DEFINING THE ZUMA YEARS

Though Jacob Zuma was no saint when he ascended to the presidency, he managed to convince most observers that he was a man more sinned against than one who was sinning

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It did not take long for President Zuma to transform in the public’s eyes into the typical ‘Big Man’ African leader, driven by corruption.

He managed to cling to power for so long by centralising and personalising power, using cadre deployment, the quintessential tool in the Big Man’s bag of tricks. Thus, he packed the security services, public services, including parliament, and, of course, the ANC itself, with loyalist cronies who were willing to support him with their last breath.

By the time he left office on Valentine’s Day this year, Zuma’s negative legacy was so widespread and so profound, it had become structural and affected both the economy and society.

Mteto Nyati, Chief Executive of Altron, the JSE-listed ICT group, is of the opinion that Zuma’s departure and the succession of President Cyril Ramaphosa to the office could only be a good thing.

“There can only be positive changes in South Africa under the new leadership of President Cyril Ramaphosa—he is principled, transcends race, tribe, colour and has cross-cultural appeal. With the new government under President Ramaphosa, we hope that business will be engaged with policies through organisations such as Business Leadership South Africa (BLSA) and the CEOs Initiative.

“We believe the ICT sector is the catalyst for the South African economy and hope the new government will take a decisive look at ICT policies.

“Through education, South Africa will have a strong pool of skilled people who can drive our economy and boost its growth. President Ramaphosa is already involved in this effort through his foundation and we would hope to see how this thinking will translate into action in the government under his leadership,” he said.

In a brief interview with Deanne Chatterton, the CEO of Instinctif Partners, an international business communications consultancy with offices in South Africa, I asked how business, the government and civil society could work together to move forward in restoring Brand SA and she responded, in part, by saying, “Businesses, the government, labour and civil society need to acknowledge that they each have a vital role to play in positively influencing our future but equally, they need to recognise that collaborative efforts are a critical ingredient to achieving success. Brand SA needs some early wins that will re-energise us as a nation and motivate us to actively support initiatives that contribute to socio-economic empowerment (stimulating employment is one such example). We need our leaders to ensure that their actions mirror their words and we need leaders who put the needs of the country ahead of their own.”

Zuma may have left and been replaced by Ramaphosa but was celebration premature? “As a society, we must not underestimate the enormous challenge President Cyril Ramaphosa has in front of him. His rapid rise to the presidency is in no way a small feat and yes, we certainly need to take a moment to acknowledge this incredible watershed moment and to wish him well in his new role,” she said.

She added, “We might also want to breathe a sigh of relief that the possibility of a future of growth and unity now has a chance to seed. Arguably, we, as South Africans, have lost a decade under the leadership of Zuma. Restoration cannot happen overnight and to expect the impossible will only set us all up for disappointment. President Ramaphosa’s focus on unity within the ANC, the restoration of ethics and transparency in our political structures, and the installation of good governance and competent leaders in our SOEs is commendable.”

Dave Elzas, the CEO of the Geneva Management Group—a leading provider of fiduciary services to the financial services industry in South Africa—said it would not be an easy task to overcome the setbacks of the Zuma years, however, “A business-friendly, effective government focussed on delivery is most certainly likely to move South Africa back in the right direction.”

“In recent years, the slow economic growth that has characterised the South African economy has certainly stunted the country, both economically and socially. The slow growth happened at times when there was considerably more buoyancy in other parts of the world, and so it cannot be attributed to a general decline in the world’s economy. The inference is then, that the Zuma regime had a significantly negative impact on the economic fortunes of the country; for this reason alone, his removal from office is to be welcomed,” he said.

Agreeing with Nyati, Joff van Reenen, Director and Lead Auctioneer of bespoke property sales house, the High Street Auction Company said, “The swearing in of Cyril Ramaphosa as the South African President heralds the start of the country’s economic turnaround.”

He added, “There’s no doubt the change in leadership will prompt a surge of investor confidence, both domestically and internationally.

“One only has to look at the movement of the currency over the past couple of days to get a real sense of the more upbeat mood and we believe this is sustainable, considering Ramaphosa’s business-orientated background and his understanding that stability and economic growth are paramount for South Africa right now.”

Also feeling hopeful about the changes in the presidency is the South African Local Government Association (SALGA) who, in a statement given after the swearing-in of President Ramaphosa, said it expected the new leader to “infuse new energy and point towards new alternative solutions to help deal decisively with the escalating debt owed to municipalities, as well as the outstanding municipal debt to Eskom, and the issue of municipalities battling to afford to pay for bulk water supply”.

Karl Westvig, CEO of Retail Capital—a firm which provides businesses with an alternative funding solution to traditional small business loans—said the change in leadership was reflected by optimism in the SME business sector, saying, “It’s been incredible to witness the rise of civil society, the strength of the justice system and the robust institutions that have contributed to the change in leadership in South Africa. As a funder of the SME market, we have witnessed firsthand the negative influence of the previous leadership and then also the dramatic positive and optimistic shift post the election of Cyril Ramaphosa as the president of the ANC.”

Westvig added, “Under the Jacob Zuma regime, we saw slowing GDP growth, a depreciating rand and an incredibly pessimistic outlook for the country, which, in turn, led to a downturn in consumer confidence and, ultimately, poor performance in the SME sector specifically. We sometimes forget that the owners of these businesses are directly dependant on their profitability to feed their families and also hire people and feed their families. As a major contributor to the SA economy, a poor performance leads to job losses, never mind job creation.

“We could see a consumer-led and business-led recovery of the economy and they apply their cash resources to local investment and purchases.”

Indeed, the president said some very seductive things during his State of the Nation Address a day after his swearing-in to office, and as Westvig said, “South Africa is now on a path of expansion with more confidence in the leadership—as long as the decisions as to the make-up of the extended leadership team is for competent individuals with the best interest of the country at heart.”

Meanwhile, Michael Bolliger, an analyst at the UBS Wealth Management’s Chief Investment Office, is of the opinion that while the good times for the economy are just around the corner, we should approach cautiously.

In an analysis written with colleagues at the UBS Wealth Management’s Chief Investment Office, Bolliger said, “The resignation of President Zuma will likely brighten the country’s reform outlook, given ANC President Cyril Ramaphosa’s commitment to a growth-stimulating macro policy.

“Zuma’s exit may be followed by a cabinet reshuffle, greater efforts for fiscal consolidation and further governance changes at state-owned enterprises.

“This should lower the probability of a rating downgrade by Moody’s in March, although the risks remain considerable.”

Continuing with the note of caution, Grant Field, the CEO of FedGroup, South Africa’s leading independent financial services provider said, “There is no doubt that recent political developments have had a positive effect on the country’s collective psyche but it would be wrong to see the departure of President Zuma as the end of an era. Rather, it is part of the unfolding landscape of our young democracy.

“There is much cause for optimism, as we look forward to a clampdown on corruption and the implementation of a sound fiscal policy. These measures will no doubt provide a significant boost to our economy but this is not a time for civil society to become complacent. Businesses have an important role to play in forging a way forward and if our past is to be our teacher, one of the most important lessons from recent history is that bad things can happen if good people do nothing.”

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