The year ahead: Identifying critical issues amid the political and economic noise of 2025

With school children now back in class, traffic patterns re-establishing themselves and most workers back in their daily routine, 2025 is now formally under way. Already, because of events both here, in the US and in the Middle East, it is clear that this year will be incredibly noisy. The true test may be choosing what noise to ignore, and what news to focus on. The economy, water and the ANC’s succession battle are three dynamics that cannot be ignored.

The year 2025 might be remembered for being a year when the volume was set to the max.

We have parties with wildly different agendas working together in the government, two big populist parties in Parliament, more conflicts in more parts of the world, and Donald Trump about to take the oath of office for the second time (and thus setting the tone for leaders in other democracies).

Many of our politicians will also have a very real motive to be as loud as possible. It will not just be about trying to get attention before next year’s local elections, but about being seen to stand up for their constituencies. To do this, many will deliberately pit their constituencies against the constituencies of other parties, creating artificial trade-offs.

This means that it is likely some parties might well claim the national coalition is threatened by this bill or that regulation.

However, it is likely that in fact all of the parties in the current coalition will remain until the next national elections, mainly because it suits both the parties and, crucially, their leaders.

But all of this noise might well obscure what is really going to matter this year.

The economy

In the longer course of history, it is possible that 2025 is remembered for being the year our economy finally turned the corner. The latest prediction for this year (by a panel of economists assembled by Bloomberg) suggests our economy will grow by 1.7% this year. Of course, this is nowhere near enough to make a real change in the incomes of most people.

However, as the Standard Bank economist Dr Elna Moolman explained on The Money Show this week, this is still significant.She says that this is not a “normal” growth bump caused by a once-off event, such as a drop in interest rates. Rather, this growth will be the result of very real structural changes. In particular, the end of load shedding, the beginnings of a recovery from the logistics crisis at Transnet, and several other factors mean that this should be a much longer term change.

Importantly, this change builds on itself; in other words, while the forecast is for growth of 1.7% this year, her forecast for next year is now 2.1%.

In other words, if this restructuring continues our economy should slowly start to grow more strongly year after year.

This is crucial; if our economy is able to get to a point where GDP per capita increases, and most people start to get more income on a regular basis, then everything should start to change.

This means that amid all of the noise, it is entirely possible that we are about to live through an era that delivers a (slightly!) better future.

It may be worth trying to focus on what will help and what will hinder economic growth, to the exclusion of much of the noise.

There are other factors that will affect the lives of almost everyone, and our politics and thus our economy in the longer term that must not be ignored. Chief among them might well be the problems many councils are having in providing water supplies regularly.

It is clear that most of our metros are now going to battle to provide proper water supplies. So large is the scale of the problem, many will not be able to fix the infrastructure that has been neglected for so long.

Largely silent

There will be much noise around this issue this year. While Senzo Mchunu played a fairly active and public role in dealing with these problems while minister of Water Affairs and Sanitation, Pemmy Majodina has been largely silent. She may well be working behind the scenes, but it is likely that demands will grow for her to play a more public role.

This means she may find she has to attend public meetings and meet with local residents and the mayors of many councils over the next year.

Unfortunately, unlike load shedding which could be fixed with a strong focus on one set of massive machines controlled by one entity, fixing water involves dealing with local councils. Each of these will have their own political dynamics and problems. And, as President Cyril Ramaphosa mentioned over the weekend, there is also corruption in this sector as members of the “water mafia” deliberately sabotage infrastructure so they can provide water tankers to affected areas.

Water may well be the defining issue of next year’s local elections, which alone will ensure there is a lot of noise about this subject.

The trick here may be working out which noise to ignore, and which to listen to.

The other noisy issue that will require attention will be the beginnings of the ANC’s succession battle.

It is a useful indication of how much has changed in our politics in recent times that in December 2012 it was possible to predict that the 2017 ANC leadership contest would be between Cyril Ramaphosa and Dr Nkosazana Dlamini Zuma, but with just two years to go, it is still not clear who will be contesting in 2027.

This means that contenders are likely to test their strength through proxy battles at the ANC’s national general council scheduled for later this year.

As a result, one of the key tests of this year may be trying to work out who is gaining ground and what that could mean for the coalition and policy going forward.

Of course, as the ANC continues to lose support, it will become less important. And, as no party will have a commanding majority in the near future, it means that they will all have less power, and thus, strangely, our politicians may become less important.

This will be one of the reasons that they try to turn up the volume, making it harder to see the real picture that lies beneath the noise. DM