COMMUNITY LIVING
Thus , Covid is unlikely to have any further deeply negative impact on the economic recovery . While a fourth infection cycle is indeed possible , regulations will likely be even less severe , as another infection cycle should be relatively mild , given ongoing vaccination . Global growth and commodity prices should remain robust amid ongoing policy support in the short term and the likely very slow removal of such support in the medium term .
The good news
It is probably worthwhile to run through the positives we have seen recently , to measure the reality against my base case of an expected economic recovery over the next few years .
On the political and policy fronts , there can be no doubt that there has been a truly remarkable turn of events late in the second quarter of 2021 . It seems clear that the ANC overall , and the NEC ( National Executive Committee of the ANC ) in particular , is backing the President more strongly than ever .
President Ramaphosa has been able to resolutely drive his anticorruption crusade with the NEC ’ s decision that all members accused of corruption should step aside until investigations or court proceedings have been finalised . Thus , the ANC ’ s Secretary General was forced to temporarily vacate his position . As he was perceived to be one of the main obstacles to the anti-corruption and economic reform campaigns , this is a big step in the right direction .
Furthermore , the Constitutional Court ’ s ruling that the former president was in contempt of a previous judgement , and would thus be jailed , was monumental for South Africa ’ s judiciary . While South Africa has always been perceived as having an independent judiciary , the latter has come under increasing attack in recent years . This ruling clearly and soundly reaffirms the rule of law . No matter what transpired afterwards . The ruling has clearly defined the responsibilities of ruling politicians and the repercussions of defying the courts .
While the July unrest might have started as a backlash to the imprisonment of the former president , it quickly gained momentum because of the dire unemployment and poverty in the country . These are the consequences of weak economic growth over many years , resulting from slow and weak policy reform and implementation .
While the economy will likely recover in the short term from the unrest impact ( more on that below ), the larger question is whether these events could be an inflection point for faster , better economic policies that could potentially accelerate the uptrend towards stronger and more sustained economic growth in the medium term .
I believe that could be the case .
But – given the political cycle – that might have to wait until after the local government elections in early November . I strongly believe that the spurt of policy action late in the second quarter was not the last seen in this space .
All change
During the second quarter of 2021 we saw several new announcements on policy and corruption , and this is where President Ramaphosa shows ownership of his renewed emphasis on policy change .
• In June , the President announced that the limit for selfgeneration of electricity without licence will be lifted from 1MW to 100MW ( substantially more than the 10MW the Energy Minister was reluctantly considering and double what business was hoping for ).
• South Africa ’ s ports will be unbundled from Transnet , thus being able to reinvest revenues generated from port operations in upgrading and expanding port infrastructure – without the
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