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Reconfigured Cabinet ‘needs to have sense of urgency’ for remedies, reforms to be successful

6th August 2021

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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President Cyril Ramaphosa’s reconfigured, or reshuffled, Cabinet needs to have a sense of urgency about the remedies and reforms now needed to get the South African economy back onto a jobs-rich growth path, including closer cooperation with the private sector, says North West University Business School’s Professor Raymond Parsons.

Business Unity South Africa (Busa) on August 6, meanwhile, said the Cabinet review “was necessary”, especially given the state of the South African economy, “a lack of direction in the critical interventions needed for investment and growth, as well as the recent attempt to destabilise the State”.

Busa said it would strive to work positively with the new Ministers, particularly in the Finance, Health, Defence, Human Settlements, Water and Sanitation and Communications Ministries.

The organisation further also welcomed the firing of Defence Minister Nosiviwe Mapisa-Nqakula, though it had expected similar action against the other security and intelligence Ministers, “given the significant weaknesses in these areas during the recent insurrection”.

The Minerals Council said the changed arrangements in the security cluster were timely, especially in the wake of violent civil unrest in KwaZulu-Natal and parts of Gauteng.

"We can only hope that they lead to a situation where those planning any future disruptive activities have their plans prevented and nipped in the bud," the council commented.

Busa, meanwhile, welcomed the appointment of Mondli Gungubele as Minister in the Presidency, as well as the appointment of Sydney Mufamadi as National Security Adviser.

While Busa said the appointment of a panel to investigate the weaknesses in the security cluster so apparent during the recent violence and insurrection was “well overdue”, it stressed that a reduction in the Cabinet’s size was needed.

“We don’t think we need an executive of this size to undertake the responsibilities of State. We remain convinced there is room for greater efficiencies,” it said, highlighting that the critical issue of implementation remained.

“Ministers must ensure their departments are professional and skilled to implement critical programmes and convert policies to implementation.”

Meanwhile, in a separate statement on Friday, Parsons said the long-awaited Cabinet reshuffle was an “important step in the right direction” to help rebuild business confidence at a time when it has been “badly shaken by recent events in South Africa”.

He argued that South Africa is “in a more serious socioeconomic situation than it was when Ramaphosa took over as President in 2018”.

Therefore, Parsons said that “some new leadership at Cabinet level has become necessary in these changed circumstances”. In particular, he highlighted that it had become “highly necessary to revamp South Africa’s security infrastructure”.

However, he stressed that a combination of negative factors had increasingly demonstrated that a Cabinet, which was "fit for purpose" in meeting the new socioeconomic and other challenges faced by the country, was needed.

Higher unemployment and rising poverty required not only good governance but also that the necessary policies and projects are indeed effectively implemented, he stressed, though he lamented that the latest Cabinet changes “may fall short of what is ideally needed”, though Ramaphosa’s revamped Cabinet “should nonetheless reassure business”.

Acknowledging the extent to which decisions about a changed Cabinet are eventually inevitably driven by political considerations, Parsons noted that there were “nevertheless important criteria against which the new Cabinet team will be tested by business and the markets in the period ahead”.

Although some would be disappointed that the Cabinet size was not reduced, Parsons said that “business is likely to find the latest Cabinet reconfiguration broadly acceptable”.

South Africa’s new Finance Minister Enoch Godongwana, meanwhile, is “an experienced successor but will need to show in the forthcoming Medium Term Budget Policy Statement in October that South Africa remains strongly committed to fiscal consolidation and sustainability in its public finances”.

Godongwana succeeds former Finance Minister Tito Mboweni, who resigned from the position, having made his intention to do so known well in advance.

Financial consultant Intellidex, however, speculated on August 6 in a separate statement that Mboweni had not resigned, but that he was "forced out" of his position by the South African Communist Party and trade union federation the Congress of South African Trade Unions.

Commenting on his successor, Intellidex said Godongwana was "a complex character not easily summarised".

"We see a strategic player but, ultimately, our wider forecast of fiscal underperformance in the medium run remains. Markets have a complex view of Godongwana too – the simplistic ‘investor friendly’ view is not quite accurate. He was the best choice available who half-wanted the job," the consultancy said.

While Mboweni "may well have resigned", Intellidex noted, it said that key political machinations and motivations remains, and that Mboweni's removal from Cabinet "also shows something very interesting and often overlooked about Ramaphosa that he can take contradictory views – backing wage restraint but then under pressure taking actions like tonight that conflict with that". 

As such there is a surprising amount of volatility here in the economic portfolios, Intellidex stated.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa) and the Minerals Council South Africa, both welcomed Godongwana’s appointment.

Seifsa chief economist Chifipa Mhango said his background in government administration and his role as part of the African National Congress’s Economic Transformation Committee, coupled with his education background in economics, "makes him a suitable candidate for the finance portfolio".

“We are confident that he will continue following the prudent direction set by Mboweni,” Mhango said.

Overall, Seifsa welcomed the Cabinet reshuffle, and said it looks forward to working with the new Finance Minister.

Stella Ndabeni-Abrahams, meanwhile, succeeds Khumbudzo Ntshaveni as Small Business Development Minister, which the Small Business Institute (SBI) has welcomed.

“As an important voice in the small- and medium-sized enterprises ecosystem, we look forward to working with her towards making this important segment of the economy play its rightful role in the economy, as envisioned in the National Development Plan,” the SBI said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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