Cyril And NDZ: Battle For The Economy Takes Centre Stage

Caught between radical economic transformation and a new deal.
Mark Wessells / Reuters

If the economy were a person, it would be looking nervously at the two leading candidates, Cyril Ramaphosa and Nkosazana Dlamini-Zuma. Depending on who triumphs this weekend, the economy will travel in very different directions.

Dlamini-Zuma's final campaign slogan is "Radical economic transformation. Now". Ramaphosa, on the other hand, is going for a U.S.-inspired "New Deal", named after Franklin D. Roosevelt's plan to get the United States out of the Great Depression in the 1930s.

At an expanded unemployment rate of over 40 percent and with poverty afflicting one in two South African homes, the country is in its own Great Depression. Here's how the two candidates' plans converge and differ.

On growth

Ramaphosa's New Deal targets 3 percent growth in 2018 and 5 percent growth by 2023.

Dlamini-Zuma has not set a growth target in her radical economic transformation plans. She has proposed an economic Codesa (negotiating gathering) to set a negotiated path.

On jobs

Ramaphosa's New Deal promises 1-million jobs in five years. It is based on an understanding that his election will unleash investment to grow an economy stuck at an average of around 1 percent growth for 2017.

Dlamini-Zuma has not made a specific employment plan. But she said on her campaign trail that "radical economic transformation is an agenda directed at the large army of unemployed and poor South Africans, to build an economy and society that includes everyone, as a precondition for stability".

Deputy President Cyril Ramaphosa during an interview in his home in Hyde Park on December 08, 2017 in Johannesburg.
Deputy President Cyril Ramaphosa during an interview in his home in Hyde Park on December 08, 2017 in Johannesburg.
Deon Raath/Foto24 via Getty Images

On black empowerment and transformation

Ramaphosa's plan only places empowerment and transformation as number six of about 10 points on his plan. While he has been a significant beneficiary of existing black empowerment laws, he and his team say broad-based empowerment is a better model to spread wealth.

Ramaphosa's New Deal promises 1-million jobs in five years.

The New Deal is crafted from the tradition of nonracialism, and it proposes a social contract among government, business and labour. The New Deal promises to "accelerate the transfer of ownership and control of the economy to black South Africans".

Radical economic transformation has control of the economy by black people as the fulcrum of policy.

President Jacob Zuma defined radical economic transformation best in November 2016: "Radical economic transformation is the fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all Africans, especially the poor –– the majority of whom are African and female."

On land

Ramaphosa's New Deal is quite weak on land. All it says is: "We need to accelerate land redistribution, improve land productivity and provide support for new farming activity."

Dlamini-Zuma has made the return of land a fundamental policy plank of her campaign. She has framed it as a policy of justice, rather than the technocratic debate that land can often descend to, but she has also not push flesh on the bones of what a radical land redistribution policy may look like.

Dlamini-Zuma has made the return of land a fundamental policy plank of her campaign.

"Radical economic transformation is nothing new. The land is nothing new, the wars of dispossession went [on] for centuries because our forebears knew that land was an asset. Just in Eastern Cape, they fought for 100 years for land, but this time we are not going to fight for it. Our forebears sacrificed and lost their lives so that now we can be able to get [land] in a civilised manner," the candidate said in August.

Last weekend, she reiterated: "We want people to get their land back. There is no dignity if people do not have land."

Candidate for the ANC leadership, Nkosazana Dlamini-Zuma.
Candidate for the ANC leadership, Nkosazana Dlamini-Zuma.
RAJESH JANTILAL via Getty Images

Markets versus state

Ramaphosa's New Deal is a market-led economy, which places a lot of faith in unlocking private sector investment.

Dlamini-Zuma's vision is for almost completely state-led economic growth and transformation.

South African Reserve Bank

Ramaphosa's New Deal is silent on the Reserve Bank

Dlamini-Zuma's team earlier this year distributed a speech attributed to her that said the SA Reserve Bank would no longer be allowed to hold on to its "amorphous independence", and would have to follow development goals set by the ANC government. The candidate did not follow this line in her delivered speech.

Concentration of the economy

South Africa's economy is very concentrated, and both candidates say that it needs to be opened up to allow more and new players into growth sectors.

While the conference will be dominated by the race for who will lead the ANC, the contestation over economic direction will be the most significant set of policy talks at the four-day mega-meeting.

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