ANALYSIS: Ramaphosa weathers first 100 days with economy on the skids

Confronted by an economy that is battling to attract sound growth and stem the rising tide of unemployment, President Cyril Ramaphosa's first 100 days in office - marked this week - saw him battle multiple headwinds.

Ramaphosa's ascent to power, after replacing former president Jacob Zuma in February 2018, was met with a wave of optimism and hope for economic renewal.

So much so that there was a word for it: Ramaphoria. But it was May 2019, following the ANC election victory, that cemented his authority in government.

Nonetheless, economic indicators show that Ramaphosa's days since taking oath of office on May 25 have fallen short on steering the economy out of its slump. Instead, uncertainty over the country's economic direction remains, with the GDP in the first months of the year shrinking 3.2%, and the country facing its highest jobless rate since the start of 2008. Growth forecasts for 2019 have been revised down to a meagre 0.7%.

Such weak prospects have taken the shine off Ramaphosa's plans for economic renewal, with one economist saying his time in office thus far has failed to live up to expectations.

"The president has failed to affirm his authority when it comes to critical matters affecting the economy," said Dawie Roodt, economist at Efficient Group.

Roodt said when it came to critical matters affecting the economy, Ramaphosa's voice had been drowned by political noise from the ANC ranks, particularly around the matters of the independence of the SA Reserve Bank.

"I believe Ramaphosa is the right man for the job, but sometimes I feel that he does not enjoy the necessary support from the party," said Roodt.

A low point for the economy came in July, when Statistics South Africa revealed a 1.4 percentage point jump in unemployment in the second quarter of the year, to a record 29%. The numbers were a clear indication that the results of a Jobs Summit called by Ramaphosa in October to address the crisis had not filtered to the ground.

The much-vaunted summit saw various corporates making pledges to key sectors of the economy, in a bid to create employment.

Need to be bold

"Sometimes I feel that Ramaphosa has not done enough to stamp his authority in government. He needs to be bold enough to make the tough decisions," Roodt added.

Ramaphosa's 100 days in office coincided with the start of the gathering of continental leaders for the World Economic Forum on Africa in Cape Town this week, with a focus on mapping growth opportunities in the age of digital economy and tech-innovation.

Slightly optimistic data released on Tuesday showed that the SA economy avoided a recession in the three months to June, with a surprising 3.1% growth in the second quarter.

An analyst at Nedbank CIB, Jones Gondo, however, said Ramaphosa's first 100 days in office had been by marked by impasse in dealing with pressing issues facing the economy.

"We have yet to see a kind of response from government that shows urgency in dealing with policy uncertainty. These are the things which are meant to drive certainty," said Gondo.

The burden placed by the country's cash-bleeding state-owned entities - like Eskom, Denel, SAA and the SABC - on the fiscus has been one of the major challenges to Ramaphosa's government. Numerous strategies aimed at shoring up the companies have not yielded positive results, leaving them dependent on government guaranties and bailouts to stay afloat. 

"I don't think what we've seen gives confidence, there has been a lot of false starts. What is needed right now is the implementation of the things that were mentioned in his budget speech, otherwise the road ahead is going to be very hard."

Gondo also mentioned that, although some of the troubles facing the economy were homegrown, some of them had a lot to do with external factors, including a bearish global growth outlook characterised by the Sino-US trade war, ongoing Brexit woes and mounting US recession fears.

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