C&B Notes

Ramaphosa Moves Quickly, But Will He Last?

Since his election as President of South Africa by the slimmest of margins, Cyril Ramaphosa has worked quickly to change the country’s direction.  Short term, he must dance around divisions in his own political party and rising dissent from new voices.  Ramaphosa’s longer term challenges are structural issues — corruption, economic stagnation, racial division, etc. — that have only deepened in the last 20 years.

For the four years of his vice-presidency, Cyril Ramaphosa looked on with seeming impotence as his boss dragged South Africa closer to catastrophe.  While Mr Ramaphosa stood silently, Jacob Zuma axed competent ministers and ransacked state institutions in the interests of his alleged paymasters, the Gupta family.  Little in Mr. Ramaphosa’s reticence during that period could have prepared South Africans for what was to follow.  In the three months since he was elected leader of the African National Congress, he has unleashed a political blitzkrieg, making a succession of decisions and deft maneuvres that have bolstered investor confidence and lifted the national mood…

During Mr. Zuma’s term, the economy stalled, the rand slid and two rating agencies marked down the sovereign debt to junk.  The once seemingly unassailable electoral majority of the mighty ANC evaporated as the party lost control of three big cities, including Johannesburg, in 2016 municipal elections.  Unemployment is chronic, especially among the young.  The predations of apartheid are still there for all to see, in the distribution of land and wealth and in the spatial segregation of cities.  Julius Malema, who broke away from the ANC to form the radical Economic Freedom Fighters, has captured the mood of public anger among black voters fed up with the ANC’s seeming inability to create jobs, provide services or improve lives.

If the problems are enormous, Mr. Ramaphosa has moved to address them with a speed belied by his earlier inaction.  In the short time since he was elected leader of the ANC, he has shouldered Mr. Zuma aside as state president; swept out the management of dysfunctional state-owned enterprises; purged a cabinet loaded with Gupta family acolytes; and emboldened a previously cowed law-enforcement apparatus.  Mr Zuma, who had resisted corruption charges for years, has been summoned to court.  A probe has been launched against the Gupta family, who stand accused of influencing state appointments and government tenders through Mr. Zuma.  The Gupta family and Mr. Zuma deny any wrongdoing.  Mr. Ramaphosa has even transformed his own image, jettisoning the aloof lover of fine wines for the man of action who flies economy class and greets ordinary voters on his morning run.  The sense of urgency owes largely to Mr. Ramaphosa’s lack of time to turn sentiment around.  In 2019, he must face the electorate as head of a divided party, one that elected him as its leader in December by the narrowest of margins.  Zuma loyalists remain in positions of power.  David Mabuza, who as premier of Mpumalanga was accused of treating the province like a personal fiefdom, is deputy president.  The ANC’s top six officials are divided between those seen as “constitutionalists” in the Ramaphosa mold and those, like Ace Magashule, secretary-general of the party, who advance a style of politics based on connections.  Few doubt there will be a showdown ahead.

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He has two other monumental tasks.  First is to get the economy moving again.  His appointment halted the decline in the rand and persuaded Moody’s, the only big agency not to have downgraded South Africa’s sovereign debt to junk, to change its outlook to stable.  Now he wants to get investment, currently below 20 per cent of gross domestic product, flowing.  The president says he will approach the investment question like a businessman, “building a book” of at least $100bn in projects, both domestic and international.  He wants firm pledges by the end of the year. The private sector has told him, “give us more confidence and we will invest”, he says.  “Give us more reason why we should invest in various sectors of the economy and we will.”  Mr. Ramaphosa insists he can provide the policy stability investors need.  “We can explain where we are.  We can explain what we are seeking to do is to create a very good and solid and durable environment for investment,” he says.  Some of the money — as much as $40bn — will come, he says, from state-owned enterprises, an additional amount from Chinese investors and the rest from the private sector, both domestic and foreign…

The bigger challenge will be to address some of the structural legacies of apartheid that were exacerbated by the low growth and moral decay of the Zuma era.  More, he must answer the demands of a frustrated majority — through redistribution and black empowerment — without spooking investors…He has a task, viewed as impossible by some commentators, of simultaneously making the country more “capitalist” so that it can grow faster, and more “socialist” so that more wealth and opportunity is distributed to a disenchanted black majority.  One issue that has come back to haunt the ANC is land, described by Mr. Ramaphosa as the “rock bed” of the ANC movement since its formation in 1912. “It was formed to resist the land grab by the colonialists, to return the land that had been taken by the wars of dispossession,” he says.  “The clamor for land has come back full force,” he says, describing the yearning for land as a “gaping and bleeding” wound. Under pressure from Mr. Malema, the firebrand leader of the EFF, Mr. Ramaphosa has agreed to a review of the constitution that would make it easier to expropriate land without compensation.  But in the interview he makes clear that he favors practical solutions, such as distributing land already owned by the state and awarding abandoned buildings to tenants.  That approach would balance the need for social justice with the preservation of property rights.  “We are not going to go for solutions that will lead to a decline in the economy,” he says.  “Whatever we do as we return land to indigenous owners, the economy must not be harmed, agricultural production must not go down.” But as a sign of how far Mr. Ramaphosa is prepared to lean to accommodate different views and head off opposition from the left, he says he would gladly welcome Mr. Malema back into the ANC. “This is his ideological home,” he says.

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