President Cyril Ramaphosa is too conflicted to build real consensus between the state and business.
On the surface there appears to be some kind of momentum. Businesses have stepped in to help the state see off the three horsemen of the SA apocalypse: Eskom, Transnet and crime.
Ramaphosa has decided to stop talking about non-alignment in the Russia-Ukraine war and to actually go and see presidents Volodymyr Zelensky and Vladimir Putin. While in Moscow, we hope he will show some spine and tell the Russian president to Zoom into the Brics conference later this year and stop giving us diplomatic headaches.
A delegation of four ministers will head to Washington to directly address the wobbly status of US-SA relations in the light of various well-known incidents. The African Growth & Opportunity Act (Agoa) is on the chopping block, and we could really do without losing its privileges.
There has been a temporary improvement in power supply and news that we scraped through the first quarter without sinking into recession and — on Business Day’s reporting of the president’s desire for practical solutions to the Brics crisis and other factors — the rand has recovered some of the ground it lost in recent weeks. It’s understandable that the mood has lifted a tad.
What marks all of these developments is that they seem to represent a closer alignment between the needs of the economy and the actions of our executive. This is most evident in the case of organised business rolling up its sleeves to get into the difficult work required to fix dysfunctional sectors of the state.
Impossible job
A direct attempt to shore up relations with the US and other trading partners after the country’s alarming apparent lurch into the arms of a global pariah will ease the stress in boardrooms and calm the markets too. Bloomberg reported recently that 10% of the country’s GDP is reliant on exports to those markets.
In many ways Ramaphosa has an impossible job. He is the first democratic president of this country to have to worry about optics and audiences at the detail he does. Excepting former president Jacob Zuma, an aberration who cared not a jot, his predecessors could take far bigger risks than Ramaphosa, and they had far smaller problems to fix. He is the first to have to urgently build a constituency outside Luthuli House because, for the first time, the ANC’s re-election is not guaranteed next year.
He is often criticised for being overly consultative, but perhaps being at the centre of things he sees the need for consensus, that this country is defined by its silos of race, rich and poor, of state and private. I often think of the many directions in which Ramaphosa is pulled.
The ANC itself is shattered, and that expresses itself in a government that is incoherent and unpredictable. He doesn’t particularly like his deputy, and he owes his political life to some harmful ideologues he keeps in key ministries no matter what damage they cause. He tries to manage all of this in his own way, but the result is chaos.
The uncertainty upsets the private sector, keeps a lid on investment and South Africans out of work, and wobbles the markets.
Markets scream
The ANC despises the West out of habit, but the SA economy is tied to it. Ramaphosa tries to manage that by being “nonaligned”, but that’s a highly nuanced diplomatic dance. A more gifted operation than the department of international relations & co-operation would have found a better way to cock a snoot to the Europeans, but instead it decided to go and die on the hill of Russia’s invasion of Ukraine.
That was not strategic, because no view worth taking seriously can excuse the murder of civilians and the kidnapping of children. We just look terrible. So, the rand tanks, the markets scream, the inflation outlook darkens, the Reserve Bank tightens up and everybody gets poorer.
The state of crisis in which we find ourselves is now so severe that the wary counterparts of capital and state are finding each other again. What kind of alignment is it, though? From the outside it presents like two people who don’t like each other much stuck on a sinking ship. They can agree that they should probably fix the enormous hole in the hull, but not the direction the ship of state is travelling in.
We reported last week that the president had made no progress in instituting his promised “social compact”. This was because when the aforementioned ministerial ideologues got into the room with social partners they mounted their weary 1950s hobbyhorses and destroyed the process by demanding silly and irrelevant things such as a cap on executive pay and local content requirements. Ramaphosa shouldn’t have let that happen, but it’s water under the bridge now.
Perhaps, though, once we have some electricity, the railways function a bit and there is a modicum of progress against crime, this recent re-engagement of business and government can be expedited to work on a basic set of agreed principles upon which to proceed in terms of the economy.
Ramaphosa would probably support such a thing, but there are some individuals in his cabinet who would need to be kept far away from such a discussion. Given the president’s conflicted environment, I don’t think it can happen before the election. That seems a pity.
• Parker is Business Day editor in chief.
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