The new carbon tax is “a bad idea” because government has delayed reforming SA’s energy sector, blocking the shift away from carbon intensity that the tax seeks to encourage, says Intellidex analyst Peter Attard Montalto in Business Day.

Intellidex analyst Peter Attard Montalto struggles to see real economic reformers, policy wonks and implementers entering cabinet. Featured in Business Day

Get to know Intellidex’s head of capital markets research Peter Attard Montalto through an entertaining question and answer article in this week’s Financial Mail

“I can’t think of anyone within Eskom who has the political savvy and technical knowledge required of the CEO, or who would want the position,” says Intellidex analyst Peter Attard Montalto. Highlighted in Bloomberg 

NHI, Reserve Bank nationalisation, the Mining Charter, the Credit Amendment Bill and the manner of land reform are but a few issues that could stand in the way of growth-inducing reforms

This column was first published in Business Day

SA is full of contradictions and things that don’t make sense. It will be the job of the new administration — in the process of being appointed as this column goes to press — to pick at these knots.

Firstly, what are the binding constraints on growth and how are these nested inside each other? The year 2018 showed that growth was harder to kick-start than expected. Removing “negatives” was not sufficient and whilst sentiment improved, animal spirits did not return. (Economist John Maynard Keynes coined the term “animal spirits” to refer to emotional mindsets.) The first quarter of 2019 was the same, masked by load-shedding, underlying growth would have actually been exceptionally weak anyway even if there hadn’t been load-shedding.

A further improvement in sentiment after the elections will not cause growth and the resumption of animal spirits without someone opening the taps. Given the constraints on the fiscus and monetary policy, that is going to have to be banks. However, bank cost-cutting and risk aversion are likely to mean a large-scale leap higher in credit growth is unlikely.

Banks did not come to the party in 2018 and so credit growth dropped to only 5.6%,  the weakest since 2011. We see it only recovering to 6.4% growth in 2019 . Credit booms can be unhealthy and are unsustainable, but are a useful bridging mechanism before the impacts of structural reform can take root.

Two other binding constraints are skills and electricity, and these show further contradictions here. If the economy couldn’t find the skills when it was growing at 1%, how will it find them quickly enough when growing at 2%, 3% or 4% ? Education and skills problems in the country are eminently solvable — but it takes significant time. The quick fix is importing large numbers of skilled immigrants (including into key state-owned enterprises management) — and is yet again (as I’ve written here so often) why the visa issue will be the key issue to watch.

The same is true for electricity. With the system unable to cope at 1% growth, how will it cope with faster growth? Yes, we will have more Renewable Independent Power Producer Procurement windows from later in the year and an Integrated Resource Plan eventually, but with no new investment since 2014 it will take at least 18 months to start seeing new capacity. New capacity from Medupi and Kusile will come on-stream but with required mothballing of old plants and efficiency issues of new units running anywhere near their nameplate capacity, so that is not a silver bullet.

In 2018 also taught that clean-up was not sufficient for growth. This needs to be borne in mind in the coming year as we see a fresh cabinet that is clean as necessary but not sufficient for growth. The far more important qualification will be implementation skills, raw management capability and the ability to manage change.

The point here is that if positive change can come, the constraints of growth will take time to be lifted.

The economy is basically in a kind of South African-style Japanese deflation, with low growth reinforcing low expectations and reinforcing risk aversion, and that in turn reinforcing low growth.

The Public-Private Growth Initiative process on the surface is another form of statist Industrial Action Policy Plan-style command and control, yet is possibly one way to kick-start things. But it is not a sustainable way of running an economy and risks reinforcing the same statist mindset into policy-making.

The next contradiction is that SA has no growth, yet it has all the right plans. I think one of the most negative things we could see from the new administration would be the announcement of a new economic plan formation process involving more summits. All plans are already on the table. There is always an obsession within ANC circles of finding low-hanging fruit that no one else has thought of. Indeed, I’ve often been interrogated by ANC members as to some secret growth-boosting policy that for some reason is being kept secret …

That ultimately comes back to mindset and the need for implementation. A reformed presidency may be able to shift the dial somewhat but capacity constraints and vested interests will come back to bite. Hence a running jump on implementation is needed.

In the coming months, we need to be careful to split PR from substance, policy from implementation. This will be most critical with Eskom but also visas and other reforms. We should also be cognisant to consider reforms in “net” terms. In other words, two steps forward can be offset by a step backwards.

