SO MUCH TO DO, SO LITTLE TIME

SO MUCH TO DO, SO LITTLE TIME The DA finally has its hands on the levers of power in six portfolios, but can it overcome the resistance it's bound to face? Claire Bisseker up about 17% of cabinet posts against the ANC's 71% see graph . Only time will tell if these ministries will be sufficient to allow the DA to help to make a decisive difference to growth and employment over the next three to five years. Of course, this assumes the GNU lasts that long and that DA ministers manage to overcome the potential resistance of recalcitrant bureaucracies and deployed PARTY SPLITS Relative cabinet representation GOOD 5, 2% PACIFP O, Al Jamaah 1% 2% FF+ 2% ANC 71% Note: Citi assigns 2 points for a minister position, 1 point for deputy minister and half a point fora shared deputy minister position Source: Citi research, The Presidency allow it to make a meaningful contribution to the economy and should improve investor sentiment and market optimism in the near term. However, she warns that it will take time for the new appointees to familiarise themselves with their portfolios and the workings of the national executive, even as they push hard to make a difference. "The bottom line is that the nearterm outlook is likely to be positive," she says, "while the medium term will likely come with more complexities and uncertainties as individual parties try to further their policy agendas, especially as we near the next election cycle and parties begin to compete for votes." Krutham MD Peter Attard Montalto makes a similar point, noting that the new cabinet will not be able to jump magically to a progrowth stance. "It will take time for it to bed in and new ministers to audit and undertake remedial action in departments before they can start to shift the dial on growth ," he says. "Equally, many ministers will find themselves hemmed in by ANC deputy 'spies'," he adds. "We should also remember there are many fights to come over the formation and then policing the implementation of the GNU policy agreement." Ann Bernstein, who heads the Centre for Development & Enterprise, is unimpressed by the size of the cabinet, which she fears is so bloated it will be difficult Hopes are high for the new gov ANC cadres within their departments. ernment of national unity "Now the hard work and heavy lifting GNU cabinet, but South Africa starts," says Business Leadership South mustn't get carried away by Africa CEO Busisiwe Mavuso, who urges the significance of the moment. The key that existing progrowth initiatives be question is whether the 32person cabin fasttracked and that the new ministers et is fit for purpose and, especially, appoint competent senior public servants whether the businessfriendly DA can to execute policy and strengthen govshift South Africa's growth dial with just ernance. the six ministries it has been granted. Citi economist Gina Schoeman Judging from the positive response of believes that the DA's cabinet posts will both the bond and the equity markets early in the week, the business and investor community is cheered by the finalisation of a cabinet heavily dominated by the ANC and the DA. The DA did not gain control over the economically important portfolios of finance, trade, industry & competition or electricity & energy, which went to competent, senior ANC leaders, but it did get deputy minister positions DA What it in all three departments. 17% means The The DA has outright DA has 17% leadership of six minisof cabinet tries public works & minister infrastructure, agriculture, posts to the home affairs, communicaANC's 71% tions & digital technology, but it could basic education, and still make a forestry, fisheries & the meaningful environment. contribution A relative cabinet repto the resentation model by Citi economy shows that the DA makes ACDP I 0.8% for it to act cohesively and take collective responsibility for decisions and their implementation. "What South Africa needs now is a more decisive and deepened agenda for economic and other reforms if we are to achieve the economic growth we need and many millions more jobs: she says. "A large cabinet filled with divergent viewpoints could very likely be a place to which any serious proposal for reform will go to die slowly as it is whiteanted away through endless consultation and procrastination." A huge construction zone Of the ministries allocated to the DA, four public works & infrastructure, agriculture, home affairs, communications & digital technology are likely to have the biggest economic impact in the short to medium term, though nothing is more important than education for the country's longerterm prospects. South Africa suffers from huge infrastructure backlogs in energy, roads, rail and ports. This constitutes the biggest drag on economic growth, but the previous government largely failed to galvanise public and private fixed investment to deliver the huge infrastructural push it promised would drive up the growth rate. This is partly because of a lack of project preparation and technical skills within the government but also because of the ANC's inherent resistance to partnering with private capital. If the new DA minister of public works & infrastructure, Dean Macpherson, the party's former shadow minister of trade & industry, can overcome these obstacles, billions of rand in private fixed investment into public infrastructure could be unlocked. Macpherson tweeted that he looks forward to working with his ANC deputy, the former head of the same ministry, Sihle Zikalala, whom he has known for many years. "Together we will make a great team to turn South Africa into a massive construction zone which will drive muchneeded job creation," he tweeted. IN CONTEXT GNU composition of National Assembly e Ln Ls, cr, o d .