Deputy finance minister David Masondo posted a bunch of lovely pictures on social media on Sunday. In the pictures Masondo is seen alongside finance minister Enoch Godongwana, director-general of the National Treasury Duncan Pieterse and Reserve Bank communications chief Thoraya Pandy. They are on a walkabout through the Cape Town International Convention Centre, venue of the G20 finance ministers and central bank governors meeting, which is taking place this week.
Nowhere in the pictures do you see Ashor Sarupen, the other deputy minister of finance. Look, it could be that he was there. The centre is a huge venue. It could be that he was checking out the other side of the place. Or that he is on other manoeuvres.
Whatever the reason, I suspect that he isn’t really seen as part of the team by the minister, Masondo, or a large chunk of the National Treasury.
Sarupen’s absence in the discussions and planning for the budget over the past month illustrates two pivotal things that will lead to the deterioration or even the wrecking of our economy if they are not fixed urgently.
The first, and obvious, one is that the ANC still thinks it is running the government by itself. The nine other members of the GNU are seen as just a hindrance. The second, and more important, one is that the DA and the ANC, the two principals in the GNU, still have no unified plan to turn the economic fortunes of this country around.
From the outset the two parties have known that they disagree — perhaps not fundamentally, but deeply — on the running of the economy.
The ANC sees business and consumers as a piggy bank, there to be taxed and mugged when opportunity allows. The idea of growing the economy seems to spring to mind only after other expressions occur, namely “business needs to come to the party”, “tax hike” and, inevitably, “public sector wage increase”. The DA, on the other hand, seems to still think “a rising tide lifts all boats” even when it’s clear that in this country it is not necessarily true.
The unprecedented, deeply damaging postponement of the budget speech last week will happen again and again unless the ANC acknowledges that it now governs within a coalition. The day it acknowledges that, it will sit down with the DA and everyone else and begin to hammer out a transparent and consensual philosophy for how we grow the economy and make our people’s lives better.
It is, quite frankly, extraordinary that the ANC, a supposedly pro-poor party whose finance minister once led the National Union of Metalworkers of South Africa, possibly the most left-wing trade union in the country, could even consider raising VAT from 15% to 17%.
Just eight months ago this experiment was tried in Kenya. The country exploded when the government tried to increase revenues from citizens who were already grappling with the high cost of living and who had had enough of government corruption. In Liberia in 2023 the president, football legend George Weah, lost elections because he failed to ease the country’s cost of living crisis and stop endemic corruption.
But really, you don’t need to go that far. Botswana, just next door, is an example of what happens when the economy is mismanaged. The Botswana Democratic Party was walloped at the polls — after enjoying power for 58 years — because the economy was mismanaged and corruption was seemingly on the increase.
It does not need a genius to realise that a VAT hike from 15% to 17% would have been disaster for South Africa’s poorest.
For 17 years now, on the pages of the FM and elsewhere, we have talked about growing the economy in South Africa. We beg, we propose, but the ANC never really listens to anyone. Every few years civil servants get a huge increase, the government takes more from taxpayers, we get deeper into debt (we’ve gone from debt-to-GDP of 24% in 2008 to 75% today), and we pretend everything is fine.
It is decidedly not.
The ANC has failed on the economy. It might not like it, but the DA and eight other parties are its partners now. These entities and their leaders need to agree on what they stand for and flesh this out with concrete, transparent action plans. If this happens, a budget will be easy to develop and adopt.
For 17 years now, on the pages of the FM and elsewhere, we have talked about growing the economy in South Africa. We beg, we propose, but the ANC never really listens to anyone
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