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South African business leaders are frustrated by the pace of reforms under President Cyril Ramaphosa. Her cabinet choices and spending promises did not help.
His rise as national leader last February was hailed by the so-called "Ramaphoria", while the obligations of the rand and the government multiplied on expectations, he would reform the struggling economy, fight against corruption and replace non-performing Cabinet members. Much of this gathering was a relief after the end of Jacob Zuma's nine-year term, marked by corruption and few political decisions. Since the end of the month when Ramaphosa took power, the rand has depreciated by 20% against the dollar.
Companies' patience for change is exhausting. Some corporate personalities said the Ramaphosa government, named after the election victory last May, had not brought enough fresh ideas, while its speech on the state of the nation, in June, was seen as a promise of beneficent spending and that no details about the funding was allocated. .
"Very difficult decisions must be made. We have not yet seen any willingness to make these decisions. The deadlines are short and the pressures are intense, "said Martin Kingston, executive chairman of the South African Rothschild & Co. unit and vice chairman of the country's largest business lobby. "As a country, we want to have our cake and eat it, and the cake of all others."
High speed trains
While Ramaphosa was committed to saving the troubled electricity company, he also promised high speed trains and a new city. It is in a country where most municipalities struggle to provide basic services such as housing and sanitation, and after South Africa's economy recorded its largest quarterly contraction in one year. decade and that investor confidence has fallen to an almost multi-year trough. The latest investment quality rating from Moody's Investors Service is under threat.
To learn more about Ramaphosa's expenses, click here.
Kingston's sentiments were shared by three general managers of large corporations and a leader of professional badociations, all of whom refused to identify because their organizations did not comment publicly. They all claimed that Ramaphosa had been forced to compromise because of his close victory in the election of a party in 2017 and the opposition he was facing. a faction within the ruling ANC that is still loyal to Zuma.
Presidential spokeswoman Khusela Diko did not answer a call on her mobile phone.
The main concerns of the business leaders were the appointments to the management of the Ministries of Education and Labor. Both positions are considered essential in a country with one of the world's poorest education systems, a shortage of skilled labor despite an unemployment rate of 27% and rigid labor legislation making it difficult to hiring and firing workers and strengthening the power of workers. trade unions.
Leader of the work
Angie Motshekga, who has managed the education portfolio since 2009, has been appointed to the position, while Thulas Nxesi, former head of the leading teachers' union, has been transferred to the Ministry of Labor and Employment. Nxesi had been criticized for defending the government's irregular spending in favor of Zuma's private residence while he was Minister of Public Works. It is unlikely that a union leader will relax labor laws to ease business, business executives said.
Ebrahim Patel, whose role in economic development was expanded to include trade and industry, was criticized by some business leaders for his involvement in the purchase of local retailer Mbadmart Holdings Ltd. by the US giant Wal-Mart Inc. to demand concessions.
Even two successful corporate nominations – bringing back Tito Mboweni as Finance Minister and Pravin Gordhan in state-owned companies – are seen as short-term badignments.
Mboweni said he did not want to stay in the position too long and Gordhan, 70, was attacked by opposition Economic Freedom Fighters and the country's anti-corruption mediator for making decisions while running the South African Revenue Service. a decade ago. Although considered as sound economic choices, few major reforms have been made since their appointment for the first time last year.
Job cuts?
In his speech on June 20, Ramaphosa promised to cut spending on the government. He pledged to accelerate 230 billion rand ($ 16 billion) to support Eskom, but he did not mention the job cuts or efficiency improvements deemed necessary by the company's management.
Christiaan Schutte, CEO of South Africa's largest poultry producer, Astral Foods Ltd., was "stunned" by discussions of high-speed trains and new cities when municipalities can not provide basic services . In May, Astral said that the inability of a municipality to supply water to one of its plants would reduce profits by 85 million rand.
Of the 28 ministers appointed by Ramaphosa, only six had ever been part of the government.
"We have many of the same economic players in similar or expanded portfolios," Kingston said. "However, we do not necessarily want the same policies. We have high hopes for significant change and urgent decision-making and action. "
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