And remember a new president is only the beginning. President Ramaphosa has said that there will be major cabinet changes and a downscaling of positions and posts. All this aimed at improving efficiency and cutting costs. The correct allocation of resources to help so many needy South Africans will be a major boost to the economy. I find that after years of being more negative than most people, I am now more optimistic than most. Just maybe South Africa can boost its GDP (Gross Domestic Product) growth to two percent this year and even three percent next year.
While this is still not enough to make up for the lost decade, it is vastly superior to the one percent or less per annum achieved over the last few quarters. Changes to the cabinet will help. It seems ministers implicated in State capture or those who have not delivered the goods will be the first to go. And the stars fired by President Zuma will be back. Former Finance Minister Pravin Gordan and past Tourism Minister, Derek Hanekom are expected to get top positions. President Ramaphosa wants a mean and lean parliament – a bloated executive team will be a thing of the past. This alone will cut millions in expenditure.
These changes have created over a very short period, a major improvement in business and investor confidence e.g. the JSE (Johannesburg Stock Exchange) All Share Index rose by nearly four percent the day after President Ramaphosa was sworn into office. Now if that is not a vote of confidence I don’t know what is.
The current enthusiasm is contagious but still it is not going to be easy to keep the momentum going. We need major public sector reforms and major policy changes to spur international investor confidence. The stronger Rand and lower inflation will help but we may still be facing a downgrade by international ratings agencies.
Dr Iraj Abedian, founder and chief executive at Pan-African Capital, said while the country had become “ecstatic” on the political ground, it had not yet dealt with the unwinding of a sophisticated, extractive predatory system and the economic damage it did. However, unlike many other countries, South Africa had a unique attribute – all the remedial capabilities required were inside the country and not outside it, he said.
On a lighter but happier note. I think we can get too bogged down in political and economic details so I want to touch on a conversation that took place the day after President Ramaphosa’s appointment. I was speaking to my eldest daughter, Frances, named after Saint Francis, the patron saint of animals. Her name is so apt. She lives her life in communion with animals, particularly horses.
I asked her what she thought of our new President and she said : “I don’t have any thoughts. I don’t follow that stuff”. This was a reality check for me. I think I get too involved!
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