Ramaphosa must do the right thing – trim gov fat

Cyril Ramaphosa celebrates the ANC’s election victory in Johannesburg last week. Source: Bloomberg.

With last week’s national elections done and dusted, pressure is on the president to proceed with undertakings that the cabinet be trimmed of dead wood, corrupt hanger’s on be left by the wayside, and South Africa’s ministerial wage bill be substantially slashed.

Moody’s, the only ratings agency among the top three fiduciary assessment institutions to retain an above-grade rating for South Africa’s sovereign debt, has repeatedly stated that government spending is a big concern and that its monthly wage bill might be a good place to trim some much-needed lard.

But although Ramaphosa runs the country he works for Luthuli House and the show there, on behalf of the ANC, is run by one Ace Magashule, secretary general of the party that last week was installed for the sixth consecutive time to form South Africa’s government.

In the meantime speculation is rife that Ramaphosa is on the verge of causing a major shakeup.

International investors expect stability, and one way of doing that would be to first adhere to Moody’s demand for a less bloated administration; and second, retain Tito Mboweni in his position.

The finance minister, though, has indicated that he would like to leave, yet rumour has it that he’s staying.

In the meantime Ramaphosa’s spokesperson, Khusela Diko, has asked that speculation be ignored, saying only that formation of the new cabinet is at an advanced stage and will be announced soon.

Of course, he also would also not confirm that Mboweni is staying on - mainly because of an appeasement strategy aimed at investors, both foreign and local, who were disappointed by the ANC including in its pre-election candidate list the names of senior politicians implicated in state capture involvement.

Director of research at the Mapungubwe Institute of Strategic Reflection, Susan Booysen, said “if ever Ramaphosa has had a platform to act against and cut these figures from his cabinet, it’s now.”

Professor at the North West University’s School of Business and Governance, Raymond Parsons, added that it was crucial for Parliament to be seen to take the right steps towards reviving the economy, puttering along at a growth rate of 1.5%, especially in order to alleviate unemployment, currently sitting at more than 27%.

The only way to do this, he said, would be through foreign direct investment.

 

 


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