PETER ATTARD MONTALTO: A year of noise and choices lies ahead

SA has a habit of slowing down into major political events. Time seems to almost stand still. We saw it this past year with the municipal elections. In 2019, with the national elections, we even saw a sharp slowdown in the pace at which the government spent money before the election — something most other emerging markets (that generally see spending speed up into political event) would think bizarre.

The whole of the coming year is going to be internal-ANC-navel-gazing madness as one event stretches to the next inexorably towards the elective conference and the (non-event?) re-election of President Cyril Ramaphosa.

The year will throw up a range of challenging questions with plenty of time to ponder these.

The battle will most intensely focus on the deputy president position and will tell us a lot about where the underlying majority and direction of the party really is once the broad — but loose — coalition that Ramaphosa has built disintegrates over time into a second term. The fallacy of the period since Nasrec has been that the battles have been the “Ramaphosa faction vs Zuma faction”, when in fact the most interesting issues were always intra-Ramaphosa faction — albeit a faction that is so broad since the step-aside realignment in the national executive committee as to not really mean much at all.

It would be interesting to consider — just to suspend disbelief for a moment — that some of the options for the top six would be judged on their competence in office and their policy views. Minister Gwede Mantashe’s already-formed campaign would become somewhat challenged in this regard, especially if we get a set of policy conference documents mid-2022 that actually acknowledge climate change and posit an even marginally sensible position on energy. His campaign may become the greatest test of the “Dilbert principle” of failing upwards.

But there is a serious point here. The minister has wielded great theoretically positive powers for change but has done remarkably little positive in his time in power; and, as we are seeing in the Eastern Cape at the moment, provincial power brokers will weigh up what the worth of various candidates really is. There may indeed be some reckoning of time in office.

Herein lies the challenge to the party and those whose support it seeks — particularly financially — in the year ahead. Is the party (as opposed to Ramaphosa himself and those closely knitted around him) a vehicle for positive change?

We have seen in the energy space this is clearly not so. The coming year will be so interesting here as wider actors like the financial sector and especially the Presidential Climate Commission (PCC) largely dictate the direction of travel — the latter strategically setting the tone on critical issues like gas’s role in the transition (finding the Goldilocks point of not too much and not too little). We have already seen how the PCC has been a driving and catalytic force through 2021 and I expect more of that from it in 2022.

The climate and energy policy nexus is the most fundamental change being forced on SA and it is interesting it is a body like the PCC that is at the centre not the ANC (or indeed other parties). Eskom needs special mention here too for largely just getting on with it. The written story of 2021 was how quietly it was the catalyst for so much change and potential in future — against the wishes no doubt of the department of mineral resources & energy. Eskom’s latest brilliant idea (that sounds sarcastic — it isn’t) to lease land to the private sector for independent power generation shows a state-owned entity starting (ever so slowly) to get to grips with not being the centre of attention in the long run — against the ideological wishes of many.

But herein lies the fundraising problem for the ANC. What is the point? This is something that businesses and individuals are going to be thinking a lot about through 2022 as the president and others come cap in hand. Where is the real locus of change in society? The past year offered an interesting alternative for private donors who funded ActionSA in Gauteng or the Freedom Front Plus’s foray into semirural areas both with decent results. Similarly, the DA’s fundraising dry spot can quickly be overcome with now a multitude of mayor figures outside the “obvious” story of the Western Cape — if they can last more than six months.

While discussing funding seems rather grubby, this is the necessary underbelly of democracy and Ramaphosa will again be going cap in hand in 2022 ready for his elective conference fight. Unlike in Nasrec there are options now.

The policy conference midyear gives the ANC the chance to offer fresh views and insights and to surprise us by “getting it”. The madness of the fairground ride of post-Nasrec land reform nonsense — distracting from the urgent and necessary “real” land reform moves needed by instead focusing on a political vanity project trying to change the constitution — is only the most obvious example.

Yet to offer a different vision at the policy conference would be to choose between the sensible National Treasury and the madness of the department of trade, industry & competition agenda — something that doesn’t seem likely to happen. In other areas like energy policy, however, perhaps the president can show a little ankle. The political winds of the basic income grant will be especially carefully watched too through the political events of 2022.

The ANC’s failure on section 25 of the constitution in the National Assembly was a reminder of the noise and fury that SA can produce and yet something very different can occur underneath.

The next year will be like that again on energy policy, especially as the minerals and energy department charges down a dead end of coal and nuclear procurement and tries to offer a vision of a just energy transition that is counter to anything workable — least cost, maximising jobs or in line with global norms. Beneath that, corporates will be quietly getting on with the job of registering and then building sub-100MW generation capacity, helped by Eskom land and Eskom leadership on wheeling.

Above all, though, in 2022 — for all the party pomp and the noise — we will have higher unemployment and higher inequality than in 2017, or even in 2021.

Whether investors or party funders, the question for all politicians — going through large-scale narrative-dominant events or mayors quietly trying to make a difference — will be, can you turn the dial here or are you just creating noise and distraction?

• Attard Montalto is head of Capital Markets Research at Intellidex. This article first appeared on