This is especially true of the National Health Insurance, Reserve Bank nationalisation, the Mining Charter, the Credit Amendment Bill, prescribed assets and the manner of land reform.

“Negative reform” to coin a clunky phrase, can hold the economy in this South African-style Japanese deflation. Adding in political contestation and factionalism can only make those issues worse,  as well as 19 extra EFF MPs. Such issues can’t simply be kicked into the long grass.

Investors are surprisingly sceptical, seeing my view that we get back to 2.0% growth in three years as rather bullish! A poll of investors Intellidex conducted before the elections showed only a one-third probability of successful implementation of meaningful growth-boosting reforms in this parliamentary term. Investors have seen already strong PR and a glossy message during interactions with the president but been more sceptical about the substance. The same is true of local businesses as well when the supportive veneer is peeled back.

Growth is hard. The global environment is making it doubly so. SA doesn’t need a long walk to reform but, with a wild run and jump towards the goal. It’s now or never.

• Attard Montalto is head of Capital Markets Research at Intellidex.

Intellidex’s Attard Montalto is expecting a series of positive “big bang” announcements and events over the coming month that will stoke fresh “Ramaphoria” and broadly keep SA assets on the front foot. In today’s Financial Mail

Peter Attard Montalto, head of capital markets research at Intellidex, says that absence of Gigaba, and Mokonyane from Ramaphosa’s mooted new cabinet is largely market positive. Featured in Business Tech 

While the Financial Mail rankings represent the views of asset managers and other institutions in SA, the Extel rankings are based on the opinions of institutional investors in the rest of the world. You will be able to see both in the magazine next week in one package.

As South Africa’s capital markets have become increasingly traded by foreign investors, their opinions have become more important. Many South African-based brokers target a worldwide customer base.

The Extel survey assesses teams for their coverage of SA, rather than individual analysts as the FM rankings do. The Extel results are derived from an online survey conducted in March and April covering asset managers in approximately 55 countries. The FM rankings are based on a survey of 40 institutions, but the feedback is broken down into 40 different research sectors, ranging from large cap equity analysis to analysis of derivatives and risk management. The FM’s firm rankings are then based on a weighted addition of each research sector. Read more on Extel’s role here

By Heidi Dietzsch

Creating a well-designed survey but no one completes it is a bit like throwing a huge party and no one pitches up.

The market research process consists of many important steps, but probably the most vital is to entice potential respondents to participate in a study. All the other steps might have been perfectly executed – you even have a visually compelling online survey in place – but if people don’t complete your survey, it’s is as good as doomed.

There are many reasons why people are hesitant to complete surveys, but there are ways to diminish this unwillingness.

Possibly the main reason is that the questionnaire is too long. Researchers often feel they want to gather as much information as possible and need to ask lots of important questions. However, overly long surveys can have the opposite effect than was actually intended. A 2017 study (Consumer Participation in Research) conducted by GreenBook investigated the impact of poorly designed surveys on research quality and respondent experience. It found that 45% of respondents believe that surveys should be take less than 10 minutes to complete.[1]

Ensure your survey is short and concise. Expecting respondents to participate in a very long survey might convey the impression that you don’t value their time and disregard them as being unimportant. Respondents are the lifeblood of market research and should be treated fairly and with respect. Apart from low completion rates, lengthy surveys can also result in poor data quality because respondents might rush through it without really considering the questions.

People are usually willing to participate in surveys, especially if they have a vested interest in it, or if they believe the research will lead to positive change. However, if participation requires additional effort – for instance if respondents are asked to check which brands all the electrical appliances in their homes are – they will lose interest fast. You are already asking them to take time out to complete the survey but now you are also expecting them to step away from their computers or cellphones and do extra work. Few respondents will adhere to such a request.

Respondents’ boundaries should also be respected. To researchers, online surveys can seem like a conveniently impersonal way of asking people for information. After all, it’s easier to ask people sensitive questions when you are not dealing with them personally. However, for respondents, those questions can be just as sensitive as they would be in person. Asking questions that make respondents uncomfortable can cause a great deal of respondent fatigue.[2]

Researchers know too well that not all topics are easy to talk about. People will naturally shy away from certain subjects  because they are deemed to be too personal, stressful or sacred, or they fear stigmatisation.[3]  Controversial topics that might cause respondents to think twice before taking part include personal income and finance, sexual behaviour, illegal behaviour, drug and alcohol use, religion and health – especially mental health.

