Busisiwe Mavuso | Factions within ANC threaten key reforms — and the world is watching

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Remember Nelson Mandela’s Reconstruction & Development Programme? Or Thabo Mbeki’s Growth, Employment and Redistribution (Gear) economic policy? After nine wasted years, President Cyril Ramaphosa’s immediate focus was to start repairing the damage wrought on state institutions before the Covid pandemic saw the birth of his Economic Reconstruction and Recovery Plan.

While each on its own has merits and drawbacks, there has been little continuity of economic policy since 1994 despite the same party being in power. The result is that today, we do not have the luxury of reaping the longer-term benefits that policy continuation and market certainty would have brought. One of Gear’s targets was a far lower debt-GDP ratio.

At this point, the country simply cannot afford any deceleration, never mind a change in trajectory, to the structural reforms and state capacitation programme introduced by President Ramaphosa. The fact that there appears to be a serious risk of this happening, which has been clearly highlighted in the aftermath of the Phala Phala report, is particularly alarming.

Perhaps it’s a sign of our relatively immature democracy – 28 years is the blink of an eye in the annals of history – but critical issues such as stabilising our energy supply, attempting to get our freight logistics system functioning efficiently and improving the shocking state of government service delivery are goals that should cut across the political spectrum. It should be government championing these initiatives to improve the lives of its citizens rather than just the Presidency but support is often lacking even as high as Cabinet level.

Somehow, the factional nature of the governing party has transformed these important issues into political contestation areas with those who want a return to the days of looting with impunity determined to derail the process.

The ANC, in many aspects, has the correct policies in place to remedy those and other severe problems we have that are preventing us from any sort of meaningful economic growth. Yet there is another side to the ANC that blocks and obstructs progress, often rendering the party incapable of effectively implementing policies.

This duality was clearly reflected in the market panic in the immediate aftermath of the report when the media was widely reporting that Ramaphosa was going to resign, which saw the rand shed nearly 4.5% against the dollar and the yield on 10-year government bonds surge 91 basis points.

The message was clear: the international investment community is concerned that the reforms are not a “government” agenda but a presidential one and that’s why the markets panicked, fearing a new president might not be committed to the reforms. And without a reliable power supply or a rail freight system that is able to cope with the country’s export demands, why would they want to remain invested in the country?

That attitude is also prevalent locally too, reflected in opinion polls consistently showing that citizens trust Ramaphosa far more than they do the ANC.

The nub of the problem is that, with state institutions having been severely weakened by corruption and misgovernance during the state capture years and with so many factions within his own party that want him out, Ramaphosa centralised key functions of his reform programme within the presidency to drive his reforms through. Operation Vulindlela was tasked with overcoming blockages to key reforms and other centralised functions including the Presidential Climate Commission, the Presidential Infrastructure Commission Council and the “red tape” unit that doesn’t seem to have got off the ground.

And the threat of him ending his presidency prematurely brings with it the threat of those programmes being terminated. It’s not a healthy situation – but ironically, one way to reduce this “key man” risk that private companies have to watch out for is to push ahead even harder with the key reforms that Ramaphosa has launched to capacitate the state.

The stronger the state and its institutions, the weaker the influence of factions opposed to the reforms will be, increasing the likelihood that policies will be implemented more effectively.

The rejuvenation of the state entities damaged by state capture has been ongoing since Ramaphosa became president in 2018 with mixed success. The NPA and SARS are improving their efficiencies but Transnet and Eskom remain financially distressed and dysfunctional to varying degrees. Another important programme to improve state services is the National Implementation Framework towards the Professionalisation of the Public Service, which aims “to create a capable, ethical and developmental public service”.

Heading into the ANC elective conference next week, the most important message is for the leadership to do their duty and put the country’s interests first. There are encouraging signs from some quarters but it’s clear that corrupt elements still have influence.

The world is watching closely.

*Busisiwe Mavuso (@BusiMavuso2) is the CEO of BLSA. This article first appeared in News24 Business.

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