20180425-法国巴黎银行-South_Africa__Much_done,_much_to_do_10页_1mb

South Africa: Much Done, Much to Do - Summary

Core Content

This document provides an analysis of the political and economic developments in South Africa following the transition of power to President Cyril Ramaphosa's administration. It outlines the progress made in addressing corruption, reforming state-owned enterprises (SOEs), and implementing labor and investment-related policies, while also highlighting potential challenges and risks that could affect the reform agenda and investment climate.

Main Views

• Anti-Corruption Efforts:

  • President Ramaphosa has taken decisive action against corruption, notably by removing Jacob Zuma from power and initiating legal proceedings against him.
  • The Gupta brothers, close associates of Zuma, are under investigation, with their assets being seized and their estate raided in connection with the Estina scandal.
  • The criminal justice system is actively pursuing those involved in state capture, though concerns remain that the pace of reform may slow after initial successes.

• Structural Reforms in SOEs:

  • Reforms in SOEs such as Denel and Eskom are expected to deepen under Public Enterprises Minister Pravin Gordhan.
  • The government is working on amendments to the Labour Relations Act to reduce the frequency and impact of strikes, which are seen as a barrier to foreign investment.
  • A new minimum wage policy is also being considered, though the timeline for implementation has been delayed.

• Investment Promotion:

  • A "dream team" of economic advisors has been assembled to attract foreign direct investment (FDI).
  • The National Development Plan aims to increase FDI to 30% of GDP, which has declined from 24% in 2008 to 19% in 2017.
  • The government is preparing for an international investment conference in 2018 to showcase its reform agenda and attract investors.

• Potential Political Challenges:

  • The ANC has faced pressure to address land reform, including calls for expropriation without compensation, which could lead to a radical shift in policy.
  • There are concerns about the potential for an alliance between the ANC and the Economic Freedom Fighters (EFF), which could destabilize the political landscape and affect investor confidence.
  • The death of Winnie Madikizela-Mandela has reignited discussions about the ANC's past decisions and may fuel more radical demands for change.

Key Information

• Cabinet Reshuffle:

  • President Ramaphosa has made positive changes to the cabinet, but has also retained some individuals due to political considerations.
  • These individuals are being moved to positions where they can have less influence.

• Legal and Political Developments:

  • Arthur Fraser, a former Zuma ally, has been removed from the State Security Agency and is now heading the Department of Correctional Services.
  • He faces potential charges related to alleged corruption and interference with investigations.

• Mining Charter Reforms:

  • The new mining charter, led by Minister Gwede Mantashe, is seen as a positive development, despite the government's opposition to a court ruling that struck down the 'once empowered always empowered' principle.
  • The goal is to promote transformation and black economic empowerment, though there are concerns about the potential for backtracking.

• Land Reform:

  • The ANC has officially endorsed land reform with the possibility of expropriation without compensation.
  • The process is likely to be cautious, with conditions to avoid affecting food security and investor confidence.

• Market Implications:

  • The government's reform efforts are viewed as positive for asset prices, but there are risks of political instability and uncertainty.
  • The document cautions against over-optimism, noting that progress may slow and that structural challenges remain.

Conclusion

While the new administration under President Ramaphosa has made significant strides in combating corruption and initiating structural reforms, the path forward remains complex. The government's actions have been welcomed by some sectors, but the potential for political pushback, especially from within the ANC and the EFF, could pose challenges to economic stability and investor confidence. The success of the reform agenda will depend on maintaining momentum, managing expectations, and addressing deep-rooted social and economic divisions.