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Since the ousting of Jacob Zuma, the volume on his legacy project has been turned down by his successor, Cyril Ramaphosa.
Ramaphosa has rarely mentioned radical economic transformation (RET) since taking the presidential baton from Zuma in February this year.
It is too early to declare RET dead, but its future looks bleak.
During the Zuma years, RET was perceived as a byword for wholesale looting of state-owned enterprises (SOEs).
The Gupta family, the business associates of Zuma’s son, Duduzane, have been implicated in the pillaging of SOEs, government departments, and municipalities – a sad part of South African history that has become known as ‘state capture’.
In the run-up to the ANC’s elective conference in December last year, supporters of RET threw their weight behind Zuma’s ex-wife, Nkosazana Dlamini-Zuma, who lost the leadership contest to Ramaphosa.
Instead of being a flag-bearer for RET, Ramaphosa has focused on breaking the investment strike against South Africa, launching an investment promotion campaign aimed at enticing $100bn to our shores over the next five years.
Although Ramaphosa’s presidency is still in its infancy, he has wasted no time in using his broom to sweep out of SOEs and key government institutions people allegedly linked to corruption and looting of state finances, and has replaced them with competent technocrats.
There are some similarities between the last two ANC leadership successions that are worth pointing out.
The last two presidents were both ousted before completing their terms and both times their economic policies were sidelined after their departure.
After former president Thabo Mbeki was removed from office in 2008, his successor (Jacob Zuma) canned Mbeki’s Accelerated and Shared Growth Initiative of South Africa (Asgisa) programme.
Zuma replaced Asgisa – which took over in 2006 from the Growth, Employment and Redistribution (Gear) macro-economic policy – with the New Growth Path (NGP) in 2010 during his first presidential term.
NGP, based on the notion of a developmental state spearheading cooperation between labour and business for the greater economic good, ran out of steam and was later incorporated into the National Development Plan (NDP) before the end of Zuma’s first term.
Gear, introduced in 1996, had been very successful in slashing massive apartheid-era government debt and suppressing inflation to within a target range of 3% to 6%.
Gear’s austerity measures and conservative monetary policy earned South Africa applause from the financial markets, resulting in the country earning multiple credit rating upgrades from international agencies.
By the time Mbeki was kicked out of office, the government was running a budget surplus, which was wiped out during Zuma’s tenure.
But Gear failed to create enough jobs to quell high unemployment, even though it kept economic growth hovering around an average of 3% per annum between 1996 and 2006.
Gear’s performance was hailed as an achievement, considering that growth had averaged 1% a year in the decade prior to the advent of democracy.
To accelerate economic growth even further, Mbeki introduced Asgisa to double annual growth to 6% on the back of propped up investment in infrastructure and addressing a shortage of critical skills, particularly in the fields of infrastructure project management, project finance, and artisanship.
However, Asgisa’s run was inexplicably cut short when Zuma became president in 2009.
RET is likely to suffer a similar fate. The policy gained prominence in Zuma’s second term and is premised on pushing 30% of state procurement to black suppliers.
The critics of RET argue that the policy was intended to be a cover for the continuation of state pillaging in the event of the Zuma faction prevailing over Ramaphosa in last year’s ANC elective conference.
Although Ramaphosa emerged victorious from the December conference, he has not indicated that he will pull the plug on RET, but there is no doubt that the policy is being overshadowed by the $100bn investment drive and the ongoing debate over land expropriation without compensation.
Supporters of RET have not given up the fight yet.
They see RET as the second reincarnation of black economic empowerment (BEE), which has struggled to increase black people’s ownership, management, and control of the economy.
Given the widespread corruption that has taken place, Ramaphosa is clamping down on the leakage in the state fiscus and focusing on overturning the credit downgrades that were triggered by the poor management of SOEs in the latter part of Zuma’s second term.
Ramaphosa’s investment crusade is already paying dividends.
The investment commitments that the president has secured from Saudi Arabia ($10bn) and China ($14.7bn) will stimulate growth when they are eventually deployed.
These investments may also be catalysts for attracting future capital.
South Africa has struggled to attract domestic and international investment, dragging economic growth down to a snail’s pace.
If growth is secured, South Africa may generate the resources required to spread the economic gains to millions of its citizens, instead of pursuing policies that benefit a small politically-connected elite.
If RET is miraculously retained, it will have to be implemented in the context of growing the economy and the economic benefits trickling down to the poor.
Andile Ntingi is the chief executive and co-founder of GetBiz, an e-procurement and tender notification service.
This article originally appeared in the 30 August edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.
