South Africa Elections: Cyril Ramaphosa and what the future of business holds

A major bone of contention for Ramaphosa once he returns as president is reform in education.
South Africa Elections: Cyril Ramaphosa and what the future of business holds

Another landmark election for the continent, is underway in Africa’s second biggest economy, South Africa. South Africans have voted in a general and parliamentary election. As one of Africa’s leading economies, the elections will have ramifications for the rest of the continent.

South Africans trooped to the polls on Wednesday and the tallying continues. A new president will be announced on Saturday, but with early results, the ruling African National Congress (ANC) remains the dominant political party in the country and its candidate, Cyril Ramaphosa has a lot of issues to contend with if he’s returned elected.

From corruption scandals, growing urban crime, call for free education, economic instability, to perceptions that the party has lost touch with ordinary citizens, he’s got a lot on his plate but many expect him to bring his business prowess to play.

As the fifth and incumbent President, Ramaphosa, previously an anti-apartheid activist, trade union leader and partly communist, is a businessman. He previously held notable ownership in companies such as McDonald’s South Africa, chair of the board for telecoms giant, MTN and member of the board for Lonmin, one of the biggest mining companies in the Southern African nation.

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Despite his credentials as an important proponent of his country’s peaceful transition to democracy, he has been widely criticised for the conduct of his business interests, but never indicted for illegal activity in any of these controversies, one of which, is his employment on the board of Lonmin’s Marikana mine and his active stance in the 2012 Marikana massacre at Lonmin premises, which led to about 30 workers’ death.

His business dealings with Glencore and allegations of benefitting illegally from coal deals with Eskom have also been called to question.

While dealing with these allegations, he has been notable for spearheading trade relations on behalf of his country, the likes of Singapore and Vietnam where they agreed on expanding trade and furthering education.

The Bilateral trade with Singapore has grown significantly, to R23.5 billion in 2015.

However, a major bone of contention for Ramaphosa once he returns as president is reform in education.

Education reform has been a priority in South Africa since the establishment of the Government of National Unity in 1994 and has played a key role in redressing the injustices of Apartheid.

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Impressive progress has been made in education legislation, policy development, curriculum reform and the implementation of new ways of delivering education, but many challenges remain in many areas, such as student outcomes, labour market relevance, and funding.

Another issue, made more widely known by the student protest #FeesMustFall movement, is access to tertiary education for previously disadvantaged students.

Ramaphosa inherited a decision made by former President Jacob Zuma to grant more students access to free education, but it remains to be seen what his own stance will be on the matter and how he, along with national treasury, will provide support to the education department to make this feasible.

Last December, the government, in its 2018/2019 budget review, planned to implement fee-free higher education in a phased approach.

It planned to:

• Raise an additional R36 billion in tax revenue through an increase in the VAT rate, limited personal income tax bracket adjustments and other measures
• Reduce the Medium Term Budget Policy Statement baseline expenditure by R26 billion
• Allocate R12.4 billion for fee-free higher education and training.
• Set aside an additional R5 billion for the contingency reserve
• Provisionally allocate R6 billion for drought management and public infrastructure.

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The national treasury reported that baseline spending reductions and tax measures feed through to the outer years of the framework, while allocations to higher education increase sharply.

Funding is a big issue if he intends to continue on this path but analysts are hopeful that Ramaphosa will bring his business to the table for inflow of investments for economic development.

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