Fantastic. President Cyril Ramaphosa has unveiled his economic recovery plan. Don’t get too excited, though. Economic recovery plans are a dime a dozen in SA. Remember the New Growth Path? Or the National Development Plan? Exactly.
It’s also great that finance minister Tito Mboweni has been saying all the right things about fixing government finances in the run-up to his medium-term budget policy statement next week. Don’t get too excited about that, either. The ANC, the party that Ramaphosa and Mboweni lead, might trip them up.
Ramaphosa and Mboweni seem aware of the real and urgent challenges we face. Our people are hungry and unemployed, our government is broke and seriously indebted, and we do not seem able to implement plans to stop the decline.
The latest job figures, at more than 10-million adults unemployed, are possibly the worst in the world. Our inequality gap — for years the world’s worst — has widened. Government finances are a fiasco. By 2030, we will be one of the most indebted nations. We are in a deep funk, a huge crisis. We cannot continue as we have always done. Every economic plan has put us deeper into the hole we’ve dug for ourselves. It’s time do things differently, not just write a fresh chapter.
Take the civil service, for example. This government has been pouring money into the pockets of civil servants for 12 years. More than half of our revenues go towards paying civil servants. Why not moderate the yearly increases?
Soon we will be forced to go back to the IMF for another loan
The answer is simple. The ANC wants to keep civil servants happy. How long? Until the country is bankrupt? It cannot go on like this. Take the state-owned enterprises. Why keep pouring billions into SAA? Or Denel? Sell them. Start afresh. Why aren’t we selling them? Because the ANC and the government are afraid of the trade unions and are married to the belief that the government is a driver of investment. The billions being guzzled by Transnet, Denel, the Post Office, SAA and others are not investments. They are wasteful expenditure.
So, what’s holding things up? It’s not South Africans. It’s the ANC. It is trapped in its own entanglements. It does not know how to wipe the slate clean. It is too tethered to its past. First, it is still riven by divisions. The Zuma faction, under fire and afraid of jail, is using policy to fight against the reformist wing of the ANC led by Ramaphosa. They will not stop. Think about just last week, when the news broke that the Hawks may be after party secretary-general Ace Magashule. A whole network of the party went into overdrive on Twitter and other social media platforms, claiming that this was a conspiracy by white monopoly capital and its lackeys (this name-calling is how they try to denigrate Ramaphosa).
So the battle to turn the economy around through responsive, people-centred policies gets hijacked by those who are defending the corrupt among ANC leaders. There is no such thing as radical economic transformation as espoused by Magashule and Jacob Zuma. It’s a shield they use to deflect from their failure to turn this economy around and their well-documented corruption.
Ramaphosa and those reformists around him know this well. The problem is, of course, that they are married to the idea of "unity of the movement". The reformists fear that if they tell Zuma, Magashule and Co to jump in a lake, they’ll walk away. They won’t. If they do, they become the leaders of ... what?
Government inaction has consequences. We see them every single day that goes by without decisive action from the Union Buildings and Luthuli House. Society and the economy are fraying. The government’s financial situation is getting worse. Soon we will be forced to go back to the IMF for another loan. Our debt situation worsens. Business confidence stays in the doldrums. Unemployment, poverty, inequality get worse.
The only way out of this is for the cabinet to urgently implement these policies while breaking off the party’s entanglements with its allies and its factions. We are sinking.
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