UNPACKING PRESIDENT ZUMA'S NEW CABINET - Prof Raymond Parsons from the NWU Potchefstroom Business School

Pertunia Thulo -- Tue, 05/27/2014 - 00:00

UNPACKING PRESIDENT ZUMA'S NEW CABINET - Prof Raymond Parsons from the NWU Potchefstroom Business School

The new cabinet presents a mix of positive and negative perceptions. To begin with, the widespread anticipation of a “lean and mean” cabinet unfortunately did not materialise and the inevitable need to repay political debts and keep an ideological balance has clearly heavily dominated the appointments.

No doubt “succession politics” also played a role with a view to future elections. It is very much a balancing act, given the political dynamics, even though the underlying message remains one of capacity building and the need to “deliver”. Confirmation of Cyril Ramaphosa as Deputy President is a considerable asset to the cabinet and the country, given his experience of organised labour, business and politics, as well as his participation in the drafting of the National Development Plan (NDP). He is potentially in a strong position to exert the necessary political clout to help push things along.

The accession of Deputy Minister of Finance Nene to the portfolio of Minister of Finance was not entirely unexpected. He comes with the necessary experience of the National Treasury that stretched over several years, and promises to remain a safe pair of hands there. He nonetheless has big shoes to fill at a critical moment in South Africa's business cycle and will need to quickly establish himself. It is an open question whether the creation of a Small Business Ministry will be a success, given the largely indifferent performance of similar structures elsewhere, but we should chew it and see. There is no doubt about the real challenges facing small business and the need to urgently implement the necessary solutions to enhance their role in growth and job creation. Apart from the time it will take to settle in the new ministry, it may also become another casualty of the “turf war” and conflict over economic policy that has been apparent between the National Treasury, the DTI and Economic Development. It is hoped that the renewed commitment to the implementation of the NDP will encourage more coherence in policy.

The move by Gordhan to Cooperative Governance involves a highly competent minister with a good track record in the serious delivery problems at local government level, and should be welcomed. Many businesspeople may be willing to give certain other appointments the benefit of the doubt. One suspects, however, that among investors and businesspeople the final verdict on the new cabinet will await real outcomes around the implementation of the commitment by President Zuma to “radical economic transformation within the framework of the NDP”. As the NDP is widely seen as a “centrist” document, which places considerable emphasis on the key role of the private sector in promoting job-rich growth, and to which the government has already undertaken to align its policies, the financial markets and business will presumably be alert to any failure to stay “on message”.

Business probably also wants to be treated more as a genuine partner in future development, rather than as an “alien force”, but there remain some tough questions to be addressed in government-business relationships. If the key targets of the NDP are written into the performance contracts of ministers and outcomes are rigorously monitored, then those instances where continuity in the appointments has been favoured over change may work out. It is nonetheless not only the economic team in the cabinet that matters. It remains to be seen whether the large new cabinet as a whole can project the necessary policy coherence that creates the certainty and predictability required by investor confidence to boost economic growth.

 

Written by Prof Raymond Parsons

2014/05/27

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