[Source: http://www.iol.co.za/business/news/old-woes-lie-ahead-for-new-cabinet-1.1686568#.U3EvLbmKDIU by Londiwe Buthelezi.]
Johannesburg – The jury is out among analysts on whether a rejuvenated ANC will have the thrust to more adequately address economic challenges that were hastily crammed onto the post-election agenda while it focused on its campaign trail this year.
With issues ranging from the most glaring – the Association of Mineworkers and Construction Union-driven strike in the platinum belt and job creation – to the subtle challenges of the current account deficit, analysts are in agreement that the yet unnamed cabinet will have its work cut out.
The ANC retained its position as the ruling party after garnering 62.16 percent of the national vote, the Independent Electoral Commission declared on Saturday.
Despite widespread praise of the Department of Trade and Industry (dti) as the most proactive implementer of the National Development Plan (NDP), there is still uncertainity over many issues in its purview, including the Protection of Investment Bill, beneficiation and the take-off of the Industrial Policy Action Plan 3.
“If there is anyone doing anything to grow the economy in South Africa, [the dti] is where to look,” said Gary van Staden, a political analyst at NKC Independent Economists, commenting on what government structures had made progress on advancing aspects of the NDP that relate to them.
But Van Staden added that South Africa always had a “radical” plan to solve its problems and save the world but it was all “talk, talk, talk”; implementation was all over the place.
Azar Jammine, the chief economist at Econometrix, said he did not see any radical changes afoot as the NDP, which the ANC wanted to work towards implementing in this new term in office, was not new.
He said little had been implemented even though the policy was vague and could be interpreted in different ways.
The NDP’s broad targets include: expanding electricity, transport and communications capacity, addressing challenges in mining and community development, broadening rural development and expanding agricultural opportunities as well as strengthening public service delivery while combating waste and corruption.
On energy, Eskom, under the Department of Public Enterprises, faces another acid test after a hectic summer where it teetered on the brink of blackouts. The department’s other problem child, SAA, still has to justify its state upkeep.
“One aspect of the election that one can interpret is that the ANC can see people are complacent and it doesn’t matter whether they do right or not. An alternative interpretation to that could be that being in power again, the ANC can get on with the job it has started without worrying,” Jammine said.
He pointed out that policies that proposed more state control in certain areas, including beneficiation, seemed to have been put forward deliberately by the ruling party to appease people who wanted to vote for the Economic Freedom Fighters.
“It will be interesting to see if the government will go ahead with those as they were not passed in the last parliament, or if it will abandon them.”
Annabel Bishop, Investec’s senior economist, is also not anticipating radical changes to economic policy and legislation as there was already a wave of proposed legislation before Parliament.
But she said with support for the ANC following a steady downward trend – it garnered 11 436 654 votes in this election, down from 11 650 748 in 2009 and up from 10 880 915 in 2004 – the pressure could be on for the party to modernise and move away from the socialist policies that had lost it votes.
Bishop singled out the “Final Policy Proposals on Strengthening the Relative Rights of the People Working the Land” as one such populist policy.
The 2014-2019 strategic plan of the Department of Rural Development and Land Reform shows that most of its policies are targeted for legislation after this election. This land reform policy is one of them.
Bishop said only a significant loss of support for the ANC was likely to cause the momentum for it to modernise, and without that modernisation, the economy would battle to sustain growth above 3 percent a year. – Business Report
57 700 000 (mid 2018 estimate)
4.5% y/y in December 2018 (CPI) & +5.2 y/y in December 2018 (PPI)
2.2% q/q (3rd quarter of 2018)
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