Businesses urge Ramaphosa to pick better ministers

Cyril Ramaphosa

South Africa’s biggest business group urged President Cyril Ramaphosa to use an upcoming cabinet reshuffle to improve the performance of a government that’s been slow to deliver on promises of economic reform.

In the letter seen by Bloomberg News, Business Unity South Africa (BUSA) slammed the performance of Ramaphosa’s administration in areas ranging from energy policy to safety and security.

Business Leadership South Africa, another major group, also signed the letter.

Dated Jan. 24, the letter was first reported this weekend by News24, a South African news website.

Ramaphosa, who came to power in 2018 promising swift economic reform and a crackdown on corruption, has come under stinging criticism from business, opposition parties, and the ruling party’s labour union allies for its failure to quickly enact policies to ignite growth in a stagnating economy.

Rotational power cuts, intermittently applied since 2008, are at their most intense ever, with blackouts having occurred consecutively for more than 100 days.

Ramaphosa, 70, who won a second term as head of the African National Congress in December, needs to replace his transport minister, who’s taking up an executive role in the party, and fill the vacant post of public service and administration minister.

He’s also expected to replace his deputy president, who resigned after being ousted from the matching role in the ANC, and is being urged to shake up ministries that oversee the provision of energy, freight rail, and port services.

“Many investors simply don’t believe our plans,” BUSA said in the letter. “To shift this view, they will need to see consistent” delivery, the organization said.

Vincent Magwenya, Ramaphosa’s spokesman, declined to comment.

BUSA named six ministries it feels need “special attention,” and laid out the group’s concerns about them as follows:

  • The Ministry of Mineral Resources and Energy has overseen “the slow progress of energy procurement and reform” and the mining industry “is in serious decline,” it said. It cited Gwede Mantashe, the current minister, and his championing of the coal industry, saying the official shouldn’t be “a flag waver for any particular energy technology.” Minerals and energy should be overseen by separate ministers, it said.
  • The new transport minister will need to move swiftly to resolve a “logistics crisis” that’s seen coal shipments to South Africa’s main export port fall to a 30-year low.
  • The trade, industry and competition minister “must see business as a critical partner, not as an adversary,” BUSA said.
  • The minister of public enterprises – who oversees the struggling national electricity and transport utilities – needs to minimize political interference in the companies. BUSA cautioned against an ANC resolution to devolve oversight of the utilities to the energy and transport ministries, saying this would result in a conflict of interest.
  • BUSA praised the Ministry of Finance for its effective delivery but said government needs to guard against weakening the independence of the central bank and enacting what it has called unaffordable welfare policies. The ministry also needs to be more innovative, it said, a reference to its failure to tap sources of finance such as green bonds.
  • The police ministry needs to be bolstered to better tackle organized crime, the business organization said.

Ramaphosa was also urged to cut the size of the cabinet by merging ministries such as sports and tourism and to put in place “forward-looking, energetic, and effective ministers.”

A government assessment, which was released on Saturday, of pledges made by Ramaphosa in last year’s state-of-the-nation address showed that targets of adding significant amounts of new power generation were missed and promised tenders for gas-fired power and battery storage weren’t held.

Eskom, the state power utility, on Sunday advertised for a new chief executive officer after Andre de Ruyter, its current leader, said in December he was stepping down at the end of March.

With applications due in by Feb. 27 the company may be without a permanent CEO in April.


Top JSE indices