S. Africa’s Ramaphosa Skips WEF to Focus on Problems at Home

Rene Vollgraaff and Paul Vecchiatto
S. Africa’s Ramaphosa Skips WEF to Focus on Problems at Home

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South African President Cyril Ramaphosa will skip this year’s World Economic Forum in Davos, after a week in which he faced renewed calls to accelerate the pace of economic reform and in-fighting within his ruling party.

Ramaphosa is staying home “to give attention to pressing domestic priorities” and preparations for a meeting between the ruling party and the cabinet, the presidency said in a statement on its website. He also won’t attend a U.K.-Africa Investment Summit in London on Monday.

South Africa’s main business-lobby group warned this week the government is running out of time to avoid losing its last remaining investment-grade credit rating and must implement economic reforms urgently. That echoed a statement by Finance Minister Tito Mboweni on Jan. 10 that he’s frustrated by policy “inertia” within the government.

South Africa’s economy is stuck in its longest downward cycle since 1945, hobbled by power cuts, deteriorating public finances and delays in policy implementation. The central bank on Thursday lowered its growth forecast for this year to 1.2% from a previous estimate of 1.4%.

Eskom Holdings SOC Ltd., which generates about 95% of the South Africa’s electricity, resumed rolling blackouts last weekend, despite assuring Ramaphosa last month that outages wouldn’t resume until mid-January.

The renewed power cuts prompted Deputy President David Mabuza to say on Jan. 10 that Ramaphosa had been misled -- an indirect criticism of Public Enterprises Minister Pravin Gordhan, who is in charge of state enterprises. Gordhan, seen as an ally of Ramaphosa, has faced increasing calls from within the ruling African National Congress to be removed from his post.

Senior members of the ANC allied with Ramaphosa said criticism of Gordhan was an indirect attack on the president.

“The true target of those ANC politicians and their fellow travellers who are leading the attack is President Cyril Ramaphosa,” the so-called ANC Stalwarts and Veterans said in a Jan. 15 statement. “A convergence, or ‘unity,’ of these individuals and organizations is indeed underway and is self-evidently designed to bring about the removal of a president committed to rehabilitating the country’s institutions and eliminating corruption.”

The ANC’s executive council is meeting this weekend to discuss Eskom and other state companies like South African Airways. The cash-strapped carrier may be forced to cut some flights this weekend unless it receives 2 billion rand ($139 million) from the government.

South Africa will be represented in Davos and London by government and civil society representatives led by Mboweni and International Relations Minister Naledi Pandor, the presidency said.

(Updates with ANC executive committee meeting in penultimate paragraph.)

To contact the reporters on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net;Paul Vecchiatto in Cape Town at pvecchiatto@bloomberg.net

To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Paul Richardson, Robert Brand

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