Political impact of COVID-19 – President given a “get out of jail card”

The political impact of Covid-19 could possibly have the biggest impact on South Africa. Post Covid-19 socio-economic problems being faced by the state could be attributed solely to the pandemic (eg unemployment levels, declining exchange rate, etc).

Covid-19 provided the President of South Africa with a “get out of jail card” and to restructure the economy of the country.  For example, the ability to support particular economic sectors (eg tourism) and provide the opportunity to break the impasse between the “populist” and “pragmatist” in the ANC. In other words, the “populists” that wants to fund for example State Owned Enterprises (SOEs) versus the pragmatists who needs to find the funds to finance such policies.

Over recent months there has been a change in the narrative towards prescribed investments by pension funds into state initiatives. Signaling that the government will not be able to fund all initiatives post COVID-19 from the limited IMF/World Bank funding being sought. The only real conditions of this funding from the IMF/World Bank would be to hold the state accountable to its Medium Term Budget Policy Statement (MTBPS) of improving the business environment, pulling back on support to SOE's and bringing the public sector wage bill into control.

It provided an opportunity of realigning interests and allowing the ascendance of the “pragmatist” in the ruling party. Unfortunately, this undermines the populist dimension of the ruling party and It would seem that the president has missed this vital opportunity.

Michael 'O Donovan is a political scientist and data scientist that has worked on the Covid-19 data since the pandemic started in South Africa.

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