The first State of the Nation Address from Cyril Ramaphosa inspired hope for many South Africans, who reminisced about the Mandela days in reaction to his speech.
The election of Cyril Ramaphosa signalled ‘a new dawn’ for a battered and bruised nation that has finally seen off Jacob Zuma after a decade of failed attempts at getting rid of him.
This article first appeared in Mining Review Africa Issue 3 2018.
Cyril Ramaphosa is viewed as a step above his predecessor, having a history with the trade unions, as founder of the National Union of Mineworkers (NUM), as well as being a key crafter of South Africa's constitution.
South Africans have high hopes that he will be a constitutionalist in his style of governance, and that his history and prominence with business circles indicate a person with appreciation of the investor and business point of view regarding the economy.
The Budget Speech carried key messages from Ramaphosa’s SONA, including mentions on free higher education, the National Health Insurance Scheme, dealing with debt and tightening the national purse.
The fingerprints of Cyril Ramaphosa were all over the Budget Speech as the previous Minister of Finance tried to carry the message of renewal and hope. The reception to the budget from the markets was positive as the rand strengthened 0.8% to R11.63.
There have been mixed reactions to the 2018 Budget Speech.
Whilst business and some economists remain optimistic and have applauded the budget, unions and civil society have been very critical, particularly over the VAT increase.
A key source of anger towards the VAT increase is the feeling that South Africans are being made to pay for the mistakes of the ANC-led government over the past decade.
The government has overspent in supporting failing SOEs, and keeping on a bloated cabinet of over 70 ministers and deputy Ministers - many of whom travel around with entourages of bodyguards and German car convoys.
There is also a feeling that the state has misgoverned tax revenues through corruption and financial mismanagement.
The higher cost of living that will impact not only the middle class, but many of the poor as well, may make the road much tougher for Cyril Ramaphosa in his attempt to gain the confidence of South Africans.
Should he fail in implementing critical changes in state, such as reigning in spending and dealing effectively with corruption, Cyril Ramaphosa will open up a window for opposition parties like the DA and EFF, and overall threaten the ANC’s 2019 chances of success at the polls.
It is still a long year ahead and much could happen to change the political and economic landscape.
Economic growth is expected to be better than last year, at 1% up from 0.7%, but this is still sluggish and not enough to absorb jobs and alleviate poverty.
South Africa is not that far off from the place it was under Zuma, and it seems an almost impossible task to undo the damage of the past decade.