The delay in finalising the proposed government of national unity (GNU) is impacting negatively on certain sectors of business and the economy.
South Africans went to the polls on May 29 and President Cyril Ramaphosa was inaugurated on June 19. However, there has been a delay in announcing the make up of a proposed GNU.
African Farmers Association of South Africa’s CEO Thandeka Mbassa said the delay in constituting government and appointing ministers delayed their negotiation processes for opportunities in the Middle East and China.
These opportunities were discussed in the sixth administration and are incorporated in the agriculture and agro-processing grand masterplan developed together with former minister Thoko Dikiza, now appointed as speaker of the National Assembly.
Mbassa said the plan was already solid and prioritised the success of black farmers, but its implementation has been further delayed by the late announcement of the cabinet.
“The previous minister worked well with us, and we could already see how this plan will hit the ground. Our concern now is that the new minister might want to review what was already closed and ready for action.
“We are already delayed and anxious that we will miss out on international relations but if the incoming minister will not tamper with our plan and fully help us with its implementation, then we’ll definitely be okay.”
She said the association understood the complexity of the matter and tried to remain patient under hope that the GNU will bring visible and positive change in the business of agriculture for black people and finally witness the democracy they have long awaited.
Economic analyst Mandla Maleka said his observations showed that the slow-motion move to appoint the cabinet further delays possible lowering of domestic borrowing costs or interest rates as the currency depreciates. While this shows heavy political impact on the markets, he said this would burden the local consumer.
He said it should be noted that there were no longer borderlines separating domestic and global business as they shared heavy investments. “The delay in closing the political impasse might as well mean a delay in potential interest in the purchase of shares or counters of our own business located in global space. But more than that, South Africa is literally involved in trade with global businesses and this uncertainty is not helping in enhancing trade between businesses,” said Maleka.
According to the analyst, investors would highlight the risks associated with the delayed appointment of ministers and dump South African currency for its leader’s incompatibility in political decision making. “Recovery time is uncertain. However, if the new dispensation materially alters institutions, then recovery may take long. Talks on possibility of changing directors-general, who are not politicians, could potentially lengthen recovery period,” he adds.
Kganki Matabane, Black Business Council (BBC) CEO, said any sensed uncertainty in the political system was expected to destabilise the business sector.
“Business prefers to operate in an environment where there is stability, predictability continuity and certainty. The delay in announcing the executive is taking too long and is starting to cause unease in business,” said Matabane.
He said the BBC would oppose anyone appointed to the executive who would reverse the socio-economic transformation and broad-based black economic empowerment. He said while it took longer than expected to announce the cabinet, the GNU should be focused on accelerating the implementation of economic transformation of employment equity.
Allan Seccombe, Minerals Council spokesperson, said director-general Jacob Mbele ensured smooth operations under the Department of Mineral Resources and Energy.
He said the department had not been impacted by the delay and can hold up for longer if the government needed more time. Gwede Mantashe oversaw the department and Seccombe insists that domestic and international relations ran smoothly under his leadership and would appreciate his reappointment.
