Thought the announcement of attracting over five years $100bn of investment into the South African economy during 2018 was eye-catching, the marquee number will be difficult to achieve. As is so often the case, examination of the detail throws up problems that will make the task harder for Ramaphosa than was originally hoped. Critics cite a serious problem in regard to the investments from state-owned-enterprises (SOEs). Such is the extent of alleged corruption within state owned firms – which the president asserts he is attempting to curb – that such large commitments to funding an economic transformation hardly serves as the inducement private investors require before becoming involved. Avoiding state run companies would have helped the president assure potential foreign investors that the allegations that haunted the presidency of Jacob Zuma are firmly in the past.
Despite issues with where some of the funds are coming from, and the slow speed of action on the ground emanating from the money so far, some progress has been made. So far businesses have applauded efforts to deregulate commerce – changing visa rules to make it easier to hire the right skills and expertise being one of them; lowering entry barriers for new businesses is another. A problem for Ramaphosa is implementing the scale of change needed to the make the $100bn work as intended (assuming that target is reached) entails overcoming interests which have dogged the economy for a long time. Much of the South African economy is heavily consolidated; forcing through change to incite better competition and create serious challengers to dominant players will be far from easy. The President is highly regarded for his skills as a negotiator, honed during the negotiations to end Apartheid in the 1990s. Yet a greater sense of decisiveness would create barriers to be overcome but would also embolden supporters to get political business completed.