A great deal, perhaps everything, hinges on who Cyril Ramaphosa appoints to his next cabinet. While being wary of the SA tendency to predict Armageddon at every political set back, it does seem evident that unless the capability of government is improved dramatically the slide into economic and social dysfunction will be inexorable. This may be the last opportunity for a long time to turn things around.
While all cabinet portfolios are important, the most difficult to fill are the economic portfolios. Tito Mboweni has made it pretty clear that he won’t be around for cabinet duty after May. In remarks he made at his economics colloquium he said as much and, in his brief tenure so far at the head of the treasury, his lack of interest in important things like the budget has been astounding.
While Mboweni’s contrary tweets about Afrikaans universities and his candid opinions on SA Airways have been a gulp of fresh air, his tendency to arrive late or not at all to public events and his outspoken disregard for treasury officials, has become the talk of the town. We will be lucky if he lasts until the election.
Good finance ministers, though, are not easy to come by. SA Reserve Bank governor Lesetja Kganyago turned down the job in October, as did Mcebisi Jonas. Some of the other possibilities with experience in the finance portfolio from inside the ANC may have not-so-small skeletons that could emerge. Others are happily ensconced in the business world. Perhaps pressure can persuade someone like Jabu Moleketi, a former deputy finance minister, to come back.
While Ramaphosa is entitled in terms of the constitution to appoint two cabinet ministers who are not members of parliament, it will be difficult for an outsider – for instance, a banker or CEO – to step into the finance ministry in this political environment. A finance minister without political heft is somewhat useless in government. And the factions in the ANC will eat him or her for breakfast.
Then there is the problem of trade and industry. The DTI is a big and important department that has largely failed to perform for the past 10 years. One reason for this is that while the department makes plans intended to encourage business activity but has little ability to drive them through. Localisation of production, for example, is a sensible strategy to promote industrialisation but it has been mostly ignored due to corruption and other failures.
A second reason for its underperformance has quite frankly been its political leadership. For a department of trade & industry to encourage business activity and investment it is important that it has a working relationship, and not just a political relationship, with business.
Just as we have a department of labour to protect the rights of workers, their mindset should be that they are the department of business. That has not been the case with Rob Davies at the helm. Davies distrusts business and has done little to build the kind of working relationship in which problems can be jointly solved. Ebrahim Patel, who is perplexingly being talked about as the next minister once the smaller economic departments – small business and economic development – are collapsed back into the DTI, would have similar constraints.
As much as Patel is a hard worker and a competent person - although by all reports completely impossible to work with - he will not do a good job heading up a department of business.
Frustration with the DTI has led business to take the lead in developing sector plans itself. The Public-Private Growth Initiative was initiated last year by Toyota Europe CEO Johan van Zyl and the presidency, after Van Zyl had a chance meeting with Nkosaza Dlamini-Zuma on a plane. Former constitutional negotiator Roelf Meyer and former Gibs Business School dean Nick Binedell are driving the process.
Van Zyl has also been the quiet force behind the Automotive Incentive Scheme, SA’s most successful sector plan. The initiative has drawn together CEOs in 19 sectors so far. Some of these will present their plans to the Business Unity SA economic indaba on Tuesday.
A business-led sector approach to sector economic growth has the ability to breath life into the DTI’s countless iterations of the Industrial Policy Action Plan. It can build on this initiative or it can kill it. A quick way of doing that would be to weigh it down with the procedures, provisos and conditions of which government’s economic departments are so terribly fond.
Everyone wants SA to work, especially those people who have invested their money in this economy. These people are called business, and because their activities create jobs, government - while protecting the rights of workers and the environment - needs quite urgently to get to like them.
• Paton is writer-at-large.
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