CAPE TOWN – Almost two decades after Nelson Mandela was thwarted in his efforts to name Cyril Ramaphosa as his successor, African National Congress party members have now elected him as their leader. Of course, Ramaphosa is not yet president of South Africa. But expectations are already high that economic policy will take a new direction under his guidance. So what will a Ramaphosa presidency have to do to restore growth and ensure social progress in Africa’s lagging economic powerhouse?
Since the 2008-2009 recession, South Africa’s economy has stagnated, held back by leadership failures and plummeting confidence. Unemployment has increased to 27.7%, the highest rate in 13 years. GDP growth will amount to 0.7% this year, and stood at just 0.3% in 2016. Public debt is rising, and real household income per capita has flatlined. Inequality remains extreme, and social discontent is high.
The necessary commitment to coherent policies remains elusive, despite publication of a National Development Plan in 2011. Collaboration between business and government leaders to strengthen key reforms and forestall credit rating downgrades floundered when finance minister Pravin Gordhan was sacked from President Jacob Zuma’s cabinet in March.
The worsening economic outlook has given rise to divergent prognoses. Some insist that the hatches must be battened down: fiscal consolidation, curtailment of union power, deregulation of markets. Others call for radical transformation: state-led industrialization, free tertiary education, land redistribution without compensation.
**This article by Project Sundicate was published before Cyril Ramaphosa became South Africa’s president.