Power struggle between BMF and BLSA gave rise to radical policy
In the past few weeks, a three-word catchphrase has spooked investors. “Radical economic transformation” has become the catchphrase for supporters of the recent Cabinet reshuffle, which sent financial markets into a tailspin and led Standard & Poor’s and Fitch to downgrade South Africa’s debt to junk.
President Jacob Zuma said his restructured Cabinet, which affected 10 ministers and 10 deputy ministers in all, will drive radical economic transformation (RET). The rating agencies read this as a signal of a significant shift in South Africa’s economic policies, a prospect that has made investors nervous and raised fears of capital flight, rising interest rates, and the spectre of a recession. Since the Cabinet reshuffle, RET has been hotly debated.
Overhauled tender regulations to benefit black suppliers
After fierce lobbying, back-and-forth deliberations and litigation threats, the National Treasury on 1 April brought into effect preferential procurement regulations aimed at securing a bigger slice of state tenders for black and female suppliers.
The Black Business Council (BBC), South Africa’s main mouthpiece for black businesspeople, has clashed with the Treasury over amendments to the Preferential Procurement Policy Framework Act (PPPFA) regulations in the three years it took to reform the policy before it was gazetted on 20 January this year.