Ramaphosa's First 100 Days

Ramaphosa’s first 100 days And what it tells us about the shape of the South African state June 6, 2018 2 Rhamaphosa's first 100 days

The Shape of Ramaphosa’s Presidency

Cyril Ramaphosa came to power in South Africa 100 days ago facing a huge challenge: restore the Graphing the key changes – and credibility of the Presidency and put key remaining question marks South Africa back on the growth ▪ Cronyism and looting are now off the track after almost a decade of agenda disastrous rule and entrenched corruption by Jacob Zuma, whose ▪ Radical economic transformation is not years in power came to be known ▪ State-led hostility against the private as “state capture”. Even for someone sector is out with as varied a skill-set as Mr Ramaphosa’s - who has succeeded ▪ But a mixed economy, not free-market approach, replaces it as a trade union leader, politician and businessman – the challenge to ▪ Economic policy and state‐owned deliver what has been dubbed enterprises are no longer primarily “Ramaphoria” is enormous, for he geared to rent seeking needs to align this to society in a ▪ But what replaces this economic way that has rarely been done. approach is less evident

His political geometry, employing a careful ▪ Political risk should recede but political distribution of power in his cabinet and noise and complexity are here for the benefiting from consultation with concentric medium term kitchen cabinets, is both hazardous and necessary. Mr Ramaphosa has moved with ▪ That means rule of law, including both determination and deliberation to start property rights, remains embedded rebuilding confidence in the Presidency and government in what he calls the “New Dawn.” ▪ Nefarious policy making is out, but Mr Ramaphosa’s conundrum of renewing a political and regulatory complexity divided party after winning with slim majority remains subject to court challenges to and trying to win a clear mandate in the next deal with policy certainty election will show that his agenda is clear, but how far he can go is less so.

An investment summit is planned for August 2018. To prepare the ground, Mr Ramaphosa has appointed three private-sector envoys, and one from the public sector, to comb the globe for investment and to indicate that South Africa is open for business and the state friendly to local and foreign providers of capital. Smaller private-public sector summits have been convened on youth employment, and small and medium-sized enterprise development.

Networks, [prime] ministers and kitchen cabinets Mr Ramaphosa is not operating with a single formal cabinet but is drawing on concentric networks built up over decades. His networks are from both trade unions and business. When Mr Ramaphosa faces an issue or a governance challenge, he activates these networks. A Presidency of summits In addition, he has vested significant authority in a pair or compacts of cabinet ministers whose roles appear akin to prime ministers. These are Public Enterprises Minister Pravin As much as his agenda, it is Gordhan and Mineral Resources Minister Gwede Mr Ramaphosa’s style that is different. Mantashe. From his perch at Public Enterprises, Mr Gordhan is a de facto anti-corruption czar. He is He has varied facets to his political assembling a war-room at Public Enterprises to make persona. One is an ability to negotiate major changes at state-owned enterprises. across interests. It is a characteristic honed Mr Mantashe is leading Mr Ramaphosa’s efforts to by his years as a trade union negotiator ensure that land becomes an asset and not a liability of and his role as chairperson of the his presidency. Mr Mantashe is the de facto land affairs minister, and Mr Ramaphosa’s envoy on land along Constitutional Assembly and of the with the ANC MP Mathole Motshekga, and MP Vincent National Planning Commission. Smith, who will chair the constitutional review committee that is the centre of debate on expropriation It is thus unsurprising that convened summits already without compensation. The Public Works Deputy shape his presidency. He has drawn together disparate Minister Jeremy Cronin is operating as intellectual to interests to begin negotiating the outcome of drive more clear and focused land redistribution policy consultative approach to land, mines regulation, and legislation without the need for a constitutional jobs etc. amendment on expropriation. A smaller, second process ensured that the negotiations for a new mining charter — as contained in an amendment to the Minerals and Petroleum Resources Development Act — were taken out of court and onto negotiating tables. In this way a protracted battle in mining was contained and brought back to negotiation. Gwede Mantashe, now Mineral Resources Minister, has failed to pass a new Mineral and Petroleum Resources Development Act (MPRDA) in the first quarter of 2018, but there is goodwill between state and industry.

