2020 is going to be better for SA. It might be only incrementally so, but there are grounds for optimism that things will improve at the margins.
The wheels of government have begun to turn. In the last quarter of 2019 more progress was made in policy reform than over the entire two years of Cyril Ramaphosa’s administration.
Immigration policy was reformed in November to scrap onerous visa requirements for the entry of foreign children into SA, a move that should promote tourism. There is hope that SA will also become an easier place for skilled foreigners to work. A restrictive list of “critical skills” circulated early in 2019 was withdrawn and a new one is expected this year.
Also in November, the process to license high-demand 4G and 5G spectrum took a leap forward with the Independent Communications Authority of SA publishing proposals for these to be licensed.
In the energy sector, a new integrated resource plan was published in October after more than five years of delay, allocating most of the new capacity that will be built to renewable technology. In December, mineral resources and energy minister Gwede Mantashe, admittedly under pressure, also promised to break the policy rules logjam to enable industry, agriculture and other private entities to produce their own electricity, and called for private-sector proposals to fill the energy supply gap.
An initiative by business in partnership with the presidency to draft sector development plans for industry, which focus directly on the interventions businesses need to grow, has taken root
In December, finance minister Tito Mboweni and public service minister Senzo Mchunu had a go at the new ministerial handbook, cutting perks for ministers. Mchunu also held the government’s first meeting with public-sector unions, putting proposals on the table to arrest the growth of the public sector wage bill. Unions and government have begun preparing for what will be a crucial negotiation.
Though yet to manifest in the organisation of Eskom itself, it was a notable achievement that the Eskom policy paper, published in October, committed the government to split up Eskom and outlined the process for establishing an independent transmission systems operator.
An initiative by business in partnership with the presidency to draft sector development plans for industry, which focus directly on the interventions businesses need to grow, has taken root and could provide SA, at last, with an effective industrial policy that promotes organic growth and job creation.
Placing SAA into business rescue — though far too late in the day — was an encouraging sign that the government is facing up its fiscal constraints and acknowledging that it can’t afford to always have its cake and eat it.
The credit ratings downgrade, whether it materialises at the end of March or not, is already largely priced in by the market. While some investment will flow out of SA, other investors will be sure to move in to pick up cheaper equities and bonds.
Many will find that all of this is cold comfort when the big picture for SA remains so bleak. All the trends — GDP growth per capita, unemployment, crime and violence against women and children, and xenophobic tensions are still moving in the wrong direction. What these trends mean in reality is that for the vast majority in SA, life will be harder in 2020.
Growth forecasts for 2020 from all the big institutions are miserable, ranging between 1% and 1,7%. With population growth at 1,6%, this means on average, South Africans will get poorer in 2020.
If that is not enough, SA politics is moribund. The ANC, unable to govern and unable to reform itself, is nevertheless entrenched for the foreseeable future. The DA is escalating racial tension with the fundamentalist zeal with which it is attacking race and identity politics. The EFF has nowhere to go but to up the ante with populist antiwhite and anticapitalist rhetoric. In the context of the failure of the two biggest parties, its message will become more attractive.
It is what it is, and for now those who want SA to work must battle away at the margins. It has all been incredibly slow and frustrating, and the small reforms that have been made have not been significant or fast enough to lift sentiment. But if more resolve to reform is shown by those in power, some economic lift-off may be possible.
For the big picture to change, SA requires an overhaul of its politics. With all three parties locked into their own destructive trajectories, a new form of politics is not something we will see in 2020. We will have to make do.
• Paton is writer-at-large.
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