PETER BRUCE: Reform: has Cyril run out of steam and steel?

Is Cyril Ramaphosa losing his battle to reform? Has he, to borrow from Oklahoma, the musical, gone about as far as he can go? Is the mask slipping? There’s a sense almost of deflation abroad since he gave that briefing after an extraordinary ANC national executive committee (NEC) meeting on the last day of August.

He splendidly brushed aside a crude letter from former president Jacob Zuma, intended to deflect the party and government leader from pursuing strong action against corruption during the coronavirus pandemic and before. Ramaphosa had declared the ANC “accused number 1” as the national mood turned against the party after shocking details of fraud surrounding the procurement of protective personal equipment were laid bare. ANC members, he said the NEC had agreed, would be asked to vacate their positions if they found themselves under investigation for, or charged with, corruption.

The last time an ANC president had addressed the post-NEC press conference was in 2005 when Thabo Mbeki emerged to say he was firing Jacob Zuma as deputy president. Ramaphosa seemed to be riding high. Helping him was the publication earlier in the month of a meticulous and powerful document by JP Landman, an economist of real standing, detailing the reforms Ramaphosa had already undertaken and which an impatient SA public tended to forget in their mounting criticism of him and his party.

It is an important record of reform under Ramaphosa. We have quickly forgotten how decisively he dealt with the rotten Tom Moyane at the revenue service, or the Zuma plant at the top of the national prosecution service, Nomgcobo Jiba. It took steel he is seldom given credit for.

But if a week is a long time in politics, three weeks is orders of magnitude longer. Now we find ANC members under pressure to leave their posts declining Ramaphosa’s invitation to go. Instead they are either waiting for written instructions to leave from ANC secretary-general and Zuma acolyte Ace Magashule or taking themselves off to court to fight for their jobs. ANC members deeply implicated in the looting of VBS Mutual Bank in Limpopo have gone back to their jobs.

It is a measure of how toxic the ANC has become that even its leader cannot pull the levers he needs to. I thought Jonny Steinberg had a terrific piece in Business Day explaining why. Mbeki was the last leader to forget the dynamics of leading this party and his legacy hasn’t made Ramaphosa’s job any easier.

Nonetheless the closer you look now, the less convincing the reform “narrative” seems to be. There are ongoing battles, largely because Ramaphosa is surrounded by ministers who have no interest in reform, or even faster economic recovery. They are interested in protecting themselves. Ramaphosa has constantly to swerve behind them to push and badger ministers, who should be allies, to keep the many promises his reform programme makes rolling along.

Gwede Mantashe at energy, for instance, is supposed to be leading the charge to find between 2,000MW and 6,000MW emergency power (depending on whom you read) but electricity expert and national planning commissioner Anton Eberhardt regularly updates his power clock on Twitter: “Minister @GwedeMantashe1 failed today to gazette his Sec34 determination to procure 11,800MW IRP planned power 50 days since NERSA concurrence, 7 months since draft determination, 11 months since IRP gazetted, 17 months already as Energy Minister, 20 months after stage 6 power cuts,” he tweeted last week.

Mantashe hates this stuff and blames officialdom for the slow pace of getting new power, green or not green, onto the grid. But there are few signs that he is trying to shortcut the way to success.

He used to complain that Nersa was taking its time issuing a necessary concurrence with his decision to procure more power. But, as Eberhardt says, Nersa has indeed concurred. Here’s proof:

Literally two and a half months later, someone told Eskom the news and it put out this helpful statement:

What is happening here? It is basically bureaucratic treacle and ministers seem unable to clear it. Now Ramaphosa (and, presumably, Mantashe) are committed after talks on a recovery plan at Nedlac to opening a new bidding window for renewable power by January next year. There is every reason, given past and current performance, that this deadline will be missed.

Hilary Joffe, writing in her always excellent column in the business section of the Sunday Times this weekend, says: “Business and labour have often managed to find consensus, but the government’s lack of capacity and general defensiveness have often been problematic. One suspects some of that in this process.

“The measures detailed in the Nedlac plan are not necessarily quick fixes. What investors, business and households urgently seek, however, are clear signs that the government is willing to take urgent action to kick-start a recovery. If Ramaphosa goes with the Nedlac plan, and we see the communications minister and regulator release spectrum on deadline and the energy minister and regulator sign new renewable energy rules on deadline, those would be exactly the confidence boosters needed.

“But will he go with it? This is the second issue. Other social partners may be compacting but Ramaphosa, it seems, is not. The government, business, labour and community agreed at Nedlac on the plan, as requested. What should then have happened is that the president should have announced it forthwith, so the partners could go straight ahead and implement. Instead, he is treating it as just another input to another plan that the cabinet will come up with on some as yet unnamed date in coming weeks. It is disappointing, at best.”

That’s putting it mildly. After all the work all the Nedlac parties put into their attempt to steer us out of our economic graveyard, their deals have to go to an ANC cabinet for approval and manipulation. What a dreadful fate. As journalist and political scientist RW Johnson is fond of saying, you can have an ANC in political power or you can have a competitive industrial economy in SA but you can’t have both.

