So Donald Trump wins a second term as US president comfortably, effortlessly, beating a rival who made no endeavour to connect with Middle America, who utterly failed to craft a serious economic proposal for her country and who completely misread the lie of the cultural wars tearing at the US and other Western democracies.
It’s impossible to know how a new Trump presidency affects SA, though he will shake the world. Under Joe Biden we have had a friend in office. He overlooked our failure to condemn the Russian invasion of Ukraine. He accepted our explanations for the presence of a Russian arms freighter in our main naval base. He has been relaxed about our growing alliances with America’s enemies.
Had she beaten Trump, vice-president Kamala Harris would have broadly offered more of the same. But now that we have an unpredictable and erratic protectionist running one of our largest trading partners we had better start paying attention.
SA has had a golden few months since the ANC lost its majority in the May 29 election and formed a coalition government that includes the DA. But while sentiment has improved, actual economic progress on the ground is hard to find. In fact, apart from Eskom rallying to new leadership and keeping the lights on again, our physical economic position is stuck.
Electricity has so far been the only one of President Cyril Ramaphosa’s reforms to succeed, and even then merely to the limited extent of restoring Eskom to something like its performance of 10 years ago. His big combined effort with business also includes reforming logistics — our rail and ports networks — and crime. Both are significant deterrents to investment, and in both almost no physical progress has been made. Water will soon join them, but way back in the queue.
The Trump victory probably means we lose the luxury of time. We need to hurry up to look after ourselves.
The Trump victory probably means we lose the luxury of time. We need to hurry up to look after ourselves. Yes, there’s been lots of work and thought going into rail regulation, and you can be sure into crime as well. In logistics though, things have gone backwards. There is no upgrading of the rail network under way, and the award last year of a concession to a Philippine company to run the container port at Durban has been successfully challenged in court. Transnet management cannot tell Ramaphosa today whether the process gets back on track in six months or two years.
They simply don’t know. And worse, without a smoothly functioning port to export the things we make and grow through, the entire rail “reform” must be under threat. The smart thing to do would be to sit the rival bidders for port concessions in Durban, Coega, Richards Bay and Cape Town down and simply divide the jobs between them so all the ports get professional and financially strong operators. Yet Transnet prefers to wait and see first how Durban goes.
With leadership like that, SA exports are unlikely to trouble Trump, but it’s a tragedy for us. What investors expect from the government of national unity (GNU) is action. You can see the GNU straining to do something. And it isn’t just energetic DA ministers.
At trade, industry & competition the minister, Parks Tau, is already shifting — slightly — our industrial focus from import substitution to exporting. He told a Reuters reporter recently he was going to tweak BEE rules to make investing here easier for foreigners. That would be a big deal. Police minister Senzo Mchunu is trying to re-energise a demoralised police force. Ronald Lamola is bringing real strength to foreign affairs.
But it’s tough going. Finance minister Enoch Godongwana used his medium-term budget policy statement last week to bring home some hard truths. Growth, he said, would average only 1.8% over the next three years, and tax collection had not met expectations. He offered nothing to broke state-owned companies, but he did the GNU two big favours: the Treasury is creating special funding platforms specifically to encourage private sector investment in infrastructure, gathering projects together. And, critically, public borrowing to cofund these projects will not be accounted for as sovereign debt.
That is just so important. Borrowing to build projects that make our economy more productive and more competitive is critical and even more sensible if it is invested with the private sector. Borrowing for growth is a good thing. The Treasury has to hurry now and bring these projects into life — an enormous infrastructure build is critical to our future. There are hospitals and water treatment projects on the Treasury list, and Godongwana said the department of transport, Transnet and the Passenger Rail Agency of SA would work up a list of priority projects for 2026/27 (don’t hold your breath). What he was saying to his coalition cabinet colleagues was “Here, I’ve got the money right; now you go and do the growth”.
If only it were that simple. No matter how juicy an infrastructure project might be it doesn’t happen in SA until a host of familiar “transformation” hurdles are cleared — a BEE stake, various competition requirements, local content... These are now Tau’s burdens. Ramaphosa had wanted to put a DA minister in to run the department, but the ANC leadership rebelled because trade, industry & competition is the guardian of BEE.
Tau is a quiet and trusted pragmatist though, and may be the perfect person to clear investment barriers out of the way while keeping the ANC content. But he also has to get around Ramaphosa. The president wants to serve a full final term and to pick his successor, and if he felt it politically necessary to promulgate the full disastrous National Health Insurance Bill ahead of fixing Transnet and our ports he would do it in a heartbeat. At all costs, in his mind, he must survive.
He will need to show his reforms are working though by the time the ANC elects a new leader. But he’s slow. His every act is followed by a fudge, but you have to hope private capital flies through the windows Godongwana says he is opening. If he hurries, and if business hurries, it might not matter how ponderous Ramaphosa is.
• Bruce is a former editor of Business Day and the Financial Mail.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.