GNU on shaky ground after Ramaphosa reneges on offer to DA

The government of national unity (GNU) is on shaky ground following President Ramaphosa’s decision to renege on his offer to the DA late on Wednesday night. 

Business Day reported on Tuesday that the DA was offered the strategically important trade, industry and competition ministry, which is key to the ANC’s transformation agenda.

However, it is also understood Ramaphosa was convinced to retract the offer in a meeting of the ANC top brass on Wednesday on the grounds it would result in “pushing back levers of economic redress”.

The previous ANC government was active through trade, industry and competition minister Ebrahim Patel to regulate the economy through B-BBEE, import duties, sector master plans and the use of the public interest provisions of the Competition Act, much of which is antithetical to the DA’s thinking.

The DA regards the ANC’s trade and industry policy as protectionist, and is in favour of increasing market access through the use of comparative advantage as well as specialisation.

The DA would prefer to scrap sector master plans, has a different approach to redress through BEE and doesn't support the minister having the power to intervene in mergers and acquisitions to pursue public interest.

Holding the trade, industry and competition ministry would have given the DA significant powers to direct economic policymaking. It is understood that Ramaphosa instead offered the DA ministries such as tourism, public works, agriculture and transport, among others.

This has thrown the DA into what party leaders describe as an impossible situation. DA insiders have told Business Day that they have had to swallow a number of concessions in the past weeks including taking a back seat on the speaker of the national assembly, the inclusion of the likes of “fancasts” in the national executive and possible huge compromises in the appointment in the Gauteng provincial executive.

“We are done, enough is enough,” a senior DA leader said.

Ramaphosa's spokesperson, Vincent Magwenya, said that Ramaphosa was making every effort to ensure the GNU remained true to its founding spirit of collaboration “in good faith to ultimately drive a programme that improves the lives of all South Africans”.

“The process of the GNU negotiations should be allowed to run its course and for the president to apply his mind. This is a complex process that could not have been scripted before. The president is not only applying his mind to the allocation of positions in cabinet but to the sustainability of the GNU framework over the full five-year term.”

Agreement between Ramaphosa and the DA on the composition of the cabinet will be a critical step towards establishing a GNU. It has the potential to calm markets, which have been jittery in recent days on worries that the give-and-take negotiations over the past week have exposed deep-seated ideological differences among GNU members.

The rand broke below R18/$ for the first time in almost a year last week when Ramaphosa was inaugurated. But it has given up some of those gains, retreating to above the R18/$ mark on Monday and staying at those levels for much of this week.

Ramaphosa must balance the needs of the ANC and DA, while ensuring that his national executive is capable of effectively implementing his reform agenda to prevent further decline in voter support for the governing party. The drop in electoral support for the ANC has resulted in the party losing 71 parliamentary seats.

Some of Ramaphosa’s best-performing ministers are not returning to parliament, limiting his choices for the cabinet.

omarjeeh@businesslive.co.za

ensorl@businesslive.co.za