Cabinet reshuffle, disabling networks and SoE reforms

By reshuffling the cabinet forced Premier Mahumapele’s with the new board appointments reshuffle and removing ten resignation, thus slowly of the SOEs. consolidating his position in the ministers implicated in state At the South African Revenue ANC and dismantling patronage Services (SARS) the commission of capture, Mr Ramaphosa has networks in ANC provinces. brought credibility and Inquiry headed by Supreme Court Mr Ramaphosa has lived up to of Appeal Judge Robert Nugent, authority to government. expectation on reforming state assisted by respected lawyer He has steadily started disabling the owned enterprises that were Michael Katz, is expected to submit crony networks that had become hollowed out with poor governance a final report by November. The the effective purpose of and has changed the boards of Inquiry will focus on the period of government. One of the major risks three state-owned enterprises at between April 2014 and the end of on his horizon is the so-called the heart of the state-capture story: March 2018, linked to suspended Premier League. This is the name Denel, SAA, SA Express, Transnet SARS head Tom Moyane’s tenure, given to the powerful block of and Eskom. Parliament has kept up who is in addition facing disciplinary provincial leaders in the African the pressure on state-owned proceedings. enterprises with a succession of National Congress who have The President has also confirmed public inquiries, especially leveraged their control of provincial the creation of review panel to deal procurement practices. budgets to build substantial political with allegations of corruption in the clout. The three are: Deputy Minister Pravin Gordhan’s mandate state security agency and to root President David Mabuza (previously to address problems in SOEs, out the compromised shadow state Mpumalanga premier); the ANC rebuilding and strengthening created by Former President Zuma. secretary-general Ace Magashule governance, rooting out corruption, The head of State Security, Arthur (previously Free State Premier) and restoring their financial position and Frazer, who was implicated in Former North West Premier Supra ensuring that they fulfil their corruption dealings, was moved to Mahumapelo. Ramaphosa’s economic and developmental Correctional Services and is now administration in taking over the mandates is slowly bearing fruit. subject to a court challenge by the provincial government of North The appointment of Phakamani Democratic Alliance to force him West due to service delivery Hadebe as Group Chief Executive of out of government completely. protests and corruption; ultimately Eskom was widely welcomed along

4 points of risk

in the country during Ramaphosa’s the resolution: that it will not be Winter first 100 days as president. Labour, allowed to harm food security and business and communities are growth. When he speaks to rallies There is always a rise in protests in working to forge a new social and to mass gatherings, he winter in South Africa. The compact around job creation, which emphasises expropriation which is a character of his presidency - that will form the basis for a broader wildly popular symbol of a wider “Ramaphoria” -has also raised compact around growth, redistribution of wealth. expectations and this may impact development and transformation. on political stability. Mr Mr Ramaphosa will hold a Job The recent ANC land summit, which Ramaphosa’s rise has also Summit in September to produce invited civil society to participate in emboldened provincial interests in far reaching measures to create its deliberations to develop a provinces run by the iron fist of the jobs. The joint initiative wiil involve position on land expropriation Premier League. The Mahikeng all social partners in finding social without compensation, was protests against Supra compacts on jobs and examples of unprecedented. The ANC National Mahumapelo are replicated on a collaboration and partnerships to Executive Committee, the party’s smaller scale in Mpumalanga and investigate recent agreements on a highest decision-making body, the Free State, where different national minimum wage and labour agreed to consult traditional leaders factions see an opportunity to stability and broader society before ratifying loosen the stranglehold on the consolidated position that was provincial tenders, so more tabled by the summit on using networks can benefit. Election 2019 Section 25 in the constitution to implement the policy of Ramaphosa is quickly moving to cut The last opinion polls put the ANC expropriation without off money flows by clamping down support at 50% if an election were compensation. Mr Ramaphosa and on access to provincial finances. to be held today. It is going to be a the ANC Committee on land reform This is most visible in the North tough campaign for the ANC seems to be accepting legal West, which has been placed under although the impact of Mr consensus that the constitution administration. The balance of Ramaphosa’s election has been makes provision for expropriation forces under Ramaphosa is finely good news for the party. Mr and what is required is appropriate balanced: he won with only 179 Ramaphosa recently met with the legislation rather than an votes at the party’s Nasrec Independent Electoral Commission amendment of the constitution. conference in December. He following speculation of an early There seems to be great consensus possesses state power and the election in October or November. around the setting up of a high- ability to deploy but the Indications are that elections will level panel located in the fundamental tension of his only be held early next year given Presidency to align government’s presidency is that as he unwinds the the levels of preparation required to efforts regarding land reform and current patronage networks; so run a national election. guide the process at the helm of more networks can benefit, he the executive. increases his political risks. Land

