“The announcement by President Cyril Ramaphosa of a reshuffled cabinet on 5 August is a long-awaited 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.”

Prof Raymond Parsons, an economist from the Business School of the North-West University (NWU), says it is clear that the country is in a more serious socioeconomic situation than it was when President Ramaphosa took over as president in 2018.

He says new leadership at cabinet-level has become necessary in these changed circumstances. “In particular, it has become highly necessary to revamp South Africa’s security infrastructure.”

Commenting on the cabinet reshuffle, Prof Parsons says a combination of negative factors has increasingly demonstrated that a cabinet is now needed that is “fit for purpose” in meeting the new socioeconomic and other challenges faced by South Africa.

“Higher unemployment and rising poverty require not only good governance but also for necessary policies and projects to be effectively implemented. Although the latest cabinet changes may fall short of what is ideally needed, President Ramaphosa’s revamped cabinet should nonetheless reassure business.”

Prof Parsons says while acknowledging the extent to which decisions about a changed cabinet are eventually inevitably driven by political considerations, there are nevertheless important criteria against which the new cabinet team will be tested by business and the markets in the period ahead.

“Although there will be disappointment that President Ramaphosa did not take the opportunity to further streamline and reduce the size of the cabinet, business is likely to find the latest cabinet reconfiguration broadly acceptable.”

Prof Parsons says it is regrettable that finance minister Tito Mboweni has decided to resign. The new Minister of Finance, Enoch Godongwana, is nonetheless an experienced successor. However, he will need to show in the forthcoming medium-term budget policy statement (MTBPS) in October that South Africa remains strongly committed to fiscal consolidation and sustainability in its public finances.

“Above all, the reconfigured cabinet needs to display a sense of urgency about the remedies and reforms now needed to get the South African economy back onto a job-rich growth path, including closer cooperation with the private sector.”