It might be necessary to minimise the number of controversial questions or exclude them altogether, although this can affect the robustness and granularity of the data. Otherwise, such questions can still be included in the survey but shouldn’t be mandatory. If respondents cannot skip a sensitive question they will most probably leave the survey at that point. Researchers should also think of clever ways of making these types of questions less offensive so that respondents are more likely to answer them.

Many respondents would prefer to complete surveys on their smartphones. Researchers should ensure that surveys fit perfectly onto a small screen device with the question layout in exactly the same format as it would be on other devices. It’s extremely frustrating if a survey on a smartphone requires considerable up and down and left to right scrolling. This is also likely to result in many respondents abandoning the survey.

Non-responsiveness is not the only obstacle: another is respondent bias. This occurs when respondents are unable or unwilling to provide accurate or honest answers to a survey. This could be due to various reasons, but most often it’s due to unfamiliarity, respondent fatigue, faulty recall, question format and question context.

Acknowledging this, researchers need to be vigilant in framing their questions clearly and to the point. But even the most well framed and thought-out questions are not bullet proof to inaccurate answers. That is why it is imperative that every question has an opt-out choice. This is usually in the form of a “Don’t know,” “Not sure” or “Undecided”. Not only will adding the opt-out choice eliminate a lot of inaccurate answers, but it will also provide researchers with valuable information. For instance, you can learn how many people have not made up their mind or are uneducated on a topic.[4]

Unwillingness to provide accurate or honest answers might also stem from a phenomenon called social desirability bias. This occurs when respondents feel pressured, either internally or externally, to provide a socially desired response. Accordingly, the information from these respondents will be biased and will not accurately reflect the target population.[5]

Social desirability bias is particularly prevalent when respondents participate in employee satisfaction surveys, political polls or behavioural studies. For instance, when employees are asked to rate their working environment or manager, they might give a more favourable rating than they actually feel to be the case out of fear of being ostracised in the workplace. It can also lead to over-reporting “good behaviour” or under-reporting “bad behaviour”.  This can happen even if employees are ensured that the information they provide is anonymous.

Similarly, voters may tell pollsters that they are undecided or will vote for the socially acceptable option while planning to vote for a more controversial candidate on election day. Also, when confronted with the question, “How many glasses of alcohol do you consume per week?”, respondents will tend to downplay this number. Similarly, research on feelings of insecurity has shown many times that men tend to downplay their feelings of insecurity as they are – rather stereotypically – expected to have less fear than women.[6]

Of course, participation rates can be increased by offering incentives. There are many ways in which respondents can be incentivised and it can be monetary or non-monetary. The value of the incentives will depend on the type of project and the amount of time the respondent will spend taking part in the survey, as well as the topic being researched. When research topics are very sensitive or personal in nature, the value of the incentive generally needs to be higher.

Studies have shown that cash is king and is most likely to pique the interest of potential respondents. Non-monetary incentives such as thank you gifts are less successful in increasing response rates.[7]

Disregarding the respondent experience in the research process is unproductive and senseless. Respondents are doing you a favour by participating in the research and this should be valued. Survey participation should be a pleasant and informative experience, and should not be associated with washing dishes, preparing taxes or standing in lines at government departments.








Johannesburg -For the first, time, the annual Financial Mail Ranking the Analysts results will include the views of global investors.

Next week the FM will carry this year’s results of the highly sought-after awards and ratings for analysts who service institutional investors in South Africa. Intellidex, which conducts the research for the survey, has now included the Extel/Institutional Investor rankings of South African sell-side industry by global investors.

While the Financial Mail rankings represent the views of asset managers and other institutions in SA, the Extel rankings are based on the opinions of institutional investors in the rest of the world. You will be able to see both in the magazine next week in one package.

As South Africa’s capital markets have become increasingly traded by foreign investors, their opinions have become more important. Many South African-based brokers target a worldwide customer base.

The Extel survey assesses teams for their coverage of SA, rather than individual analysts as the FM rankings do. The Extel results are derived from an online survey conducted in March and April covering asset managers in approximately 55 countries.

The FM rankings are based on a survey of 40 institutions but the feedback is broken down into 40 different research sectors, ranging from large cap equity analysis to analysis of derivatives and risk management. The FM’s firm rankings are then based on a weighted addition of each research sector.

For further information on the Financial Mail Ranking the Analysts survey, click here.

“There is a huge sense of urgency around Eskom and the need for a second iteration bailout…” says Intellidex analyst Peter Attard Montalto. In today’s Daily Maverick 

While the government allocated Eskom a R69bn cash injection over the next three years in the February budget, another bailout will probably take place in the second half of this year, says Intellidex analyst Peter Attard Montalto in Bloomberg.

