Election of Ramaphosa has potential to build stronger SA

Prof Raymond Parsons

The election of deputy president Cyril Ramaphosa as the new ANC president has great potential to build a bigger, stronger and better economy  in the future.  This is according to NWU School of Business and Governance Economist, Professor Raymond Parsons.

‘The decision by the watershed ANC elective conference today to choose Deputy President Cyril Ramaphosa as the new ANC President has had a highly favourable impact on market perceptions and investment sentiment about SA, although his victory had to some extent already been priced in by the markets,” says Prof Parsons.

He adds that Ramaphosa’s election by the 54th ANC conference confirms that he is perceived by the markets and many businesspeople as a ‘visionary pragmatist’ who has both the potential and necessary leadership skills to implement necessary economic reforms and turn SA around for the better.

“Collaboration with business and labour by the new ANC President remains an essential pillar on which to build successful cooperation between government and key stakeholders.

“Yet no matter who now leads the ANC, the challenges of unemployment, poverty and inequality remain. Ramaphosa’s election as the next ANC leader at least now creates a possible favourable tipping point for growth prospects, stronger investment and higher job creation in ways which can make for a bigger, stronger and better economy. This is essential in order to underpin future ‘radical socio-economic transformation’. The SA economy is presently not in a good space and needs urgent economic changes to realize its true potential. SA is currently operating within the confines of a ‘low growth trap ‘ and for nearly a decade SA’s growth rate has been well below the global average.”

Noting the mixed ‘slate’ that emerged from the ANC ‘top six’ elections, Prof Parsons says the challenge to Ramaphosa will be to muster a sufficient critical mass to ensure that, through the eventual implementation of the right policies, it will be possible to reduce policy uncertainty, stabilize SA’s public finances, repair damaged key institutions in SA and ensure fundamental restructuring of major state-owned enterprises like Eskom.

“It is now possible that further investment downgrades by credit rating agencies might be avoided, depending on the outcome of the Budget in February 2018 in managing deteriorating public finances.

“Confidence therefore needs to be restored in the SA economy. This could be cumulative, just as its decline has been in recent years. Therefore beginning the process of rebuilding confidence, with Ramaphosa now leading the ANC, will be half the battle. The biggest single practical step would be to restore credibility and coherence to the implementation of the National Development Plan, so as to begin to translate its 2030 vision into reality, so to create a better life for all,” Prof Parsons adds.