President Cyril Ramaphosa on Monday evening announced his much-awaited changes to the cabinet and said the new “transitory” Minister of Electricity would be bestowed with certain powers that will enable them to work towards ending load shedding.
According to Momentum Investments economist Sanisha Packrisamy, however, markets will be questioning the decision to leave some under-performing ministries untouched.
The rand weakened early on Tuesday following the reshuffle, and at 09:05, the rand traded at 18.2800 against the dollar, 0.11% weaker than its previous close.
According to Reuters, ETM Analytics had forecast markets would not respond positively to the reshuffle, saying in a note "it offers no fresh strategy to deal with any of the crises South Africa is currently facing".
“While the formation of Cabinet plays an instrumental role in shaping government’s commitment to furthering economic and political reforms to drive higher levels of growth and socio-economic development, there are still a number of institutional and structural hindrances that will prevent a faster acceleration in SA’s growth path, in our view. A constrained fiscus, endemic corruption and a lack of skills in key areas of government to effectively execute government’s reform agenda will continue to cap potential growth. Moreover, internal resistance in the ruling party is preventing more effective delivery of public services, higher economic growth and better job outcomes,” Packrisamy said.
"The latest Cabinet reconfiguration is likely to have disappointed markets, given its limited scope for change, particularly with a number of under-performing ministers left unchanged in their portfolios. Some of these ministers have not displayed a clear willingness to support the president’s reform agenda in the past and have been seen as significant stumbling blocks to achieving a higher level of inclusive growth in SA,“ she further told Business Report.
Packrisamy pointed out the unchanged ministries to Business Report and shared her thoughts on their performance in office below:
- Pravin Gordhan (Public Enterprises): Eskom has not yet been stabilised, governance issues remain at large at key state-owned entities, and the restructuring of key state companies has not yet been finalised.
- Gwede Mantashe (Minerals and Energy): Failure to support a more sustainable energy mix, including the just energy transition.
- Joseph Phaahla (Health): Slow progress on the National Health Insurance plan and a failure to achieve the country’s vaccination targets.
- Bheki Cele (Police): Unsuccessful in reducing reported contact crimes (although some progress was made in Crime Intelligence with the appointment of a permanent head).
- Aaron Motsoaledi (Home Affairs): Issues with maladministration and limited resources, and no definitive plans to completely overhaul the immigration system.
- Naledi Pandor (Foreign Affairs): In defence of the country’s participation in joint navy drills with Russia and China against the backdrop of the Ukrainian war
Ramaphosa named Dr Kgosientsho Ramokgopa as the Minister of Electricity nearly a month after announcing the establishment of this ministry during the State of the Nation Address early in February.
Ramaphosa said Ramokgopa’s primary task would be to significantly reduce the severity and frequency of load shedding as a matter of urgency as the government focuses on the implementation of the Energy Action Plan.
“To effectively oversee the electricity crisis response, the appointed Minister will have political responsibility, authority and control over all critical aspects of the Energy Action Plan,” Ramaphosa said.
BUSINESS REPORT