°A.E,14711 0 E m Removing the skills constraint Home affairs is the ministry that is possibly ripe for delivering the quickest wins, given that much of the reform legwork the overhaul of the work visa system and expansion of the eVisa system to 34 countries has been completed. Despite these reforms, the department isn't doing nearly enough to alleviate the skills constraint by making it easier for skilled immigrants to enter the economy. This is both because of inefficient staff, systems and processes and because of a deepseated ambivalence to allowing foreigners entry for fear that they rob locals of job opportunities. In fact, study after study has shown that skilled migrants create more jobs for locals, more growth and more wealth as the DA well knows. The new minister, Leon Schreiber DA leader John Steenhuisen's strategy & communications adviser will likely light a muchneeded fire under this sclerotic department. d DA ministers will be < I ci able to pick their cx 0 z co own directorsgeneral DGs . Prof Miriam Altman of the University of Johannesburg's school of economics notes that there's been a tendency for new players to throw out old DGs and not realise that things go faster if they build on the good that's already there sometimes all that's needed is a bit of reshaping or strengthening of delivery modes. "If new parties think they can make fast change by driving new policies and replacing staff, that they are smarter than everyone who was there before, they will find they are still talking about it in 2029 and delivering little," she warns. However, when it comes to agriculture now headed by Steenhuisen Bureau for Economic Research director Prof Johann Kirsten predicts "the road ahead is littered with traps set up by government officials that could lead to the minister's failure". He says the department which previously included land reform & rural development was known for its inefficiencies and poor staff and skills. There is also "ample evidence" of deliberate attempts by middle management to stall the implementation of new initiatives, including President Cyril Ramaphosa's ambition to establish a land reform agency and release state land to the intended beneficiaries. Kirsten fears making land reform & rural development a separate portfolio could allow the rot in the land reform programme to persist. But this doesn't mean Steenhuisen should think there's a need for new plans. "South Africa's agriculture sector has the potential for inclusive growth and job creation: says Kirsten. "However, this cannot materialise if there is a continuous introduction of new plans without properly implementing the existing ones and addressing the funda 00 6 UDM I 0.8% u_ LI. I1.1U 0 Government of national unity GNU 72% of total seats Source: Citi research, parliament Dean Macpherson: Public works & infrastructure minister A road filled with obstacles e e The milliondollar LC LO question is whether Sony Malatsi: Communications & digital technologies minister mental issues that constrain the sector." Wandile Sihlobo, chief economist of the Agricultural Business Chamber, says the agriculture and agriprocessing masterplan should be the new minister's starting point as it has wide buyin and could deliver a 15% increase in the sector's gross value added. It should be paired with, among other things, the continuous release of state land to beneficiaries along with title deeds; decisive action over animal disease crises, which harm exports; and a strong focus on fixing water, road and rail infrastructure and other local government failures, without which the sector cannot succeed. Elevating national literacy Education experts have been warning for some time that if South Africa continues to ignore its illiteracy time bomb it is dooming children to ignorance, and the economy to failure. For not only is education the surest way out of poverty, but without adequate skills, the economy's growth will forever remain capped. It would be reasonable to expect the new DA minister of basic education, Siviwe Gwarube, the party's former chief whip, to use the Western Cape education department's approach, and its focus on raising reading levels, as her internal playbook. After all, one of the DA's election promises was to "triple the number of grade 4s who can