What’s driving South Africa’s 2022 political timetable?
South Africa and its ruling African National Congress (ANC) are two years from general elections – and less than a year before the party’s elective conference that will determine who leads the government from 2024. In between here and there, President Cyril Ramaphosa’s administration faces five salient structural and party-political challenges that are reflected in the below policy priorities and timelines.
1. Fiscal consolidation
Finance minister Enoch Godongwana will put forward the 2022 budget in parliament on 23 February, and one of the highlights will be updating the country on the government’s plans to restrain spending. More bailouts for Eskom, South African Airways and other state firms are ruled out in the Medium-Term Budget Policy Statement that was released last November. But the Ramaphosa administration is nursing proposals for more spending on social security such as a basic income programme, which is endorsed in a report that was published by the Department for Social Education in December. Godongwana is expected to clarify the government decision on these proposals considering Ramaphosa’s own Economic Advisory Council opposed basic income support this week.
Meanwhile, the government’s 2018 decision to freeze public service wages is at the heart of its plans to rationalise expenditure given the country spends about a third of its budget on paying civil servants. The case has been before the Constitutional Court since last year after the Labour Appeal Court ruled in 2020 that the wage freeze was lawful. Still, the government compromised in August to avert a labour strike by offering a 1.5% pay rise plus a monthly gratuity for one year. If the Constitutional Court rules in favour of the unions this year, the government would have to retroactively apply higher wage levels using measures such as increased borrowing, more taxation and downsizing the civil service.
2. Empowerment
Last November, parliament passed amendments to the Employment Equity Act 1998 that would enable the labour minister to set numerical workforce targets for employers promoting the equitable representation of black people, women and people with disabilities (collectively referred to as designated groups). The amendments would also require the government to issue contracts only to firms that have been certified compliant with this law (See: Employment equity: South Africa takes one more step toward black empowerment). The legislative process should be concluded before September this year when current workforce equity plans set by employers themselves would elapse and the labour minister would set new five-year targets in terms of the new law.
3. Power supply
Ramaphosa’s power sector agenda is geared to reducing the country’s reliance on Eskom by creating additional capacity from private sources. The Bid Window 6 for the Renewable Energy IPP Procurement Programme is scheduled to begin this month – although the Department of Mineral Resources and Energy (DMRE) has not yet announced an update on the schedule. In October, the DMRE selected 25 renewable energy firms to supply a combined 2500MW in the fifth bid window. It followed amendments to the Electricity Regulation Act in August that now allows private firms to generate their own electricity up to 100MW without a license. The previous threshold was 1MW. In the interim, the government will look to get the Risk Mitigation IPP Procurement Programme back on trac. The programme was delayed last year due to lawsuits around environmental impact and the integrity of the bidding process. The seven selected bidders were told to bring the projects to financial close latest by the end of this month and begin supplying power in August, but banks have withheld capital to see the outcome of a high court case where a losing bidder DNG Energy is accusing the DMRE of corruption.
4. Transport Infrastructure
The state-owned Transnet aims to finalise a bidding process for the development of new terminals at the Durban and Ngqura ports in June this year. A Transnet National Ports Authority was carved out of the parastatal in June last year to initiate reforms conceived to draw private sector investment into ports and freight rail. With Transnet struggling to raise efficiency as the freight rail monopoly, Finance Minister Godongwana said last November that private freight trains will be allowed to run on the network by December this year in order to increase competition.
5. State Capture and factional disputes
Acting Chief Justice Raymond Zondo has given Ramaphosa part of the findings from his probe into state capture under ex-president Jacob Zuma (2009 to 2018). Ramaphosa will receive the rest of the report next month and transmit it to parliament in June at the latest. There is moral pressure to act on Zondo recommendations like forming a new anti-corruption agency shielded from the ANC’s control, but he must weigh the acceptability of any actions within the party. Ramaphosa also needs to conserve political stock ahead of the ANC’s national conference in December, where he will seek re-election as ANC president. The conference is critical because whoever emerges as ANC president would normally go on to be elected as the country’s president by parliament[1]. That said, although the party presently controls nearly 60% of National Assembly seats, its majority looks shaky seeing that the ruling party gained less than 50% of total votes in November 2021 municipal elections – the first time ever. ANC factional disputes were a contributor in November and they persist. In such a context, action required to decisively tackle public sector corruption may be frustrated (See: South Africa minister takes aim at judiciary after state capture probe).
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[1] Given ANC dominance in the legislature.
*The above analysis was originally produced in January 2022
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