ICYMI: Economic stability depends on ‘strong, united’ cabinet - economist
A local economist warned on Tuesday that economic uncertainty will continue until President Cyril Ramaphosa announces “a strong and united” cabinet.
Chief Economist at Econometrix Azar Jammine’s remarks come amid ongoing talks between the ANC and nine other political parties to finalise a government of national unity.
The rand managed to claw back some of its losses on Tuesday morning after the local currency fell to levels last seen ahead of the release of the general election results.
“There has been a big constraint on economic growth in the past by the fact that different cabinet ministries have been working against each other,” said Jammine.
“So one will have to examine the cabinet to see whether its new structure will be more amenable to greater cohesion or not.”
“There are underlying fears that part of the ructions that are taking place in the negotiations is linked to the fact that some within the GNU, including the ANC, might be feeling uneasy with any alliance with the DA. That raises the question of whether or not a new government will be following investor-friendly or market-friendly policies.”
Jammine suspects the delay in finalising the new cabinet could be due to some parties’ reluctance to work with the DA.
“The kind of policies that are promulgated by the DA, which include doing away with black economic empowerment, minimum wage legislation, not embarking upon the NHI scheme in the manner which the ANC is doing, among other things. All these factors have been considered to be negative for the economy going forward.
“What economists and businessmen would like to see are market-friendly policies that suggest that the government is subjugating a lot of its power in controlling the economy above letting market forces dictate what needs to be done, rather than introducing regulations.”
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