Business and economists response to new cabinet mainly positive

Business and economists have responded mainly positively to the new cabinet announced by President Cyril Ramaphosa on Sunday night, although there are some questions about some ministers who were kept, while nothing was done about the size of the cabinet.

Civil organisation Organisation Undoing Tax Abuse (Outa) says it hopes the new cabinet will consult more closely with civil society and address long-standing concerns with service delivery, transparency and accountability, but is unimpressed with the increased size of what was already a bloated cabinet.

Outa glad to see Chikunga go, but what about Mantashe and Nzimande?

Wayne Duvenage, CEO of Outa, says he believes the increase was meant to accommodate “old friends” of the president, such as Blade Nzimande and Gwede Mantashe, who did not perform well in their previous positions and would have been better left out.

“Nzimande has done extensive damage to the Higher Education portfolio and in particular to the National Student Financial Aid Scheme (NSFAS) and the Sector Education and Training Authorities (SETAs).

“The same can be said for Mantashe, who loses Energy to a broader Electricity and Energy ministry under Kgosientsho Ramokgopa but retains control over mineral and petroleum resources. We believe that Mantashe has overstayed his welcome and done far too much damage to the mining industry to have been allowed to continue to head up this portfolio.”

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Outa on Transport

On the other hand, Duvenage says Outa welcomes the change in Transport, as this is a ministry that has been in turmoil for well over a decade with seven ministers in the past 15 years. “Minister Sindisiwe Chikunga did not cover herself in glory during her tenure as the deputy and then minister of transport over the past five years, with growing inefficiencies across the department, not least of all being the lack of accountability of the Road Accident Fund CEO, Collins Letsoalo.”

He says he hopes the new Minister of Transport, Barbara Creecy, will tackle the many deficiencies and areas of concern and engage with civil society.

“We expected Senzo Mchunu to retain his position as minister of Water and Sanitation, as he was doing good work to rectify many problems related to the poor performance of his predecessors. Nonetheless, we believe he may be a good fit to assist with the professionalising of the police and address the lack of leadership that pervaded the police over many years.

“We urge the new minister, Pemmy Majodina, to continue the good work done in water and sanitation, as we have a water crisis in the country regarding service delivery and pollution.”

Duvenage also says Outa would like to take the new cabinet ministers up on their calls for cooperation and look forward to engagements with civil society.

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SACCI hopes that ministers are capable and fit in meritocracy

Alan Mukoki, CEO of the South African Chamber of Commerce and Industry (SACCI) says while it is early days yet, they hope that the selection process looked into the capabilities of the candidates, in terms of ability to perform and alignment with the right values and culture.

“We have been steadfast and still maintain that for South Africa to successfully and sustainably tackle the challenges of poverty, unemployment and inequality, the country must move from a developing to a developed economy by ensuring that it delivers on the UN Sustainable Development Goals (UNSDGs).”

Mukoki warns that this will not be achievable if there is no meritocracy in the administration of the state and its institutions. “We are not sure which meritocracy template the GNU used in identifying, selecting and appointing the executive team. It is imperative for government to be transparent in sharing with stakeholders its own ideas on the meaning of merit, in order to avoid randomness in this critical area.

“An agreement between the political parties does not in itself translate to a scientifically derived process of meritocracy in recruitment, selection and appointment. The skills required to manage conflict will be a high priority given the conflicting interests and differing policy positions of the various political parties in the GNU.”

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Announcement good for business and investor confidence

Prof Raymond Parsons, economist at the NWU Business School, says the much-anticipated announcement of the new GNU cabinet is as a whole good for business and investor confidence. “The markets are likely to respond positively as they digest the new mix of cabinet appointments. Political certainty is essential to underpin the investment and job-rich growth that SA needs.”

He would like to see the GNU expedite the implementation of necessary economic reforms, as the overall election message was a clear instruction to deliver. “The first step for the GNU in delivering change would be to establish a sense of urgency. Delivery at various levels of government must be pursued by the new cabinet urgently, consistently and strategically.”

Parsons says a GNU ‘team effort’ will require a high level of sustained, disciplined political leadership. “A major step for the GNU Cabinet would therefore be to outline an agreed economic agenda soon that ensures greater certainty in its policies and actions. The more reform gains momentum under the GNU, the more policy uncertainty will recede and confidence in South Africa’s economic prospects will expand.’

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Immense challenges but not insurmountable

The Consumer Goods Council of South Africa (CGCSA) says the announcement of a new cabinet marks the start of a new, uncharted era for South Africa which at 30 years of democracy is at a crossroads, confronted by structural economic and social challenges, among them a low growth cycle, infrastructural inefficiencies, unreliable energy supplies, high unemployment, inequality and poverty.

“The new government has the formidable task of getting the country going and in particular usher a new chapter in its relationship and engagement with the business sector, a key social partner in the wider national objective of achieving inclusive economic growth and prosperity for all South Africans.

“While the challenges facing the country are immense, they are not insurmountable. They require bold, decisive leadership, with a purpose-led and solutions-based approach to resolving the impediments delaying or slowing down efforts to grow the economy.”

The CGCSA identifies these challenges that can deliver quick wins: energy security, infrastructure bottlenecks, regulatory and policy uncertainty, crime and service delivery at national and provincial government levels.

“Water quality and delivery, energy security, crime and infrastructure inefficiencies have worsened and poor service delivery, especially at local municipal and government levels not only affects the livelihoods of communities, but chases away investors and consequently, job opportunities and stifle SMME growth.”