Labour Mr Ramaphosa is doing what he does well: weighting his messages The unions are in a weakened and with different parts of the divided state with the split of the SA parliamentary resolution on land Federation of Trade Unions (Saftu) expropriation without from the Congress of South African compensation. When he speaks to Trade Unions (Cosatu). Cosatu has investors and to agri-business, Mr claimed that 300,000 jobs were lost Ramaphosa emphasises the rider to

Movers & shakers in the Ramaphosa presidency

In addition to the circles and networks Trudi Makhaya Ramaphosa uses, he is steadily building up a set The newly announced economic advisor to Mr Ramaphosa is a top economist in South of movers and shakers who run his presidency. Africa. She’s going to coordinate the work of the Presidential Investment envoys and ensure the economy is at the centre of the Presidency. Ms Makhaya is also a columnist in Business Day and ran her Steyn Speed own consultancies called Makhaya Advisory Services. Speed is Mr Ramaphosa’s political advisor and de facto Chief-of-Staff. He is a long-time aide and confidante. He has moved with Mr Ramaphosa through various his life-cycles Chippy Olver including his times in business and in politics. This former Director General of Environmental Mild-mannered and adroit, Mr Speed is an ace speechwriter Affairs was the key technocrat in the Ramaphosa and strategist. He is a veteran ANC member and official and has campaign, in keeping core supporters onside also served the governing party for decades. and running the technological spine of the campaign. His experience as a member of the ANC task team to retain its base in the Nelson Mandela Bay municipality, made Mr Olver a crucial cog in the wheel to maintaining party support for Mr Ramaphosa. Khusela Diko Ms Diko is Ramaphosa’s spokesperson and communications advisor. She used to be ANC spokesperson and she commands a strong Senzo Mchunu support base in the SA-based local and He is now full-time organizational head of the international media corps. Like most ANC ANC and in charge of the party’s media people, Ms Diko is also a seasoned politician and powerful branch network. It’s a vital position activist. She is dispassionate and unflappable and had the ear to shore up Mr Ramaphosa’s position in the ANC. of Mr Gwede Mantashe when she represented the governing A staunch Ramaphosa ally who ran the election party at its Luthuli House headquarters. campaign on the ground, By stepping back from a bruising war at the ANC conference at Nasrec in December, Mr Mchunu secured an easy onboarding for Mr Ramaphosa as party Bejani Chauke president. It is widely believed that there was some Mr Chauke is Ramaphosa’s chief political gerrymandering of the count for the position of party secretary- strategist and advisor. He is Mr Ramaphosa’s general, which Mr Mchunu contested. longtime parliamentary counselor and is a He is also crucial, with Police Minister Bheki Cele, to ensure that sharp and strategic mind. He devised Mr. the party’s massive KwaZulu-Natal membership and its unhappy Ramaphosa’s campaign and ensured that the and warring provincial leadership do not erupt into the kind of Zuma family was brought onside when his candidate won the political instability besetting the North West province ANC race at Nasrec. Mr Chauke is a general advisor, but his key role is to ensure that the ANC wins a significant victory in next year’s election, as that will open up Mr Ramaphosa’s path to a successful two terms. In addition, a significant win will give Zizi Kodwa the President greater leverage to shape the ANC to Head of the Presidency in the ANC. The party’s support him. former spokesperson is back in a much stronger position in the governing party — he is effectively Mr Ramaphosa’s eyes and ears at Luthuli House. Mr. Kodwa was always much more than a spin Marion Sparg doctor — he is an adept political fighter and in a divided ANC, he This former MK soldier is a longtime will prove important political cover for Mr. Ramaphosa who Ramaphosa supporter based in the ANC needs Luthuli House to be fighting in his corner. head-office to manage his office. She has While they may say otherwise, both the secretary-general Ace worked closely with Mr Ramaphosa in his Magashule and his deputy Jessie Duarte are not in Mr role as ANC secretary-general and also at Shanduka the Ramaphosa’s corner. In a crucial election year, he needs the party company, which holds his various assets. headquarters to swim in the same stream as he is.