Obviously Ramaphosa is obliged to take an economic recovery plan to his cabinet for discussion but he should, as Joffe has suggested, have announced it first and then taken it to cabinet. Sadly, that’s not possible. The president is hostage to and leader of the ANC at the same time, as Steinberg explained.

What suffers is reform. Take telecommunications. On the face of it there’s a commitment by Ramaphosa and finance minister Tito Mboweni that new digital spectrum will be auctioned off early next year in a bid to lower data costs and get a better-connected economy as a result. The auction should be taking place now but Ramaphosa’s communications minister, Stella Ndabeni-Abrahams, is not the brightest bulb in the chandelier and missed her deadline. Hence early next year.

But wait! Possibly not. Here we go again. TechCentral’s Duncan McLeod published this story early last week after speaking to the actual person at the department of communications who has to get the licensing and auction done – acting director-general Nomvuyiso Batyi. “How,” she asks, not unreasonably, “do you license something that is not available?”

You hope for the best, I suspect. But when it comes to the department concerned you really have to worry. News is that the Post Office may not be able to pay employees this month. It has already asked the state for a R7bn bailout but I have it on pretty good authority that it needs R13bn. As the minister and the boards fight about authority and positions, the fact is the Post Office has gone from break-even to R13bn in the red inside a year.

How is that even possible? Well, for a start, a new board appointed by Ndabeni-Abrahams is reliably reported to have met every day for nearly two months after its appointment late last year, wiping out budgeted board fees for a start, firing the management and installing inexperienced newbies.

No reform there either then, which is just about enough until you land on the continuing death spiral of SAA. It is hard to believe but, through the department of public enterprises and its minister, Pravin Gordhan, the government is now committed to finding a new, and extra, R10.5bn for the airline so that it can pay redundancies and reinvent itself as a new corporation after nearly a year of business rescue.

If Ramaphosa concedes (and the word is that he already has, siding with Gordhan rather than with Mboweni and the Treasury) then in my view his reform gig is done. He sent Mboweni off to the International Monetary Fund a few months ago to raise R74bn during the height of the Covid wave here. Promises were made, including this one in a letter signed by Mboweni and Reserve Bank governor Lesetja Kganyago:

“The supplementary budget review submitted to parliament on June 24, 2020 sought approval of the Covid-19 relief package,” the letter reads. “This budget presented a medium-term stabilisation scenario that will be the basis for the October Medium-Term Budget Policy Statement (MTBPS) baseline projections. This scenario reflects our decision to implement the needed measures to achieve debt stabilisation. To this end not only will the temporary relief measures be phased out as the pandemic wanes, but some of the expenditure cuts implemented to make room for the relief measures will either become permanent or be replaced by other cuts.”

And this: “From FY2021/2022 onwards, once the impact of the pandemic subsides, we will take action to reverse the upward trajectory of the public debt-to-GDP ratio. To facilitate this effort, we are open to introducing a debt ceiling in addition to the nominal spending ceiling currently in place.”

But first, we’d appreciate you not minding if we slip SAA, our serially bankrupt national airline, some of the money you’re lending us. That’s going to go down really well. And imagine how the court case around the state declining to pay public sector unions the third tranche of their long-agreed increase this year is going to go. Claiming you have no money isn’t going to cut it.

Obviously the panic stations decision is to pay SAA the money and to try to find the cuts inside the state. But what and where do you cut? Already, simply by promising the IMF he would halt the slide in our sovereign debt-to-GDP ratio at 87.4%, Mboweni implies he can cut R230bn out of actual, current, government programmes over the next three years. Many people see it going beyond 100% and doubt the minister’s ability to put the brakes on. As the SAA example shows.

Where does he find those cuts? Which minister is going to roll over and allow the already widely despised Treasury to run off with all their money? None will. It will be a fight and if Mboweni doesn’t know it now he will after the SAA payment is made – he cannot hold the course of reform and Ramaphosa cannot hold his cabinet.

Add the R105bn for SAA to R230bn in spending cuts required to get to the debt target and then add R160bn in public sector wage cuts Mboweni is also committed to and then add the R250bn of Eskom debt that someone (probably the PIC) has to buy and convert into equity and you get an idea of the calamity Ramaphosa the reformer is facing. None of those numbers includes any of the state-owned companies the ANC has run into the ground since coming into government.

We are a sorry sight but if you’re paid to watch, it’s energising. Here, with all of his experience blazing, is Lukanyo Mnyanda, the editor of Business Day, in his column on Monday, and, in the same newspaper, the peerless Stuart Theobald.

As he says, it’s a mess. There is a real chance that SAA could get its money, burn it and then have to ask for more. ANC governments have just not learnt how to say no. They love the goodies. There’s nothing in the unfolding SAA saga to suggest this moment may be a turning point.