“Given the inevitable balance of political forces driving the shape and size of the new cabinet, the broad economic message emerging from President Cyril Ramaphosa’s reconfigured and leaner cabinet is potentially a very positive one for business and the markets.”
This is according to Prof Raymond Parsons, well-known economist and academic from the North-West University (NWU) Business School.
He says the streamlining and rationalising of certain ministerial portfolios is a welcome step of change towards a more compact, less costly, and efficient government.
“The new cabinet team will now be tested by their ability to generally rebuild confidence and ensure delivery by accepting that it cannot be 'business as usual' in the new regime. In this respect it may be helpful for agreed ministerial performance agreements to be transparent,” says Prof Parsons.
According to him the President's announcement recognises that turning the economy around and putting it on to a higher growth path is now the highest priority for the reconfigured cabinet – especially if the challenges of unemployment, poverty and inequality are to be successfully addressed.
“Credible and experienced reappointments to the core economic portfolios like finance, public enterprises, trade and industry, and mineral resources are likely to facilitate meeting the crucial challenge of boosting investor and business confidence.
“The restructured ministerial economic 'cluster' must therefore now give the economy a better sense of direction and reduce policy uncertainty if economic recovery and necessary structural reforms are to be promoted.”
Prof Parsons says good economic steermanship will also require a stable cohort of directors-general that strongly support the new cabinet. They must enhance the state capacity required to expedite implementation so that the socio-economic targets can be reached.
“Success will depend on widening and deepening the relationship with key stakeholders in the economy – especially business. Investor confidence will respond well if partnership and consensual stability can be strengthened in the period ahead.
“We must stop fighting over the economy, but rather aim to fix it in collaborative ways. This will enable South Africa to break out of its present 'low growth trap' sooner rather than later,” concludes Prof Parsons.
