Unions could complicate Ramaphosa’s social compact

Significance

While details are scant, the 'social compact' reportedly includes clearer deliverables than previous recovery plans. However, fears persist over government capacity to deliver and ongoing reform hurdles -- including trade union opposition.

Impacts

• Scheduled November by-elections could see the ruling ANC suffer setbacks after recent COVID-19-related scandals.
• The recent sidelining of populist ANC proposals such as nationalising the central bank will give investors some cheer.
• The diversion of more state funds to SAA will increase market scepticism over Pretoria's ability to push through reforms.