South Africa: Radical Transformation to be centre policy of new cabinet

Jacob Zuma has promised to put radical economic transformation at the centre of his new administration with the state expanding its role in the economy. The President has made a few key changes in his new cabinet, including major shifts in the economic and security clusters. The new Cabinet will be tasked with building the legacy of Jacob Zuma in his last term in office by implementing the National Development Plan (NDP), with targets for 2030. Government will however have to go beyond mere rhetoric to provide the meaningful change required by over 50 million South Africans for the NDP vision to be realised successfully.

A strategic move in the Ministry of Finance

As has been speculated for quite some time, Pravin Gordhan has been redeployed out of the role of Minister of Finance and replaced with his Deputy, Nhlanhla Nene. This appointment will ensure that there is continuity in the portfolio with Nene having been the Deputy Minister since 2008. He brings a wealth of knowledge to his position serving under both Trevor Manuel and Pravin Gordhan, as well as previously being the chair of the Portfolio Committee on Finance in parliament. His level of seniority within the ANC is the only major concern regarding his appointment. Pravin Gordhan and Trevor Manuel had the stature to call Ministers to order in terms of expenditure within their departments, and dealing with the more radical voices in the ANC alliance. Nhlanhla Nene may not have the immediate authority required to act in the same way.

Nhlanhla Nene is certainly one of the best strategic appointments of Jacob Zuma - Zuma is now the President that has appointed South Africa’s first black Finance Minister. This will give him accolades from the nationalist factions within the ANC alliance.  He also keeps one of his best performing Ministers in the cabinet, by redeploying them to one of the most critical governance functions, Cooperative Governance and Traditional Affairs. Zuma’s move to redeploy Pravin Gordhan to the portfolio of Cooperative Governance and Traditional Affairs is a strategic measure to address the growing problem of service delivery protests at Municipal and local government level, providing high priority to resolving this issue that has sown discontent towards the ANC. The Municipal and Local Government Elections are being held in 2016, and the ANC is vulnerable to contenders such as the DA and the EFF, as a result of service delivery failures. Gordhan has performed well in all his previous appointments, bringing a wealth of experience and the ability to turnaround institutions. He is known for having been the key figure in making the tax revenue authority, SARS, one of the most efficient institutions in the country. This move will ensure that the ANC has another good story to tell in 2016, should Pravin succeed once again in a new portfolio.

New faces in the economic cluster

Another fresh face in the economic cluster is Adv Ngoako Ramathlodi who replaces Susan Shabangu in the Mineral resources portfolio. Shabangu leaves the portfolio after a strenuous five years dealing with some difficult issues in the mining sector, including the debate on nationalisation as well as the 2012 Marikana Massacre. Ramathlodi, a strong supporter of President Zuma, has a difficult task ahead of him as he sits at the heart of the South African economy. The Minister will need to move quickly to resolve the current crisis in the platinum belt, which has cost the country billions in lost revenues. Investors have become weary of South Africa’s mineral environment as a result of policy uncertainty and the labour strikes. Ramathlodi will not only need to swiftly resolve issues within the sector, but must also find a way to please a host of stakeholders who have conflicting interests in the sector for South Africa to have any chance of unlocking its full economic potential.

The appointment of Lindiwe Zulu as Minister of Small Business Development may cause more problems by adding another layer of bureaucracy in the economic cluster. The Minister has a critical function of growing an area viewed as an important requirement for economic growth and employment. While this appointment may please many who have felt small business has been neglected in the past, the Minister will find it difficult to carve out her own role in a space occupied by the Minister of Finance, Trade and Industry and Economic Development. This is an already heavily populated area of economic policy development and requires a great amount of cooperation between the Ministers. Lindiwe Zulu may disappear into the background just as happened with the Minister of Economic Development.

Telecommunications to become a high priority

President Zuma has once again shaken up the critical communications portfolio by removing the well regarded Yunus Carrim who had been doing a great job in his short time in the portfolio. The change by Zuma represents the fifth since 2009 in the department. The president has essentially redefined the communications portfolio by splitting it into two departments - the Ministry of Telecommunications and Postal Services and the Ministry of Communications.

While the roles of the new Ministers have not been defined properly as of yet, this restructure by Zuma could mean that government finally understands the critical value of a strong telecommunications portfolio in an ever more competitive world where ICTs are at the centre of economies. The Telecommunications and Postal services portfolio, to be headed by former State Security Minister, Siyabonga Cwele, will be tasked with ensuring South Africa derives more value out of the booming information communications and technology industry and the postal services sector. South Africa may be one of the most advanced economies in Africa, but its telecommunications space leaves a lot to be desired. Key issues such as an unclear policy direction, lack of skills and the high cost of communication need to be addressed urgently. The cost of communicating means that millions are left out of an important part of the economy. In the age where information has become a defining part of 21st century economies, South Africa cannot afford to drop the ball in this regard.

Siyabonga Cwele’s new Department would mean that the technical aspects of telecommunications will get high priority, without the distraction of purely broadcast mandates that the portfolio had in the past. The new Ministry is likely to see the creation of a new regulator with the strength required to oversee a fast changing telecommunications sector. With the Independent Communications Authority of South Africa (ICASA) moving into the purely government communications portfolio, South Africa would see the emergence of a regulator with sharper teeth to tackle the critical matters in telecoms.  Hopefully government will give the portfolio the resources needed to ensure that the present bottlenecks in the telecoms sector are speedily removed.

The Ministry of communications will be formed out of state institutions including the Independent Communications Authority of South Africa (ICASA), the South African Broadcasting Corporation, Brand SA and the Media Development and Diversity Agency. It appears that the portfolio’s role would be PR based, aimed at cleaning up the image of Jacob Zuma and his government.  It will also be tasked with promoting South Africa overseas for the benefit of investment. This will be a continuation of the “good story to tell” line that defined the 2014 State of the Nation Address and the ANC’s electoral campaign. While it is important that South Africa boosts its image as an investment destination, it is a worrying trend how the national broadcaster is going further into the territory of being a government mouthpiece.

The next five years require implementation

Jacob Zuma has been given another five years to create a positive legacy. The first five years have been quite lacklustre despite some very ambitious policies such as the widely accepted National Development Plan. Economic stagnation in South Africa has exacerbated the problems of poverty, unemployment and inequality. It is broadly acknowledged that South Africa requires some radical policy shifts in order to grow at the required GDP rate to create wealth and prosperity. Jacob Zuma speaks the language that will please many in the left and in the private sector; however his success will only be defined by his cabinet’s ability to implement policy. 

Originally published on the africapractice blog here: http://www.africapractice.com/blogposts/page/23/?id=6528

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