PETER BRUCE: Ray of light for Ramaphosa doesn’t mean he is safe

Speculation about an early departure from office by President Cyril Ramaphosa is suddenly widespread. Analysts are divided. Some believe it’s inevitable as the ANC slips alarmingly in polls ahead of the 2026/27 local government elections. Others hold that without Ramaphosa, emerging signs of economic recovery would be quickly snuffed out and threaten even worse results for the ANC in the 2029 general elections.

In the past few days a rising swell of voices has begun to call a distinct shift for the better in our fortunes, citing our removal from the so-called “greylist” in international finance, evidence that ports are operating more efficiently and that private-sector train operations will soon be running on Transnet lines.

They also took heart from a solid medium-term budget policy statement from finance minister Enoch Godongwana last week that anchored a tough low inflation target of 3%, committed credibly to hold the national debt below 80% of GDP, and forecast real GDP growth of 1.8% a year between 2026 and 2028.

This was greeted with a quick credit rating upgrade by S&P. The rand rose against the dollar, and the JSE surged as third-quarter unemployment fell 1.3 percentage points to 31.9%.

Ramaphosa followed all of this in his regular Monday newsletter, spying the “green shoots of an emerging economic recovery”. It isn’t the first time he’s seen the same green shoots on a Monday, though, and there are still many reasons not to get too excited.

Read: EDITORIAL: Ramaphosa exit will benefit only a few

Unemployment is unbearably high. The expanded rate (including people who have given up looking for work) is still well above 40%. It would take falls in at least three quarters to establish a reliable trend downwards. And Treasury growth forecasts have almost always proven too optimistic.

But perceptions matter, and the upbeat mood now in the upper echelons of the business community will give Ramaphosa heart. In the face of continuing gossip about his possible departure, he is reported to have told his party that if they want him to go, they should come and tell him to his face.

But unless he is able to translate sound fiscal policy into real-economy gains on the ground, the pressure on him will return. His reforms have staunched complaints about electricity shortages, but elsewhere progress is numbingly slow. The introduction of private sector freight trains on Transnet lines is supposed to help shove tonnages from a low of 151-million tonnes last year to 250-million tonnes by the end of 2029. Of this, Transnet would be doing around 180-million tonnes.

Experts I have spoken to say, though, that the rail network is in such disrepair that the 11 new companies chosen to begin operating next year would be lucky to move 20-million tonnes on their own by 2030. In 2017/18 Transnet moved 226-million tonnes, so you get an idea of how poorly it has performed under Ramaphosa’s management.

The only thing that would seriously quicken the pace of reform is wholesale change in industrial policy, with clearly underperforming regulations like preferential scrap pricing, high protectionist tariffs, high export taxes and other BEE impediments placed on new investors discarded. It is widely accepted that only fixed investment in plant and production north of 25% of GDP a year would make real inroads into unemployment, when we currently average only 13%.

The other day I listened to Rudi Dicks, who runs Operation Vulindlela, the policy reform unit in the presidency, tell an interviewer he’d like to get the fixed investment rate up to 18%, as if that were a real challenge. But it is way too modest, and if his boss is happy to wait for a number that low, I would put good money on him not seeing out his full term in the Union Buildings.

• Bruce is a former editor of Business Day and the Financial Mail.