President Cyril Ramaphosa will host the fourth international investment conference on Thursday as part of his drive to attract $100bn to SA over five years. He looks set to reach this target, but that’s not what’s important. Rather, it’s what investors would like to hear from him or want him to do.
Even in the middle of the Covid-19 pandemic, the pledges were rolling in, and some projects were being implemented despite the delays in enacting key reforms. Undoubtedly, more pledges will be made on Thursday.
Unlike in previous editions of the annual conference — thanks to Covid-19 one was not held last year — Ramaphosa will have some good news to share this time around. After more than a decade of not releasing high-demand spectrum, he will tell investors and delegates that the government has made a breakthrough in auctioning spectrum.
In his weekly e-newsletter on Tuesday, he wrote: “The auction of spectrum is an important achievement. It was delayed for many years due to the policy drift, state incapacity and vested interests that were a feature of the era of state capture. The fact that we have now completed this process reflects the determination of this administration to undertake — and accelerate — the far-reaching reforms that our economy needs to grow and create jobs.
“The auction of spectrum is one of the priority reforms included in Operation Vulindlela [a debottlenecking team inside the government], which is working with government departments to accelerate the implementation of important reforms to support economic growth. By putting in place dedicated capacity to deliver on reforms, and focusing on the most important priorities, Operation Vulindlela has helped us to make real progress in a short space of time.”
He is correct. State capture — in its crudest form defined as repurposing state institutions to serve the interests of a few private individuals — might be a thing of the past, but like all sorts of malfeasance it might find ways of returning through subtler forms. And there’s no telling that the process, which has also been characterised by incompetence and a lack of evidence-based policymaking, might not end up in litigation like so many others.
He will also make much of other reforms, such as the licensing of more players to supply power, as well as increasing to 100MW the threshold of embedded energy that can be generated by firms. Unfortunately, all these measures, including the unbundling of Eskom into three subsidiaries have yet to stop load-shedding. In fact, bureaucratic wrangling by regulators, save for Eskom’s complex restructuring, is preventing these multibillion-rand investments from taking off.
Similarly, the introduction of third-party players into the state-owned freight rail and ports network, which formed part of his Tuesday newsletter, is unlikely to decongest cargo movements in the ports or get more volumes to move on the rail infrastructure. SA mining houses have been complaining bitterly about missing out on the commodities boom due to the unreliability of the country’s logistics system, which is largely state-owned.
Licensing of third-party players into the freight logistics system is still stuck in protracted supply chain processes. This means more months, and possibly a round of legal contestation by the losers.
Fortunately, all of these issues are within the president’s control. He needs to crack the whip even if he gets accused of micromanaging departments or working closely with the private sector.
Thabo Mbeki, one of Ramaphosa’s predecessors and now his cheerleader in fixing the ANC, got much done in the nine years before his ousting by micromanaging lethargic ministers, and even doing their jobs sometimes. Being a consequential president is about making tough decisions faster; certainly, it’s not about being liked or approved.
Looming large at the Sandton Convention Centre, the venue for the conference, will be the one variable that is not within Ramaphosa’s control: the ANC’s elective conference in December where his opponents — allies of suspended ANC secretary-general Ace Magashule — are likely to challenge him.
Before the conference, the skirmishes within the party will paralyse governance and seek to frustrate his reform efforts, especially cleaning up the government through the appointment of ethical leaders. His renewal agenda, code name for fixing the ANC, is already facing resistance from his rivals. The so-called fightback campaign is likely to gain traction when the corruption trials of Magashule and Jacob Zuma start in the coming months.
In addition, implementation of the recommendations of the Zondo commission of inquiry, including prosecutions of more ANC officials for state capture, is likely to cause further divisions and squabbles in the party. Ramaphosa, who has received three reports from chief justice-designate Raymond Zondo, has undertaken to submit an implementation plan to the National Assembly by June.
The biggest concern among economic operators is whether Ramaphosa will press ahead with his reform agenda, which will require that he spends some of his political capital, or choose to be distracted by trying to save his party. He should press ahead with the reforms, especially his focus on promoting small businesses that are nimble enough to create the jobs the country desperately needs.
Telling delegates on Thursday that he will do this will assuage business’ concerns. As for his party, he has Mbeki and other veterans to do the heavy lifting.
• Dludlu, a former Sowetan editor, is CEO of the Small Business Institute.
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