The value of SA companies with earnings linked mainly to economic conditions, such as banks, insurers and retailers, rose by billions of rand on Friday after it became clear that the ANC, DA, IFP and smaller parties would form a government of national unity (GNU) and co-operate in the key provinces of KwaZulu-Natal and Gauteng.
Standard Bank’s share price surged 5.58%, Capitec’s 5.36% and Nedbank’s 4.28%. Among insurers that rallied were Sanlam (3.76%), Old Mutual (7.51%) and Discovery (6%). Shoprite’s stock rose 4.51%, while Pick n Pay added 6.14%.
The CEO of asset management major Ninety One said uprooting corruption and growing the economy should be the top priorities for the new administration.
Asset management major Ninety One’s CEO, Hendrik du Toit, said that uprooting corruption and growing the economy should be the top priorities for the new administration.
Du Toit, who presides over a company with R3-trillion in assets under management, told Business Day that the formation of a GNU, with President Cyril Ramaphosa retaining his position and cabinet posts shared in proportion to the participants’ share of the vote, was an opportunity to right the ship.
“The people of SA deserve and demand a better life. As we face an economic and societal emergency we need to reset the trajectory of the country.
“A GNU formed by parties who respect our constitution, for which so many struggled over so many years, is a good beginning,” said Du Toit.
“This government should set itself three objectives: to set SA on the path of sustainable and inclusive economic growth, to stamp out the cancer of corruption, and address the dire living conditions of so many South Africans, starting with access to clean water and electricity.”
London-based economic think-tank Capital Economics said a GNU led by Ramaphosa was likely to see his broad policy agenda, focused on fiscal tightening and addressing infrastructure problems, remaining intact.
The parties that have so far joined the unity government — the ANC, DA, Patriotic Alliance, IFP and GOOD — have altogether 273 seats in the National Assembly, or 68%. The ANC said in a statement on Monday that discussions with other parties were continuing “in the spirit of inclusivity”.
Traditionally, the cabinet is appointed soon after the incoming president is inaugurated, but there is no constitutional requirement on the time frame for the announcement of the national executive.
Talks start
“The government of national unity in 1994 took years and months to put together. We came off the [election] campaign and delivered this government in two weeks. We are only starting to talk on Tuesday,” a Ramaphosa aide told Business Day.
The composition of the new Gauteng and KwaZulu-Natal executives is expected to be announced before Ramaphosa’s inauguration on Wednesday. The ANC’s Panyaza Lesufi was elected Gauteng premier and the IFP’s Thami Ntuli was elected KwaZulu-Natal premier after the conclusion of phase one of the coalition negotiations on Friday. Members of the GNU’s signatory parties are expected to form part of the provincial executives in those provinces.
Ramaphosa is under pressure to accommodate the various political parties that agreed to join the GNU in his cabinet, and to scale back the number of cabinet posts to cut costs.
At the weekend, SA’s biggest doctors’ organisation, the SA Medical Association (Sama), called on the president-elect to slash the size of his cabinet and use the savings to hire more healthcare workers.
Ministers in the new cabinet will be paid R2.7m a year and be entitled to an array of perks including free accommodation, luxury vehicles and VIP protection services. Deputy ministers will be paid R2.2m a year, and receive similar benefits.
Cutting the cabinet from 30 to 15 ministers could save R5bn a year and pay for an extra 4,000 health-care workers, said Sama, citing research by the DA.
“Our nation is facing significant health challenges, including a shortage of medical doctors, a healthcare infrastructure that is collapsing as well as insufficient medical supplies,” said Sama.
“These challenges are exacerbated by budget constraints that limit our capacity to respond effectively to the health needs of our population,” said the association. Last week the Centre for Development and Enterprise (CDE) think-tank urged Ramaphosa to cut the cabinet to 20, saying a smaller cabinet would be more agile, collegial and accountable.
“We are alive to the political reality of a potential coalition government and the need for the president to accommodate various parties in his cabinet,” said CDE executive director Ann Bernstein. “However, we believe even with this constraint it is possible to reduce the number of cabinet ministers and ensure the best available people are chosen in key portfolios.”
Update: June 17 2024
This story has been updated with new information.
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