The Centre for Development and Enterprise (CDE) has urged President Ramaphosa to use Thursday’s State of the Nation Address (SONA) to show how the government of national unity (GNU) plans to enact far-reaching and urgent reforms essential for faster job-creating growth.

“The GNU was formed without an agreement on a programme of action and, nearly nine months later, the promised ‘policy agenda’ laying out priorities for action by the GNU has yet to be agreed,” said Ann Bernstein, executive director of CDE.

“We have seen some improvements in governance, and in the performance of critical agencies, not least Eskom, Transnet and Home Affairs. While it is important to acknowledge these ‘green shoots’, the most striking thing about the GNU is just how little policy reform is being contemplated,” said Bernstein.

“The formation of the GNU gave South Africa hope of consolidating its constitutional democracy, the rule of law and building a more prosperous, inclusive future. But its mere existence isn’t enough to deliver results. To assume that the perpetuation of the policies of the previous government will achieve the growth, development and inclusion we need is a grave mistake,” she added.

According to CDE, tweaking existing policies is not enough. South Africa requires a fundamental departure from the policies and approaches that have led to crises on almost every front.

For the past year CDE has been working on Agenda 2024, a series of reports on five priority areas that the new government needs to focus on for immediate action. In his address on Thursday, CDE urges the President to announce significant catalytic reforms, bold signals of a new approach in each of these key areas:

• Fixing the state can only be achieved with a leaner, more efficient government. The President missed the opportunity to trim down his bloated Cabinet, but there is still a need to streamline the Presidency and ensure much better Cabinet processes to strengthen evidence-based decision making.

There should be a determined effort to appoint the best possible people to the most important jobs in the public sector, such as Directors-General, and top executives at state-owned companies such as Transnet. In last year’s July Opening of Parliament address, President Ramaphosa promised to “put in place systems to ensure that capable and qualified people are appointed to senior positions in municipalities” – we look forward to hearing what progress has been made to achieve this.

• A weak state like ours needs to free up markets for development. In last year’s July address, President Ramaphosa said: “We will pursue a smart industrial policy that focuses on the competitiveness of our economy, and that incentivises businesses to expand our exports and create jobs.” We support this and look forward to hearing what progress has been made.

What specific steps are being taken to subject state-owned enterprises to competition, and to change the focus of industrial policy from protectionism to helping South African firms become more competitive in global markets? It is time to ditch the master-plan approach that tends to encourage protectionism, and instead, foster an export-led growth model that will grow the economy and expand employment.

• To build a new approach to mass inclusion, it is vital to remove the regulatory shackles holding back the emergence and growth of small firms. We should cease the process of extending wage agreements to firms that were not party to those agreements.

We should stop asking officials, most of whom have little knowledge of business, to identify and assist small firms. Instead we should use scarce government funds much more effectively to fuel the growth of small firms. Private institutions should compete for large chunks of state money so they can support small firms with potential. They should report publicly about how they use the funds and what they are able to achieve with them.

• The most important thing the President must do to help tackle the fiscal crisis is also the hardest: resist the temptation to commit government to more spending programmes. The President needs to recognise just how stretched the public finances are, and the damage any further commitments will do in the absence of further growth. He needs to focus much, much more on improving the quality of public spending. Unfortunately, there is a great deal of room for this.

• Sustained faster growth is impossible without strengthening the rule of law. This requires reforming the composition and functioning of the Judicial Service Commission (JSC) so that excellent lawyers are encouraged to apply for judicial office.

South Africa urgently requires a highly effective National Prosecuting Authority (NPA) that is able to roll back the culture of impunity that has become entrenched among the country’s elites. CDE has recommended that the President appoint a retired judge to conduct an enquiry into the leadership, performance, structure and independence of the NPA, that he respond to the August 2023 request by the head of the NPA to suspend a regional Director of Prosecutions, and that he instructs the Department of Justice to immediately give the NPA full access to the Zondo Commission archive.

In his July 2024 parliamentary opening address President Ramaphosa acknowledged that “without unity, cooperation and partnership, our efforts to end poverty, unemployment and inequality will not succeed”.

Events over the last few weeks have shown that the GNU is a long way off from achieving the unity and partnership it needs to make a real impact. “The point of the GNU,” said Bernstein, “was to move away from policies and legislation of the last parliament, not to implement them as if nothing had changed. “The country needs something new that will help us move beyond mere talk about growth.

According to Bernstein: “In his SONA on Thursday, President Ramaphosa needs to acknowledge that the country is more important than party and that, for South Africa to work, it needs new policies and approaches, not the same old policies”.

“The GNU has to represent more than the failed policies of the past. South Africa is in deep trouble in a volatile and unfriendly global environment. The President cannot continue to act as if his party has the majority of the vote and must draw on the ideas and wisdom of his main partners,” said Bernstein.

“The GNU honeymoon will not last much longer. The promise of the GNU will remain elusive if we continue with policies that have delivered nothing but deepening crises on almost every front,” said Bernstein.

“The GNU needs its own programme of action, policies and priorities that build on a common and honest diagnosis of why South Africa is in deep trouble and therefore what must change. Without this, it is hard to see how the GNU survives. Or even why it should. That should worry all of us,” she added.

For media enquiries and interview requests, please contact Refiloe Benjamin: media@cde.org.za | 011 482 5140

ABOUT THE CENTRE FOR DEVELOPMENT AND ENTERPRISE
CDE is an independent policy research and advocacy organisation. It is South Africa’s leading development think tank, focusing on critical development issues and their relationship to economic growth and democratic consolidation. Through examining South African realities and international experience, coupled with high-level forums, workshops and roundtables, CDE formulates practical policy proposals outlining ways in which South Africa can tackle major social and economic challenges.