OPINION | After beating coronavirus, Ramaphosa must face an older foe

Cyril Ramaphosa was having such a good pandemic. Only a month ago, South Africa’s president was among a tiny group of world leaders winning plaudits, at home and abroad, for their handling of the coronavirus crisis. His decision to impose a comprehensive lockdown seemed to be paying off: The curve appeared to be flattening. Ramaphosa was widely praised for his calm, effective communication.

His health minister, Zweli Mkhize, received even more enthusiastic applause. Although South Africa leads the continent in cases and fatalities (more than 12,000 and 220, respectively), the consensus was that the numbers could have been much worse.

Now, as the government begins gingerly to reopen Africa’s largest economy, the bouquets have morphed into brickbats. Most of them are being directed at the president.

Ramaphosa’s televised address to the nation this week came off as vague and indecisive, offering no clear roadmap for the reopening. His government would “continue to proceed cautiously, informed by the best available evidence,” he said. If that seems unexceptionable, it did little to reassure business leaders, who fear the economy—hardly in good health before the pandemic—is being grievously wounded by the lockdown, and want a speedy return to normal commerce.

Ordinary South Africans are hurting, too. The unemployment rate, nearly 30{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} at the start of the year, is likely to soar. Business for South Africa, a group of business organizations, has warned four million jobs are at risk and that the economy could shrink 16{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} if the reopening is delayed. Even by the central bank’s more conservative reckoning, the economy will contract by 6.1{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} this year.

Just as he set the bar for African leaders in his response to the crisis, Ramaphosa’s handling of the reopening will be closely watched. Mkhize’s performance will also remain critical—the health minister must guard against new outbreaks. And the president will be joined in the spotlight by Finance Minister Tito Mboweni.

It falls on Mboweni, a former central bank governor, to figure out how to pay for a $26 billion plan to mitigate the pandemic’s effects—and then find more money to goose an economy in recession for the past two years, and the longest downward cycle in living memory. The minister has indicated he will seek help from the International Monetary Fund and the World Bank, as well as the New Development Bank.

But first he must overcome powerful opposition within the ruling African National Congress to assistance from multilateral lenders. The party and its allies have long been set implacably against the kinds of economic reforms that bailouts typically bring with them. They are already suspicious of Mboweni, who has pledged to cut government expenditure and encourage private sector competition in the infrastructure sector.

Selling them on austerity programs, and belt-tightening in general, will be especially hard if unemployment worsens dramatically. Ramaphosa, who has a reputation for delaying decisions until every faction has signed off on them, will struggle to achieve a consensus for much-needed reforms

Outside the ANC, opposition groups like the Economic Freedom Fighters, who favor nationalization of land, banks and mines, can be counted upon to fight any policies that empower the private sector.

But something’s got to give. The budget Mboweni announced in February, despite cuts in planned spending, projected a widening deficit. Those projections may already be moot, thanks to a steep, pandemic-induced fall in government revenues.

Mboweni will need all the political capital his boss can muster to persuade South Africans that government rolls need trimming, and that large state-owned enterprises—the moribund national airline, for example—must be allowed to die. For Ramaphosa, the adulation of the past few weeks will soon be a distant memory.

Bobby Ghosh is a Bloomberg columnist. Views expressed are his own. 

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