cracks are beginning to show. Cyril Ramaphosa's coalition faces policy squabbles, stalled reforms, and an anaemic economy. While successes like Operation Vulindlela offer glimmers of hope, the president's indecisive leadership threatens to derail progress once again. Can Ramaphosa rise above party politics and take bold action, or will this be yet another missed opportunity?.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..By Justice Malala___STEADY_PAYWALL___.South Africa loves a bit of political euphoria..When President Cyril Ramaphosa took over in February 2018, a wave of optimism swept the country. Ramaphosa proclaimed that a "new dawn" of economic revival was afoot. Business and consumer confidence soared. The local currency strengthened by 20% against the US dollar in the following three months. Business leaders hailed the optimism — dubbed "Ramaphoria" by the press — as "being like 1994" when apartheid ended..Instead of swiftly implementing his economic reforms, Ramaphosa dilly-dallied and lost momentum as policy differences and leadership challenges mounted from opponents within his divided party, the African National Congress (ANC). His "new dawn" turned out to be a mirage. Annual real GDP growth in his first term averaged a measly 0.5% compared with 2.7% under Mandela in the late 1990s, 4.1% under Thabo Mbeki in the 2000s and 1.5% under Jacob Zuma in the 2010s..Voters were unforgiving. In this year's elections, the ANC's vote share plunged from 57% in 2019 to 40%. It formed a government of national unity with the business-friendly Democratic Alliance (with 22% of the votes) and eight small parties..South Africans' hopes rose again at news of this coalition. Business confidence recovered to 2022 levels. The rand strengthened against the US dollar, local-currency bonds surged, and the country's top 150 chief executives predicted that the economy could reach 3.3% growth by the end of 2025 if Ramaphosa carried out economic reforms..But now, even this second iteration of Ramaphosa-induced euphoria is threatening to wear off. First, the government is yet to agree on a unified medium-term economic development plan and has been working off a patchwork of programs from the president's first six years in power. A crucial "national dialogue" summit scheduled for Dec. 16 to hash out a strategy has been postponed indefinitely. Second, policy squabbles between the main coalition partners have raised concerns about the durability of the pact. And economic growth looks anemic in the medium to long term despite the optimism..In November, an International Monetary Fund team projected growth "to reach 1.8 percent by the end of the decade." Finance Minister Enoch Godongwana forecasts an average 1.8% over three years. Ratings agency S&P Global Ratings expects 1.4% over 2025-2027. These are insufficient to alleviate South Africa's unemployment rate of 32.1% and a youth unemployment rate of 45.5%, for example, or its extreme poverty and inequality..Ramaphosa and his coalition partners need to make a few quick moves to save his second term from being as disappointing as his first. The president should make an unequivocal statement of commitment to the unity government and to assert that he intends to ensure its survival despite policy differences between the partners. Frequent, unnecessary and unseemly public spats between them have heightened political and policy uncertainty. As leader, Ramaphosa needs to reduce uncertainty around how long the arrangement will last..In his first term, he repeatedly said the unity of the ANC was uppermost in his mind, leading to criticism that he failed to lead decisively on crime, for example, in order to protect corrupt party leaders. He now needs to put the country's interests above those of his party — and say so..It's not that Ramaphosa has done nothing. His reform program adopted in 2020, Operation Vulindlela, has registered successes in energy (the restructuring of state utility, Eskom, seems to be working with nine months of uninterrupted energy this year), while logistics sector reforms started this year with private participation in rail. However, crime and corruption remain rampant and infrastructure rollout has been poor. This is an area Ramaphosa should drive ruthlessly..A few ministers in the coalition have also delivered sparkling results. A standout is the home affairs minister Leon Schreiber, drawn from the opposition DA, who has swiftly and tirelessly delivered on a key Ramaphosa structural reform: cleaning up the visa regime in just months to fast-track ease of entry for skilled migrants..Yet, after six months, the bold moves that were expected from Ramaphosa and his new coalition Cabinet are visible only in small patches. Squabbles over key legislation on universal healthcare access and basic education have arisen. Ramaphosa has displayed weakness by failing to fire key allies in his party accused of corruption, while some of his supporters have expressed a desire for the coalition arrangement with the DA to end..There is still much goodwill towards the president, but he's once again in danger of failure. In his first term, he pleaded that divisions in the ANC prevented him from moving swiftly with dealing with corruption and implementing economic reforms. Today, even as he has been pressed by an optimistic citizenry to move boldly and quickly, Ramaphosa has continued with his ponderous style while the economy has been stuck in first gear..He needs to quicken his step or he'll suffer yet another false dawn..Read also:.De Beer: Malema, Zuma, Godongwana, Ramokgopa, Mchunu, Schreiber – and the ANC's "Green Communists"🔒How world sees SA: FT lunches with Helen Zille🔒John Matisonn: December's by-election results provide pointers to SA's changing electorate.© 2024 Bloomberg L.P.

Ramaphosa’s leadership tested as GNU struggles to deliver on renewed optimism: Justice Malala

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