The Government Of National Unity

Good For Business And Development.

An article by Ian Kilbride, published on 26 June 2024 in IOL.

The doomsday coalition scenario has not materialised, but is the nascent Government of National Unity (GNU) doomed?

Corporate South Africa’s relief at President Ramaphosa’s announcement to form a Government of National Unity was palpable. Faced with the threat of anti-constitutional, nationalising and fissiparous forces, business welcomed the principle of a national unity government, but particularly one promising to be less arrogant, more balanced, accessible and accountable. The formative composition of the GNU, eschewed by the EFF and MK, in favour of a potentially more business friendly ANC/DA/IFP based government has already boosted confidence.

Business is also encouraged by the GNU parties’ Statement of Intent’s commitment to include corporate South Africa in a ‘National Dialogue’ process leading to a social compact to achieve the objectives of the 2030 National Development Plan. Better late than never.

Three of the eight fundamental principles guiding the Statement of Intent boost business confidence. The first is to uphold evidence-based policy and decision-making. Understandably, principles of social justice, equity and transformation have been the overarching drivers of much public policy in post-apartheid South Africa. Adherence to and support of these principles is consistent with good business. However, the development of principled policy without the application of thorough impact assessments and evidence can undermine well-intentioned policy. Worse still has been the development of policy and decision-making based on ideological and party-political grounds. Ditching of capricious policy making in favour of evidence-based policy and decision-making instils confidence.

The second important fundamental principle for business enshrined in the Statement of Intent is that of a professional, merit-based, non-partisan, developmental public service that puts people first. While this ought to be axiomatic, state capture, cadre deployment and business’s everyday experience of dealing with unqualified, incompetent, political appointees has reduced the ease of doing business and in extreme cases destroyed it. Though still years away, establishing a civil service that provides a fair, predictable and level playing field for business is welcomed.

The third principle is the most fundamental – a commitment to the integrity, good governance and accountability of leadership. This is the basis of any social contract or compact between government and business and its absence has been the basis of distrust, as well as the erosion of business and investor confidence.

But the Statement of Intent goes beyond the commitment to core principles, as it also articulates and ranks a programme of priorities that is at once developmental and business friendly. While genuflecting to macro-economic management supportive of the sustainability of national development goals, the Statement of Intent gives priority to a programme of rapid, inclusive and sustainable economic growth. Music to the ears of business is a commitment to fiscal sustainability, structural reforms, infrastructure development, fixed capital investment and industrialisation.

But how will this be translated into the GNU?

The first requirement is for Ministerial portfolios to be allocated meaningfully (not just equitably and inclusively) across the GNU. If the above priority programmes are to be achieved in the seventh democratic administration, the cabinet economic cluster cannot be ‘owned’ by a single party and must include ‘opposition’ Ministers and Deputy Ministers. While the ANC will reserve Treasury for itself, the negotiated appointment of a Deputy Minister of Finance from the Democratic Alliance for example, could constitute the keystone to the entire GNU.

The second key portfolio for business is that of Trade, Industry and Competition. The retirement of Ebrahim Patel from government provides the opportunity for the GNU to put its principles and programmes into practice through the appointment of a ‘business friendly’ Minister who will kick start the economy by the removal of legislative and regulatory red tape and the launching of pro-growth policies that encourage fixed capital investment, re-industrialisation and job creation.

The dismantling of the Department of Public Enterprises also provides the GNU with the opportunity to repurpose state owned enterprises with the support of the private sector.

Critical to the achievement of the GNU’s promised rapid, inclusive and sustainable economic growth is an efficient and effective Ministry of Minerals and Energy. In an ideal world these two sectors would be governed separately and to some degree are since the establishment of a Minister of Electricity. While politically sensitive for the tripartite alliance, the inclusion of an ‘opposition’ MP into this Ministry would instill further confidence among the business community.

Yet contestation over portfolios of potential divergence and disagreement between parties to the GNU could still threaten its cohesion, success and even sustainability. In addition to Treasury, Employment and Labour, Health, Defence and International Relations are all portfolios that are unlikely to be yielded by the ANC.

Business should be encouraged by progress to date, but the hard work is yet to begin. And the big unanswered question facing the GNU is whether the unlikely bedfellows to this peculiar political animal are willing to yield sufficient power to each other in the national interest, while at the same time preserving their own political survival.