Cyril’s ‘nothing speech’ not reassuring investors – analyst

His hands are tied by the ANC NEC, especially in the light of next year’s elections, Econometrix chief economist Azar Jammine says.

JOHANNESBURG, SOUTH AFRICA – DECEMBER 08, 2017: Deputy President Cyril Ramaphosa during an interview in his home in Hyde Park on December 08, 2017 in Johannesburg, South Africa. Ramaphosa shot down President Jacob Zuma’s proposal to have the loser candidate automatically be made the deputy president with the election only days away. (Photo by Gallo Images / Rapport / Deon Raath)

Faced with a R195 billion budget deficit, unemployment figures now standing at 27.2% and a sluggish economy, President Cyril Ramaphosa missed a golden opportunity this week to reassure foreign investors about South Africa being open for business, says an analyst.

Econometrix chief economist Azar Jammine has described Ramaphosa’s televised speech on Tuesday night, following the ANC’s NEC Lekgotla in Tshwane, as “a nothing speech”.

The rand abruptly lost 16 cents to the US dollar in late trade on Tuesday after the president announced that the ANC would push for the amendment of section 25 of the constitution to ensure the implementation of the party’s policy of land expropriation without compensation.

This is a resolution adopted at the party’s 54th national conference at Nasrec, west of Johannesburg, in December.

With foreign investors and local business anticipating economic policy reassurance from Ramaphosa, especially on how the ANC planned to stimulate economic growth, Jammine said the speech was “disappointing”.

“It was a nothing speech and very disappointing,” he said. “It didn’t come across as something he necessarily believed in.

“From economic issues to changing the constitution for land expropriation without compensation, the speech was flat.”

Having been elected by the conference as party president without a sizable majority against rival Nkosazana Dlamini-Zuma, Ramaphosa has been forced to adopt a leadership style that is consultative and all-inclusive in governing the country with former political opponents.

Jammine said: “What we have seen is that Ramaphosa’s hands are tied by the ANC NEC, especially in the light of next year’s elections.

“He now has to abide by ANC policy as resolved at Nasrec.”

Land, he said, was “a litmus test by international investors”.

“When it comes to the issue of land, investors are now worried about property rights being compromised. This concern is irrespective of political reasons advanced.”

Jammine said there were “many ways in which the land question can be dealt with to unleash wealth for all South Africans”.

“One of these is to give citizens title deeds to own land.”

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During his speech, Ramaphosa listed what he called ‘the ANC’s economic stimulus package for South Africa’ comprising:

Increased investment in public infrastructure;
Increased support for entrepreneurship and employment opportunities for youth and women, as well as small- and medium-sized businesses;
Trade support measures for sectors such as sugar and products affected by big import surges;
Ensure that procurement focuses on localisation; and
Training for unemployed youth with the skills to compete in a rapidly-changing economy.