It was a long time in the making, but last night’s announcement of a final agreement for a Government of National Unity and the cabinet sets us on a new course. We are finally at the starting line of the new administration, but its success will depend on the deals done over the last month. The agreements set the foundation. The firmer they are, with all sides understanding exactly their roles and responsibilities, the more stable and effective we can expect this coalition government to be. For that reason, I hope our patience will be rewarded.
The new cabinet must work together for the common good of all South Africans. While last night’s announcement will take some time to digest, I hope we will come to see the individuals appointed as men and women of integrity and professionalism. The president last night highlighted the professionalisation of the public service as an agreed priority of the new GNU. That needs to start at the top, among the political leaders who oversee it.
He also noted that all parties have agreed to prioritise the creation of rapid inclusive and sustainable economic growth. That is critical to our future. South Africa stands out in the world for having experienced almost no growth in over a decade with the average citizen getting poorer in that time. We are among very few countries in the world that the International Monetary Fund had expected to continue to see declining per capita growth over the next five years. The huge unemployment rate is an obvious consequence, as well as the stress on public finances. This new government has an opportunity to change that.
The new administration will find goodwill from many quarters, both here and abroad. There has already been a vote of confidence from investors, and the finalisation of the GNU will support that. Business is looking forward to working with the new administration to deliver �` we are fully aligned with the President’s agenda to drive economic growth.
Those who are now in cabinet bear a heavy responsibility to put the national interest first. They have a unique opportunity to embrace the confidence they will find from many stakeholders. They must move decisively with an active agenda and focus on delivery.
I was honoured last week to join a panel at last week’s Operation Vulindlela conference to discuss how we can rebuild confidence in the prospects for South Africa. I was reminded that the last administration began with high hopes. Indeed, President Cyril Ramaphosa had the backing of many constituents, from international investors to local business. It is debatable whether that goodwill was used to best effect. Operation Vulindlela has certainly been the highlight of the administration and its successes. From concluding the spectrum auction which had dragged on for well over a decade to reforming the electricity system, its successes are incredibly important for this country.
The new administration must use the goodwill it will encounter wisely. It will enable the new cabinet to get things done. Action and delivery must be clear. Organised business has been a willing partner to the last administration, rallying significant resources to aid the efforts of government to deliver critical reforms. We put together the Resource Mobilisation Fund to support the Energy Action Plan and are now working to do the same for the Freight Logistics Roadmap. These were among several programmes where we worked alongside Operation Vulindlela to deliver real progress. The unit proved the value of business and government working together.
Economists at the Operation Vulindlela conference put the value of the unit at anywhere between 2% and 4% of GDP, largely in terms of economic activity that was created or protected by it, from the ravages of load shedding and other challenges. The Bureau of Economic Research estimated that 2% could be added to economic growth if the reforms made by the unit are sustained.
Operation Vulindlela showed how important it is to have a dedicated delivery unit. It should be a central pillar of the new administration and be embraced by cabinet as a catalyst to make delivery happen across the different portfolios, coordinating reform across government and working to ensure business is involved at the appropriate points.
At the conference, there was much talk of the future. Areas that the unit could focus on include water provision and local government. These are both critical, as I’ve argued in this letter before. We cannot afford to face water shedding, which already some parts of our country are enduring. We also need local government delivery to work - there are too many stories of businesses shutting down or moving because they cannot get basic services in their areas. It is obviously also a major problem for communities, depriving them of business opportunities. Seeing Operation Vulindlela turning its attention to these difficult challenges would add to the positive sentiment surrounding the new administration.
This is incredibly important work and I wish the new cabinet all the best in delivering it. But they cannot afford to squander the optimism and confidence that many stakeholders will have. They will find a willing partner in business, which will enthusiastically back reform and delivery. The time for talk is over .
