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Can Ramaphosa Do It?

Following South Africa's recent parliamentary election, President Cyril Ramaphosa has a long economic reform agenda and a public impatient for results. He will need both skill and statesmanship to overcome the corruption and bureaucratic inertia holding back the country's economy.

CAPE TOWN – South African President Cyril Ramaphosa led his ruling African National Congress (ANC) party to a comfortable victory in the country’s parliamentary election earlier this month. But engineering the economic recovery that South Africa needs is likely to be much harder.

True, the country’s banks withstood the stresses of the 2008-2009 recession, and the Reserve Bank of South Africa has kept inflation within or near a 3-6% target range for the past 20 years. But a decade of stagnating incomes, rising unemployment, and serial revelations of business wrongdoing and official corruption has fueled widespread public discontent. Little wonder, then, that the share of the vote for both the ANC and its main rival, the opposition Democratic Alliance (DA), fell amid a marked decline in turnout and rising support for left- and right-wing nationalist parties.

Moreover, the new ANC-led government will have little room to provide fiscal stimulus. Government debt is rising as a share of GDP, the country’s credit ratings are under critical scrutiny, and huge shortfalls in the balance sheets of state-owned enterprises are straining public finances.