Intellidex analyst Peter Attard Montalto says that in the short term the land reform process will face many challenges and entrench uncertainty, keeping any possible positives strictly in the long-term outlook. Featured in Business Tech

“There are a lot of things coming from Ramaphosa, but the implementation is crucial”, says Intellidex head of capital markets Peter Attard Montalto on the Xolani Gwala show.

Dangers of increased lending to entities in terms of creating problems for the economy and the banking system trigger decrease in loans

This column was first published in Business Day

Governments globally lean on the banking system when they need cash. SA is no exception. During the latter half of the Zuma presidency, as the financial position of state-owned enterprises (SOEs) deteriorated, banks sharply increased their lending to them. That creates problems for the economy and the banking system.

My analysis of banks’ statutory returns shows that the amount they lent to SOEs increased sharply from 2013 to 2018, when it reached a record high of R56.4bn, up 2.6 times from R21.6bn five years earlier. While the figures don’t break out just which SOEs received this cash, it is safe to assume that by far the biggest of these borrowers was Eskom.

Several issues arise when the banking system is being tapped in this way. The first is the overall risk of the system. Such lending is often driven more by political considerations than the usual balance of risk and return within an overall balance sheet context. Any bank has to be sensitive to being seen to support the government, especially on socially sensitive issues as serious as keeping the lights on.

The growth in lending increased banks’ exposure to SOEs from about 0.6% of total assets to 1.1%, almost doubling. Such loans can be a mix of short and long term, but as has been made clear by several recent examples (SAA most prominently), banks are often forced to roll over their SOE loans, so even short-term ones on paper are long-term in practice.

By directing their funds to SOEs, banks are often lengthening their balance sheets, meaning they can’t do as much other long-term lending, such as for mortgages.

Our scarce savings should be directed to the most productive uses

And even though much of the more recent bank lending to SOEs has been guaranteed by the state, there is still clearly credit risk. In the effort to save Eskom, the possibility of a restructuring of its borrowing is clear, with banks being forced into some form of rescheduling. So the increased exposure to SOEs really represents an increase in risk to their balance sheets.

The next problem is that it represents poor use of savings. As is often lamented, SA has a very low savings rate, with Statistics SA figures showing it to have been negative (we were spending more than we were saving) for almost all of the last 10 years. Our scarce savings should be directed to the most productive uses.

According to the Treasury, SOEs averaged a return on equity of negative 0.3% in the 2017-18 financial year. While profitability is not all that matters regarding SOEs, the fact that they are making bottom-line losses means that they are poor users of funding.

Bank funds should be directed to productive users of that money, such as profitable businesses who can use it to fund investment and drive economic growth (people often miss that profits are the fundamental source of growth. It is out of profits that investment is made and investment is the only way to increase the potential output of the economy).

So both because it is bad for the risk-return profile of banks’ balance sheets, and because it is bad for economic growth, the major increase in bank lending to SOEs is not a good thing. That seems well appreciated, with banks having cut back a lot so far in 2019, with total exposure down to R51.6bn or 0.91% of assets.

Foreign-owned banks

You might also be wondering which of the banks were most aggressive in the lending. The big four — Absa, Standard Bank, Nedbank and FirstRand — are obviously all there and steadily increased their exposure to SOEs during the period with no clear market share trends between them. Investec did not lend to SOEs during the period.

The most interesting movement was among foreign-owned banks, which collectively had about R7bn lent to SOEs at the peak and the largest exposures relative to their balance sheets. Citi, Deutsche Bank and JP Morgan all had more than R1bn lent to SOEs in 2017, with Deutsche’s R1.7bn the largest proportion of assets at 14.2%.

Of course, for foreign banks the concentration risks are less of an issue given the diversification of their parent balance sheets. But they have also been sharply reducing their exposures, which is down to R3.4bn in latest figures, though Deutsche has maintained its exposure despite scaling back in SA, which is up to 17.6% of its assets. The biggest reduction has been by Citi.

As the Ramaphosa administration works on sorting out the mess left from the Zuma years, banks will have to play their part. Eskom is most urgent and it looks like some plans are solidifying among the different task teams working on the problem, ranging from accessing global climate change funding to rescheduling Eskom’s mammoth R500bn in total debt.