read for meaning". About 81% of South Africa's grade 4s cannot read for Ann Bernstein meaning, according to the most recent Progress in International Reading Literacy Study. Fortunately for Gwarube, studies in North West, the Eastern Cape and Limpopo have shown that it's possible to achieve significant improvements in reading and maths in just two years with wellstructured and wellfunded programmes. Based on this evidence, the Western Cape is rolling out similar programmes in grades 13 in all Afrikaans and Xhosa schools. Gwarube would be well advised to undertake a granular national reading survey of all grade 14s as the basis for launching a national campaign to improve reading and maths , accompanied by the introduction of national benchmark testing of pupils in grades 3, 6 and 9, as the DA already does in the Western Cape. However, she will need to tread carefully. Education could easily become the biggest policy battleground, with powerful teacher unions likely to try to sabotage the new minister at every turn if they feel their hegemony is threatened. A long todo list Duncan McLeod, editor of TechCentral, notes that the department of communications has had at least 14 ministers in the past 30 years and has become "a dumping ground" for ineffective ANC cadres. "The ICT sector will be hoping the DA's Solly Malatsi brings some stability to the portfolio," says McLeod. "Malatsi is a bit of an unknown quantity in the sector. He is young, too just 38 but this might be a good thing as this portfolio has been crying out for someone with technical nous, someone who has a deep understanding of the forces shaping the IT universe." Malatsi will have his plate full. He must fasttrack the stalled process of rewriting the Electronic Communications Act ECA and the Broadcasting Act, neither of which is fit for purpose. And he'll need to provide political guidance on Canal+'s bid to buy MultiChoice, which could be scuppered by strict foreign ownership restrictions in the ECA. He will also have to lead a reconfiguration of several stateowned enterprises, including dealing with broadcast signal distributor Sentech, which could soon face an existential crisis as the world moves to internet streaming; the Post Office, currently in business rescue; and the SABC, which needs a new funding model. "Figuring out what to do with the State IT Agency, which has suffered from corruption and mismanagement for decades, is more difficult," says McLeod, "but a cleanup of the agency's board is probably a good place to start." And if that wasn't enough. Malatsi will inherit the mismanaged digital migration project, which is 14 years past its original deadline for completion. Deputies, schleputies The DA has also been given six deputy minister positions. Holding these posts provides a way for the smaller GNU parties to have eyes in the room and act as a check on power, rather than being an opportunity to exercise real influence. The exception would have been deputy minister of finance, had the DA's Ashor Sarupen held the post alone. Instead, he becomes a second deputy minister alongside the incumbent, David Masondo. Masondo has performed well as the political head of Ramaphosa's flagship project, Operation Vulindlela, which is growing in stature as the government's ace delivery unit. So, he is unlikely to cede this part of his portfolio to Sarupen, Helen Zille's former chief of staff and a former DA chief whip. But it seems equally unlikely that Sarupen will get responsibility for the giant Public Investment Corp, a stateowned entity with R2.548trillion in assets under management, which currently falls under Masondo's purview. The question then is what will Sarupen actually be allowed to do? For Steenhuisen the GNU is an opportunity for the DA to "introduce our track record of governance excellence, zero tolerance for corruption, and pragmatic policymaking at the highest level of government in our country". But he concedes that "none of this will be easy, and we must not get carried away by the significance of the moment. The truth is that the road ahead will be a difficult one". The reality is that while the DA has been given some relatively important appointments, it is going to face an uphill battle to turn this opportunity into growth and jobs at a time when the economy has stalled and the citizenry's patience has worn exceedingly thin. Bernstein puts it well: "The time for words and endless promises is over. This new cabinet whatever its size needs to agree on its priorities and an agenda for deepened and speedy economic reform. They have a country to fix and millions of people living in poverty and desperate for work." If the new cabinet can adopt this as its lodestar, then the fledgling GNU may yet succeed. It simply has to the stakes are too high for it to fail South Africa now. x A large cabinet filled with divergent viewpoints could very likely be a place to which any serious proposal for reform will go to die slowly as it is whiteanted away through endless consultation and procrastination