Markets, analysts react to Ndabeni-Abrahams & Godongwana's new appointments

On Thursday night, President Cyril Ramaphosa announced changes to his Cabinet reshuffling some existing members of his executive appointing new members and new deputy ministers.

New Finance Minister Enoch Godongwana at the swearing in ceremony at the Union Buildings in Pretoria on 6 August 2021. Picture: GCIS.

JOHANNESBURG/CAPE TOWN - The downside of a Cabinet shake-up in South Africa is that the president does not have to explain the rationale behind the decisions he makes.

The nation now has three newly appointed ministers officially sworn in and installed.

On Thursday night, President Cyril Ramaphosa announced changes to his Cabinet reshuffling some existing members of his executive, appointing new members and new deputy ministers.

The Democratic Alliance resorted to the High Court in 2017 to force former President Jacob Zuma to explain why he fired then-Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas but this failed to set a precedent.

And so, less than a day after the president made his changes, some economists are wondering what he was thinking, particularly when he chose to appoint Stella Ndabeni-Abrahms to the crucial small business development portfolio and Lindiwe Sisulu to tourism, an industry that contributes a sizeable chunk to the nation’s GDP.

Citibank economist Gina Schoeman said these departments stood out and the problem ran deeper: “We are speaking about the economic cluster now, but everything is impacting National Treasury right now because we are an economy that is running out of cash. I don’t know what Ramaphosa’s strategy was. I don’t know if there was a strategy around the economic cluster as much as there was a strategy on who to take out and who to minimise to get his Cabinet more on his side.”

Ramaphosa has often referenced small business and the tourism sector as among keys, which would unlock the country’s economic performance.

READ:

- Who's new: The ministers taking over portfolios after the Cabinet reshuffle

- Who's out: Casualties of Ramaphosa's Cabinet reshuffle

- Who's in: Ramaphosa overhauls his Cabinet - the new ministers & positions

HAILED FOR REMOVING NDABENI-ABRAHAMS

Some analysts have welcomed the removal of Ndabeni-Abrahams as communications and technology minister, saying the change in leadership in the key portfolio could just be the impetus it needed.

The president tapped Khumbudzo Ntshaveni for the job, making her our 14th Communications Minister since democracy.

Ndabeni-Abrahams is one of many ministers who have failed to perform in the communications portfolio, following the likes of Nomvula Mokonyane and Faith Muthambi who both led the department for brief periods before being axed.

Key among Ndabeni-Abrahams’s failures is the delay in the long-awaited provision of broadband spectrum, which is now being challenged in court.

Digital migration, which was supposed to happen by 2015, also didn’t conclude on her watch with 2022 now the targeted date.

Leon Louw from the Free-Market Foundation said her removal was the right move.

“I think it is a new opportunity with a new minister that is probably going to be fairly open minded and seek real information and so, I think on balance, we should be pleased with this change.”

GRAPHIC: The ins and outs of Ramaphosa's Cabinet reshuffle

Markets have taken the news well and Alexander Forbes chief economist Isaah Mhlanga said Godongwana was a good choice: “His views are quite conservative to his colleagues' in the ruling party. He understands the policy space, he understands the markets. But he also has been speaking with international investors of all kinds and can engage on matters of the economy and policy of any environment.”

Schoeman agrees that Godongwana is a good choice pointed especially to his leadership as ANC’s economic transformation head.

“He has put in a lot of effort to try and water down the policies that Ramaphosa inherited from Zuma.”

But will he be able to bring the necessary political weight and policy coherence to bear? And will his past be an obstacle?

“It does include the fact that he is a risk, down the line could, could he be corrupt again? The second side is if someone wants to use this against him.”

Schoeman is referring to the dark cloud hanging over Godongwana that forced his resignation as deputy minister in 2012.

That stemmed from his involvement with a company that allegedly defrauded clothing factory workers of R100 million in pension fund money.

One of the decisions that raised eyebrows and drew criticism from some quarters is the decision to essentially disband the state security ministry and reconstitute the intelligence apparatus under the Presidency.

It's being seen as Ramaphosa's latest effort at centralisation of power.

But Professor Jane Duncan said it could be a dangerous move: “The fact that we are not going to have a minister for intelligence is a cause for concern and we should learn lessons from other countries who have had a centralised approached to intelligence. One being Botswana, and Zimbabwe, which wa used by President Robert Mugabe to maintain his grip on power for several decades.”

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