Noone doubts that Mr. Ramaphosa sincerely wishes to uprootcorruption. And his hiring of honest cops and prosecutors is an essential step in that direction. But he will struggle unless he also tackles some of the underlying enablers of graft. One problem is that many in the ruling African National Congress (ANC) believe that the party should control all the levers of power, and that the government should control “strategic” sectors such as powerplants, railways and ports.
Atradition of “deploying” party loyalists to run state-owned firms transmogrified, under Mr Zuma, into a habit of planting cronies into positions that enabled them to steal. The leftists in the governing coalition still say South Africa needs a “developmental” state to steer investment. In fact, state interference has repelled investment. By one estimate, had Mr Zuma been a benign steward, the economy would be 25% bigger.
Mr Ramaphosa plans to split Eskom into generation, distribution and transmission businesses to make it clearer which bits are losing money. He should go further. The state should not be generating power at all. It should break up and sell Eskom, and regulate the companies that buy it. The same goes for the state firms that run airports, fly planes and dig up diamonds.
There is a risk that privatisation could be corrupted. State assets could be transferred cheaply and opaquely to ANC bigwigs claiming to promote “black economic empowerment”, just as private assets have been in the past. However, this risk can be mitigated if assets are sold via transparent auctions and the markets thus created are regulated properly. Also, consumers will have to start paying their electricity bills, something many have grown used to avoiding. If Mr Ramaphosa wants to be remembered as the president who turned the lights back on, he will need to harness the power of the market.