GNU an opportunity to turbo-boost fundamental reform

5 July 2024

The Centre for Development and Enterprise (CDE) welcomes the formation of the government of national unity (GNU) as an unprecedented opportunity to turbo-boost reform, and get South Africa back on track.

Ann Bernstein, CDE executive director said: “By accepting the election results, South Africa’s leaders have surprised the world and reassured the country. We now have a chance to build a new political centre committed to dealing with poverty and truly expanding opportunities for all.”   

“This is a government which, on paper, believes in constitutionalism, the rule of law and an increased role for the market in growing the economy and creating jobs. This is a development with enormous potential for our country,” said Bernstein.

“What is required now is the leadership and political maturity to keep the GNU intact, and, crucially, to agree on a set of urgent priorities that deal with our country’s most pressing challenges. The space has opened up for an ‘all of society’ approach to getting things done,” she added.

As part of its AGENDA 2024 project, CDE has identified five priority areas requiring an immediate, laser-like focus:

Fixing the state

Driving growth and development by freeing up markets and competition

Building a new approach to mass inclusion

Tackling the fiscal crisis

Strengthening the rule of law

To fix the state, the GNU needs to start by reforming how the centre of government – especially the Cabinet – functions.

“It is unfortunate that the President went for an even bigger Cabinet than the enormous ones of previous administrations. Big Cabinets are difficult to manage, slow to make decisions, hard to hold accountable and less likely to commit to a clear set of reforms on which there is no back-tracking,” said Bernstein.

Nonetheless there is much that can still be done. The centre of government needs to be streamlined with more effective processes feeding into Cabinet to ensure better decision-making. Crucially, only the best people should be appointed to senior positions in the public service and in entities such as Eskom and Transnet.

“We believe that the incumbents in some 130 mission critical posts should all reapply for their jobs and, where individuals are not the best possible candidates for these jobs, they should be replaced," said Bernstein.

Dealing with the fiscal crisis must be top of the new government’s agenda, with careful attention paid to moderating public sector remuneration.

“The long standing crisis in the performance and financial viability of state owned companies needs to be addressed. Unaffordable, populist policy pronouncements made during the election, will need to be rethought,” said Bernstein.

A third area for prioritisation is the freeing up of the economy so that markets and firms – disciplined by competition, but supported by a capable state – are able to thrive.

“A growing economy is the only way to ensure that millions of people have the opportunity to rise out of poverty. Public-private partnerships need to be used to harness private sector capacity for infrastructure, and should be introduced as widely as possible,” said Bernstein.

According to CDE, a new approach to mass poverty and inclusion is required, based on incentivising employment for millions of people desperate for work.

“Public funds dedicated to small business promotion should be diverted to leverage private sector funding and expertise to expand opportunities for black entrepreneurs. Empowerment policies that hold development to ransom so that a small elite can benefit need to be rejected and replaced. Procurement policies need to be rethought,” said Bernstein.

It is essential that the rule of law is dramatically strengthened. Catalytic actions here include  reforming the Judicial Service Commission, reinvigorating the National Prosecuting Authority and the entire criminal justice system, and to start putting criminals – at all levels of society – behind bars.

“Hard choices need to be made about people, policies and how to get things done. This can only happen if a new approach to governance is implemented, built on a strengthening state and openness to markets, firms and competition across the economy,” said Bernstein.  

“The time for words and endless promises is over. This new Cabinet — whatever its size — needs to agree on its priorities and an agenda for deepened and speedy economic reform. We have a country to fix and millions of people living in poverty and desperate for work,” she added.

Over the coming weeks and months, CDE will be enriching the policy debate and putting forward workable proposals that can be implemented immediately to make a positive impact.

“CDE is excited at what our newly constituted GNU can do to put SA back on track. We must be aware of the risks, but we are determined to support the new government in building and executing its reform agenda, for all South Africans,” said Bernstein.

“We look forward to working with all reform-minded people in government, business and civil society in the months ahead,” she added.

Issued by Refiloe Benjamin on behalf of CDE, 5 July 2024