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South Africans calling for pledges of greater economic growth

Following the appointment of a new Cabinet by President Cyril Ramaphosa on Wednesday night, the country has called for pledges of greater economic growth and commitment to rebuilding the country.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa) welcomed the consolidation of certain ministries, but said it remained concerned about the size of the Cabinet and the plethora of Deputy Ministers.

Ramaphosa’s announcement on Wednesday evening saw a consolidation of several economic clusters as part of the streamlined Cabinet, which was reduced to 28 ministries from the previous 36.

Minerals Council South Africa, Agbiz and Greenpeace Africa also welcomed the reduction.

Agri SA, however, in welcoming the President’s Cabinet, called for engagement with new officials about policy issues that farmers face on a daily basis.

In this respect, Agri SA said it liaises continuously with Ministers and senior government officials, and for this reason, stated that “a competent and trustworthy Cabinet is of utmost importance”.

The Organisation Undoing Tax Abuse (Outa), meanwhile, cited the Cabinet reduction “as a relief”, adding that it addresses the issue of “ministries for political reward”.

However, Outa said it “would have hoped for an equal reduction in the number of Deputy Ministers”, which barely decreased.

Seifsa CEO Kaizer Nyatsumba said that while it was commendable that the President had honoured his undertaking to reduce the size of the Cabinet, the federation believes he has “not gone far enough” with the 28-member Cabinet still among the largest in the democratic world.

Instead, he suggested that the country “would have been better off with a Cabinet of between 20 and 25 Ministers”.

Seifsa welcomed the retention of Tito Mboweni as Finance Minister, which was widely anticipated leading up to the announcement. Nyatsumba also expressed hope that the new Trade and Industry Minister Ebrahim Patel would be “much more accessible to business and strongly champion its cause within the Cabinet”.

However, Intellidex does not expect Patel’s taking over from Dr Rob Davies in the Trade and Industry portfolio “to lead to a mindset change on regulation required at the department”.

Overall, Seifsa welcomed the “generally good quality of leaders” appointed by the President, but promised that it would “watch their actions even more carefully and criticise them when [the federation] feels that they are letting the country down”.

Nyatsumba’s sentiment was echoed by North West University Business School economist Professor Raymond Parsons, who, in a separate statement, said the economic message emerging from the reconfigured and leaner Cabinet was “potentially a positive one for business and the markets”.

Parsons explained that, given the inevitable balance of political forces driving the shape and size of the new Cabinet, the streamlining and rationalising of certain Ministerial portfolios is a “welcome step of change” towards a more compact, less costly and more efficient government.

“President Ramaphosa's announcement recognises that turning the economy around and putting it onto a higher growth path is now the highest priority for the reconfigured Cabinet if the challenges of unemployment, poverty and inequality are to be successfully addressed,” Parsons said.

He explained that “credible and experienced reappointments” to the core economic portfolios – Finance, Public Enterprises, Trade and Industry and Mineral Resources and Energy – were likely to help government overcome the crucial challenge of boosting investor and business confidence.

However, Intellidex said it “struggles to see where there are real economic reformers, policy wonks and implementers entering Cabinet”, adding that it believes there are “some poor decisions”, including the merging of the Mineral Resources and Energy departments.

Agbiz, however, specifically welcomed the re-amalgamation of the Ministry of Agriculture with that of Rural Development and Land Reform, and the appointment of Thoko Didiza as the Minister to lead the executive in this portfolio.

Grain SA and Agri SA also welcomed Didiza’s appointment.

Intellidex added that the market’s expectations surrounding the new Cabinet had “ebbed and flowed” in recent weeks, with the bar for the Cabinet reshuffle “set low”.

The reappointment of Pravin Gordhan and Mboweni as Ministers and the fact that certain former Ministers had not been reappointed had, along with the announcement of a smaller Cabinet, enabled the President to meet market expectations.

As such, asset prices are expected to trade on the front foot going forward, it said.

Meanwhile, in a surprising turn of events, Ramaphosa appointed former Cape Town mayor Patricia de Lille to the Public Works and Infrastructure portfolio, which Intellidex cited as a “fascinating political move” but a decent choice, given her experience in the major metro area.

Intellidex also welcomed the appointment of Ronald Lamola as Justice Minister and Barbara Creecy as Environment, Forestry and Fisheries Minister.

Greenpeace Africa’s senior political adviser Happy Khambule, meanwhile, on behalf of the nonprofit organisation, called on Creecy “to truly make her department one that protects and defends our constitutional right to a healthy environment, and addresses the urgent and ever present dangers of the climate emergency that South Africa faces”.

However, Intellidex lamented the number of names highlighted by the ANC Integrity Commission in Cabinet, including David Mabuza as Deputy President and Mantashe.

Other concerns raised by commentators included many of the deputies being “young and inexperienced”, along with moving Dr Aaron Motsoaledi to Home Affairs, which Intellidex believes “sends a poor signal about visa reform for tourism and skills to come, given his handling of health and the National Health Insurance scheme”.

Stella Ndabeni-Abrahams returning as Communications Minister is “troubling given how she handled crises at the South African Broadcasting Corporation and stymied [broadband spectrum] auction progress in her last year”.

The Black Business Council (BBC), meanwhile, welcomed Ramaphosa’s decision in having women make up 50% of the Cabinet.

This, BBC president Sandile Zungu said, bodes well for the empowerment of women, who in the main, remain marginalised in society and corporate South Africa.

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