Ramaphosa calls for reforms as coalition deadline looms

South African President Cyril Ramaphosa has emphasized the critical need for continued policy reforms to boost economic growth as coalition talks intensify following a closely contested election. The ANC, which secured 40.2% of the vote, is in discussions with the Democratic Alliance and other parties to form a government of national unity. With the DA aligning on structural reforms and the potential to increase economic growth to 3% over the next decade, the outcome of these negotiations is pivotal. The Economic Freedom Fighters and Jacob Zuma’s MKP, however, oppose any alliance with the DA, adding complexity to the political landscape. This coalition’s direction could significantly impact South Africa’s economic trajectory, potentially generating an additional 100 billion rand annually to combat unemployment and poverty.

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By S’thembile Cele and Adelaide Changole

South African President Cyril Ramaphosa said the country’s next administration must sustain policy reforms aimed at accelerating economic growth, as key political parties meet to discuss helping form a new government.

“Regardless of the form or composition of the incoming administration, it is important that the momentum of reform be retained and sustained,” Ramaphosa said in his weekly statement on Monday. “A change in direction would derail the positive progress that has been made and take us back to the starting blocks.” 

Modeling by the National Treasury has shown that the successful implementation of reforms, including those aimed at improving energy supply and the operation of ports and railways, would raise the economic growth rate to 3% over 10 years, the president said. The economy grew by an average of less than 1% over the past decade.

Ramaphosa’s African National Congress last week invited political parties to join a broad alliance to form the next administration — a so-called government of national unity — after elections on May 29 failed to produce an outright winner. The ANC emerged from the vote as the largest party with 40.2%, followed by the centrist Democratic Alliance with 21.8% and former President Jacob Zuma’s populist uMkhonto weSizwe Party the third-biggest on 14.6%.

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While the exact date has yet to be confirmed by Chief Justice Raymond Zondo, the first sitting of South Africa’s parliament must take place next week, when legislators will elect the president.

The DA’s top decision-making body will meet in Johannesburg on Monday after holding formal talks with the ANC at the weekend. The party will discuss “feedback from our negotiating team,” DA spokesman Solly Mahlatsi said by text message.

While an ANC-DA tie-up has drawn opposition from some members of the former ruling party, the duo are aligned on ramping up structural reforms as a means to reviving economic growth. Zuma’s so-called MKP has previously said it won’t join an alliance with the ANC while Ramaphosa is still the head of the party. And the leftist Economic Freedom Fighters said on Friday it won’t be part of a government that includes the DA.

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“If we have a centrist government that prioritizes growth, we can see an absorption of some level of employment, we can see business confidence go up, we can see the general population being a lot more optimistic,” Investec Plc Chief Executive Officer Fani Titi said in an interview with Johannesburg-based broadcaster 702 on Monday.

If economic growth was just 1% more than the current trend, it would enable the government to collection about 100 billion rand ($5.3 billion) more per year — money that could be used to create jobs and alleviate poverty, he said. 

Top leaders of South Africa’s fifth-biggest party — the Inkatha Freedom Party — will meet on Monday after talks with the ANC.

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