South Africa

One thing South Africa’s new government must get right

South Africa’s Government of National Unity (GNU) must ensure the right people are placed in the right positions throughout the state, thereby professionalising the civil service. 

This is feedback from Old Mutual investment strategist Izak Odendaal, who said the importance of getting this right cannot be overstated as its effects are wide-ranging. 

Odendaal said the election outcome caused great unease amongst investors, with the ANC doing much worse than expected. However, three important things did not happen.

  • The ANC did not dispute the results. It accepted them without question and started coalition talks. 
  • President Ramaphosa did not lose his position, as many expected would happen given such a dire electoral performance. Therefore, there will be broad continuity in leadership and policy. 
  • The resulting coalition government did not shift in a populist or leftist direction. Instead, a centrist Government of National Unity has emerged.  

Odendaal did caution against thinking this would last, with coalition politics being new to South Africa at the national level and several teething problems appearing.

Despite this, the parties in the GNU agreed on a cabinet, and broad agreements were reached. 

While the GNU includes parties that have long opposed one another and disagree deeply over some issues, it is based on a set of core principles that all parties recognise. 

Importantly, these include respect for the Constitution, the need for faster economic growth and social upliftment, evidence-based policymaking, and the establishment of an impartial and professional civil service. 

“The importance of the last point cannot be overstated. Getting the right people in the right positions is crucial,” Odendaal said. 

Getting this right will greatly impact the South African economy and society, with improved service delivery and increased government efficiency among the benefits. 

An example of the impact of a professional civil service can be seen in the government’s Operation Vulindlela, which comprises several civil servants and is housed in the National Treasury. 

This small group of highly qualified civil servants has significantly boosted the local economy by removing obstacles to private participation in key sectors of the economy, including electricity, water, and logistics. 

Old Mutual Wealth’s Izak Odendaal

Among these efforts, South African businesses have also increased their involvement with the government to help capacitate the private sector. 

Business groups, including Business Unity South Africa (BUSA), have committed funds, expertise, and people to solve some of the major constraints on the South African economy. 

Standard Bank Group CEO Sim Tshabalala has even pleaded with the government to capacitate the state and thus make it easier to do business in South Africa. 

Tshabala said the country has incredible competitive advantages but has failed to capitalise on them. He called for the state to improve its efficiency and capitalise on them. 

“Please improve the quality of our institutions. In the case of South Africa, we use the lovely phrase ‘Please capacitate the public sector’.”

“Some parts of the public sector are excellent, such as the National Treasury and the Reserve Bank. Replicate what is happening in those across the board,” Tshabalala said. 

“Please capacitate the state,” he repeated. “Please professionalise it. Please continue to make doing business easier.”

However, governance expert Dr Harlan Cloete explained that it is not as simple as recapacitating the state and upskilling government employees. 

The lack of capability and capacity is the root cause of many governance failures in South Africa, but there is a deeper issue at play. 

The government has spent R40 billion in the past decade to upskill its employees and enhance the efficiency of government services. 

However, this has failed to improve access to and quality of public services, resulting in people losing trust in the government and turning to the private sector. 

Cloete said the problem is that even if government institutions and state-owned companies are given more resources and employees are upskilled, it is still a toxic environment to work in. 

A toxic environment, filled with corruption, makes employees less productive and government services less efficient. 

He explained that, in some cases, the wrong people are employed, and no matter how much the government spends to upskill them, they cannot deliver. 


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