For banks, the task of working out what role to play has to carefully balance political issues with risk management. Supporting the Ramaphosa presidency is close to the hearts of many bankers, but the Zuma years should have left them gun shy about putting more funding into SOEs.

The need to stimulate broader private sector activity is furthermore urgent and would be a better use of bank funds. Working out the perfect role to play will be a challenge for bank leaderships.

• Theobald is chairman of Intellidex.

Head of capital markets research at Intellidex Peter Attard Montalto joins CNBC Africa’s Karabo Letlhatlha to discuss South Africa’s increased unemployment rate.

Running a bank, you might think, is largely about the numbers. Ratios of capital to liabilities, of non-performing loans to performing ones, of short to long term funding, of provisions to book size. Yet the studies of banking collapses ultimately find explanatory power not in the numbers, but in the people. The report on the collapse of African Bank by advocate John Myburgh released last week is no exception. In it, the outsized personality of CEO Leon Kirkinis looms large over the bank’s fortunes and failure.

Kirkinis was, in the view of Myburgh, guilty of hubris, the “overestimation of one’s own competence, accomplishments or capabilities”. That allowed him to ignore others in the bank who argued that more caution was wise. Kirkinis was described as “extremely charismatic”, “very amicable”, hands-on and likeable. His personality enabled him to talk people around when they raised objections to his decisions for the bank. Kirkinis was right, others were wrong, and most believed it, including himself.

Kirkinis was certainly likeable compared to the usual stuffiness of other bankers. When I first met him 16 years ago it was in African Bank’s open plan executive suite. On first encountering him, he was wearing cowboy boots, hoisted up on his desk, while he leaned back in his chair on the phone in jeans and open-necked shirt. He never read newspapers, he proudly told me, after I’d arrived to interview him for a profile in the Financial Mail. His laughter boomed across the floor, infecting those around him. He believed with the zeal of a convert that the bank was doing good in the world by bringing finance to people who’d not been able to access it before. He was unlike any other banker I’d met.

But Myburgh’s report reveals how this positivity was required of those around him too. In the February before the bank collapsed in August, he emailed a large group of employees telling them that, “We need to find ways to lift the spirits and the energy of the people we lead and grow our unique culture positively” and “Our people need to be led by a committed leadership team that is united in our purpose. Neutrality is not an option.” The optimism-by-fiat approach is nauseating. Actually, what African Bank needed was some good old fashioned banking values that emphasised prudence.

It is striking to draw a comparison of the picture painted to Myburgh’s last report on a collapsed bank, that of Regal Treasury in 2001. The CEO of that bank, Jeff Levenstein, was an irrational tyrant, who yelled at and threatened anyone who challenged him, summarily firing staff at will. Myburgh described his management of that bank as “incompetent and amateurish” adding that “he confused corporate governance with thuggery”.

But while Kirkinis and Levenstein were on opposite ends of the likeability spectrum, the result was the same. They were both convinced they were right and no one challenged them. Perhaps the most egregious example in the case of African Bank was the decision to purchase furniture retailer Ellerines in 2007, which Myburgh shows was made by Kirkinis alone, without even obtaining board approval. It was a devastatingly bad decision that contributed substantially to the bank’s later difficulties. Kirkinis also convinced everyone that the bank was right to only set aside provisions for bad loans after clients had missed four months of payments rather than one as some other banks did. Toward the end he argued that the bank needed to raise less capital than it did and that it could still keep paying dividends, all because he firmly believed things were going to be better in future. His view of reality was clearly rose-tinted.

There has been much baying for blood in the African Bank collapse, but Myburgh does not recommend anyone should be prosecuted. He found the bank was run negligently and recklessly by the board, but that this was down to their incompetence rather than intent. The findings are in that respect also strikingly different to the case of Regal. Levenstein is currently behind bars after being found guilty of fraud and contravening the companies act.

The lessons for the management of banks are clear. No individual should ever be in a position to run a bank unquestioned. The CEO has a job to do, but so does everyone else. A bank needs to have capable and independently minded people, empowered to challenge decisions they don’t believe are correct. Bankers need a constant reality check, a test of whether their reading of the market is correct or not. The board of a bank, particularly, needs to exercise clear scrutiny of management and always act to protect other stakeholders, including depositors, funders and shareholders. A bit of boring, conservative, banking is not too bad a thing.

• Theobald is chairman of Intellidex.

