South African business leaders are becoming frustrated with the pace of reform under President Cyril Ramaphosa. His cabinet choices and spending pledges haven’t helped.
His ascension to a national leader in February last year was greeted with so-called “Ramaphoria,” as the rand and government bonds surged on expectations he would reform the struggling economy, crackdown on corruption and replace non-performing cabinet members. Much of that rally was relief at seeing the end of Jacob Zuma’s nine-year tenure marked by corruption and few policy decisions. Since the end of the month when Ramaphosa took power the rand has declined 20% against the dollar.
Patience for change in the business community is running out. Some key corporate figures say the cabinet Ramaphosa named after his May election victory hasn’t brought in enough fresh ideas, while his state-of-the-nation address in June was seen as full of feel-good spending pledges and no detail on funding.
“Very tough decisions have to be taken. We have not yet seen any willingness to take those decisions. Timelines are short and pressures intense,” said Martin Kingston, executive chairman of Rothschild & Co.’s South African unit and vice president of the country’s main business lobby. “As a country, we want to have our cake and eat it, and everyone else’s cake.”
While Ramaphosa vowed to save the struggling state power utility, he also promised bullet trains and a new city. That’s in a nation where most municipalities struggle to provide basic services like housing and sanitation, and after South Africa’s economy posted its biggest quarterly contraction in a decade and investor confidence slid to near multi-year lows. The last-remaining investment-grade rating at Moody’s Investors Service is under threat.