There had been a lot of speculation about big changes in President Zuma’s new Cabinet, which was unveiled this evening. While there was significant change elsewhere, I am not convinced that there was much change in the key economics areas. There was a big shift with Pravin Gordhan being moved from the Treasury to tackle challenges in Local Government, but he is succeeded by his deputy Nhlanhla Nene, so there is also big continuity. The two left-leaning ministers who are of big importance to business – Rob Davies at the dti and Ebrahim Patel at Economic Development – are remaining in-situ. A new ministry for Small Business Development may or may not be a good thing, depending on how it is established and whether it makes a real positive contribution to small business under Minister Lindiwe Zulu. Similarly, a lot is riding on the shoulders of new Public Enterprises Minister Lynn Brown, and on those who will be steering the mining, Labour, Telecommunications and Water Ministries. Having Cyril Ramaphosa as Deputy President may be good for business, as he has run businesses, and has done spectacularly well out of it. But he will have a lot else to do as Zuma’s right hand man. An immediate hope is that he does more to settle labour tensions in the mining industry from the Presidency than he ever did from the boardroom. Let’s get a short comment from two top experts on links between industry and government
Duane Newman from Cova Advisory:
There is definitely stability in the economic cluster. Rob Davies is staying on at Trade & Industry which means consistency at Director General level as well. The new Finance Minister Nene is good news as he has been Deputy Minister for 6 years so he should know the job quite well already. That Pravin Gordhan has moved away from Finance should not be as bad news as he should fix local government – which is where service delivery impacts many South Africans. The restructure of creating a Communication Ministry with Brand SA included should improve the branding of South Africa internationally. I think that Cyril Ramaphosa as Deputy President means that government should be more business friendly. A new Small Business ministry seems stillborn. Its role needs to be clearly defined as small businesses struggle to engage with government. Small businesses just don’t have the resources and time to spend time in meetings with government. I hope the Chambers of Commerce role is now elevated. I am still not convinced on the role of Economic Development ministry. I believe this still needs to be reviewed.
Professor Raymond Parsons From NW University:
‘The new Cabinet creates a mix of positive and negative perceptions. To begin with, unfortunately the widespread anticipation of a ‘lean and mean’ Cabinet did not materialize and the inevitable need to repay political debts and keep an ideological balance seems to have heavily dominated the appointments. It is very much President Zuma’s own team, given the political dynamics, even though the underlying message remains one of capacity-building and the need to ‘deliver’. Confirmation of Cyril Ramaphosa as Deputy President is a considerable asset to the Cabinet and the country, given his experience of organised labour, business and politics, as well as his participation in the drafting of the National Development Plan (NDP). He is potentially in a strong position to exert the necessary political clout to help push things along.
The accession of Deputy Minister Nene to the portfolio Finance Ministry was not unexpected. He comes with the necessary experience of the National Treasury stretching over several years, but has big shoes to fill at at a critical moment in SA’s business cycle. I am agnostic about whether the creation of a Small Business Ministry will be a success, given the mixed experience of similiar structures elsewhere, but we should chew it and see. There is no doubt about the real challenges facing small business and the need to urgently implement the necessary solutions to enhance their role in growth and job creation. Apart from the time it will take to settle in the new Ministry, it may also become another casualty of the ‘turf war’ and conflict over economic policy that has been apparent between the National Treasury, the DTI and Economic Development.
The move by Gordhan to Cooperative Governance brings an efficient Minister with a good track record to bear on the serious delivery problems at local government level, and should be welcomed. One suspects, however, that among investors and businesspeople the jury will remain out for the time being pending real outcomes around the implementation of the commitment by President Zuma to ‘radical economic transformation within the framework of the NDP”. Business wants to be treated more as a genuine partner in future development, rather than as an ‘alien force’. If the key targets of the NDP are written into the performance contracts of Ministers and outcomes are rigorously monitored, then in those instances where continuity in the appointments has been favored over change may work out. We still need to see whether the new cabinet as a whole can project the necessary policy coherence which creates the certainty and predictability required by investor confidence to boost economic growth.
A bit of change, but not enough to convince me that this is a new government team that is good for business. Let’s give Zuma credit for having got rid of a few underperformers, though not all. Many have just popped up elsewhere.
Some Tweets on the New Cabinet:
griffin (@watkykjy): Joemat-Pietersen new minister of energy. O jirre. Winter is coming. Forever.
SaffaZimbo (@SaffaZimbo): Most successful ministry in #ZumaCabinet will be small business. There are going to be a lot of smaller businesses in SA in 5 years.
M. Ntshobololo (@Mthetheleli15): Cowboy Beki Cele is back on Zuma’s cabinet,ironically he was fired not long ago for not being fit for office.
Pieter du Toit (@PieterDuToit): New propaganda minister, Faith Muthambi, was member of parliament’s Nkandla committee; she denied delaying tactics.
Lerato Mbele (@BBCLerato): Tina Joemat-Peterson given a key portfolio like Energy Ministry, after a scathing report by Public Protector. Am I missing something here?
The Brain (@za_Thinker): Bad ministers never really get fired. Just redeployed to stuff up another portfolio. #CabinetAnnouncement
Comedy Central AF (@ComedyCentralAF): Disappointed that Khulubuse wasn’t made Minister of Fast Foods 😦 #newcabinet #TheFig)
Nickolaus Bauer (@NICKolausBAUER): #ZumaCabinet We didn’t get a ministry of information. But we got a new communications ministry that will control SABC, ICASA & GCIS #Ominous
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