Among the pre-election polls, the Intellidex poll emerged as being the most accurate. The poll was a representation on the thoughts of economists, investors and other players in the market. Featured in Business Tech

What the national executive committee does next is all that really matters

This column was first published in Business Day

There is a lot of having-cake-and-eating-it going on in the SA commentariat and market commentary. It is quite nauseating. A positive story is always required even when the facts are tenuous.

First, 60% for the ANC was required for reform, now actually having less is better. The reality is that the election results matter little for what comes next.

The real question now at the heart of what comes next is this — what does the neo-patrimonial majority within the ANC’s national executive committee do? This is all that matters.

Currently this disparate grouping is split, but with a sufficient number supporting President Cyril Ramaphosa to bring him to power at Nasrec and then bring him to the presidency.

They will stick with him, and their numbers will grow if he can deliver an electoral narrative in the next five years through the 2010 local election to the 2024 national elections that keep the ANC in power and rent extraction running.

However, equally as the taps get turned off and the clean-up progresses they will be forced away and will support alternatives into the 2022 next ANC elective conference.

These two-way forces will dictate what comes next politically but also on policy. The ANC decided at Nasrec (just) that politically it needed new appeal through a shift in personality offering. A slow but steady clean-up, that maybe is selective, combined with the advantages of incumbency will likely mean Ramaphosa survives until 2022.

However, Nasrec did not change direction in terms of policy to ensure its electoral success through either its policy offer or implementations subsequently.

Indeed, these elections were incredibly dull for the lack of policy contestation. Sure, there were stand-and-deliver speeches on policy but it never felt like there was a true battle of ideas and head-to-head comparison of alternative visions. Instead it was a clash of party machines and emotions.

Nasrec shifted policy towards populism (and rent extraction) with the Reserve Bank nationalisation, prescribed assets and land (as conceived through the need for a constitutional amendment as opposed to fundamental institutional change).

Policy has the added complication that it is complicated, hard to implement and requires the deployment of political capital — a mastery of the functioning of the state.

The interplay between policy and the functioning of the state has been a central theme of my past 12 columns here since I joined Intellidex. It is incredibly important for investors and the economy.

We know that Ramaphosa can give amazing state of the nation speeches and can crowd-source ideas for policy. Implementation, however, has shown, at best, no urgency until a crisis —  like Eskom — becomes apparent. Unemployment and inequality clearly do not count as crises.

The issue is that a fundamental system for the deployment of political capital to move the levers of state efficiently and sweep out vested policy interests was certainly not evident in the past year. Presidents cannot do implementation; they must provide the leadership that puts systems in place that allow others around them to deploy their political capital on their behalf and drive implementation and change.

This means capable proactive ministers and advisers. Hence the first test will be how the presidency is shifted after the elections and the choices for cabinet (and indeed things such as committee chairs in parliament given that is an increasing route for policy formation). If this is not gotten right then what follows stands a much lower probability of success.

The ANC’s parliamentary list unfortunately did not contain a strong list of policy wonks (those generating policy for change) nor managers or implementers to get things done. One can probably count on one hand those that tick both these boxes.

The problematic nature of trying to have debates over credible, sensible succession options for various ministerial posts such as finance and public enterprise in the long term speaks to this capacity constraint.

The complex interwoven web of the ANC’s factions, but also the political and ideological forces within Ramaphosa’s own faction, are a key constraint on policy and potential growth rising. However more so is a generalised mindset of state-is-best and a distrust of business and the private sector.

This mindset has been evident through the campaign, most alarmingly around renewable energy (sceptical of the private sectors involvement) and coal (supportive of the status quo against the international direction).

A mindset change will have to come from the top, clearing away the factional and ideological web that is wrapped up in collectivism and that will be the core test change.

Collectivism can be used by Ramaphosa’s political and policy opponents to wrap him in knots. A lesson is needed from Jacob Zuma. He wrapped his opponents in the ANC’s collectivism, tying them down and allowing him to do what he wanted to construct state capture. He turned collectivism back in on itself and was the way he welded power and survived so long in the face of the obvious.

Ramaphosa needs to be the other side of the same coin. Turn ANC collectivism inside out to in effect be a loyal cadre of the party deployed to keep a seat warm in the presidency, but actually being a powerful deployer of effective political capital to drive implementation and change in the state into potential growth-boosting policy.

Now if that actually happens, that would be exciting.

• Attard Montalto is head of capital markets research at Intellidex.

Projections at this stage by Intellidex analyst Peter Attard Montalto have the ANC nationally at 57.5%, the DA at 20.44% and the EFF at 9.27%. Read more in today’s Daily Maverick.