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The Ramaphosa Plan: Doing more with the little he’s got

Sep 21 2018 13:31
Pieter du Toit

"This comes straight from him," one of President Cyril Ramaphosa’s advisors said after he delivered his much-awaited speech on economic recovery on Friday.

The advisor, bleary-eyed but obviously relieved that the statement explaining government’s economic stimulus plan had finally been delivered, said the head of state was intimately involved in the finalisation of the speech. His team of speech writers were, in fact, busy finalising the text at 04:00, six hours before he was due to deliver it.

"We had to make some adjustments…in one instance I had to say to the president we’re going to have to change something, we can’t put it like he wanted it to!"

The stimulus package – an Americanism much like the word "administration", which South Africans have adopted – is nothing like the package the United States adopted in the 2008 financial crisis, where liquidity was released into the market to stimulate the economy.

Our version rather comes down to better planning and improved usage of existing resources. It is therefore not government dipping into its reserves or borrowing from overseas markets in order to launch new programmes.

"The central element of the economic stimulus and recovery plan is the reprioritisation of spending towards activities that have the greatest impact on economic growth, domestic demand and job creation, with a particular emphasis on township and rural economies, women and youth," Ramaphosa said.

Four prongs

Ramaphosa was on Friday morning surrounded by his economic A-team of ministers Nhlanhla Nene (finance), Ebrahim Patel (economic development), Pravin Gordhan (public enterprises) and Zweli Mkhize (cooperative government and traditional affairs). A slew of advisors were also in attendance, including Treasury director-general Dondo Mogajane and Minister of Rural Development and Land Reform Maite Nkoana-Mashabane.

He was clear in articulating the central tenets of the plan: agriculture, municipal infrastructure, a "mega fund" for infrastructure projects, and policy adjustments.

In its budget review document, released in February, Treasury repeatedly emphasised that policy uncertainty was one of the main self-imposed constraints which hampered recovery and growth.

On Friday, Ramaphosa said he wanted to "clear the decks" to entice business to invest in the country – and he started with agriculture, mining and tourism.

Agriculture will be capitalised, and a new 10-person land reform advisory panel will be the main point of reference to ensure sustainability, reform and food security, he said.

The Mining Charter has already been revisited, and Parliament will be asked to withdraw the Minerals and Petroleum Resources Development Act ("Gently, because we need to respect the separation of powers," one advisor said).

And South Africa’s often-nonsensical and arcane visa regime will be reconsidered, including a revision of which countries’ citizens will need visas to visit.

Private sector boost

The president, in his statement, seemed to have embraced the private sector as catalyst for growth and recovery, and said he wanted to make that sector – as well as labour – fully-fledged partners.

Expertise will be co-opted into the unit in the presidency which will ensure that infrastructure projects are delivered on time in in budget, he said.

But confidence in the state’s ability to create the enabling environment for growth and delivery will be crucial if this plan is to succeed. That confidence has suffered in recent years, with corruption and mismanagement under Zuma's government eroding trust from the public and private sector.

There is no new money being released into the economy and no new plans to borrow. Ramaphosa’s plan comes down to improving trust and improving execution. That means he is going to have to do more with what little he’s got, and he’s going to have to do it largely with the people that he’s been given. It’s a tall order.

'Things have changed'

How will he, for example, convince actors in the agricultural economy – identified as a major driver for recovery – to invest in their businesses while there is such uncertainty and volatility in the sector?

A presidential advisor explained that the land reform panel, which Ramaphosa has assured its members will remain independent, will have to engage with both government and the sector; and they will be the drivers to ensure sectoral buy-in to the president’s plans. Is that enough?

When he walked along the colonnade back to his office in the west wing of the Union Buildings, Ramaphosa joked and shook hands with bystanders, saying that the work "starts now".

"Things have changed in this place since he took over," one official said, as the president walked past. "He knows what needs to be done."

Another official, who was at the receiving end of internecine battles and looting under the Zuma government, said the head of state was on a mission. "And we’re discovering new things every day…"

Ramaphosa was dealt a bad hand when he was sworn in as president in February. He continues to suffer under internal ANC power struggles and he is at the head of an ineffective state. But resurrecting an ailing economy might just be an opportunity to subjugate his restless party and clean up the state.

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