So in the end it was a little more than 100 people at the ANC’s national lekgotla who decided that the rest of us must put another R10bn-R20bn into SAA.
There are many dimensions to the national airline story and a precipitous collapse would not be a good thing. But how it will be restructured, what it will cost, the extent to which it is downscaled, and the potential for its ultimate disposal — which must surely be the end game — is essential information that must inform decision-making.
That a collection of ANC politicians, few with any specialised knowledge of either aviation or government finances, is the final authority on a micro decision that has a direct effect on the budget, shows how far SA has strayed from the days when the Treasury had a firm hand on the public finances.
While the Treasury’s approach to financial management frustrated many in government and among the ANC allies, the great advantage of technocratic capacity at the Treasury was that pet projects and programmes could not easily be funded on political whim.
Today, though, it is not only Treasury’s influence over the rest of the government that has waned, but also the influence and credibility of the small group of ANC leaders who since 1990 have guided economic policy on a macroeconomic level through the party’s internal debates, ensuring that at the end of the day, no matter the political noise, prudent and predictable policy held sway.
The diminished capacity of the ANC to manage the various interests within is even starker on the land expropriation question. Since that evening in 2018, also after an ANC national executive committee meeting, when President Cyril Ramaphosa announced that the governing party would take steps to change the constitution to include expropriation without compensation, he has been assuring the country that he has the matter in hand.
Expropriation without compensation, he said, would be done only in specific circumstances and would be carefully managed so that food security, investor sentiment and the stability of the financial sector were not adversely affected.
What followed was a carefully managed process under the auspices of the national executive committee in which Ronald Lamola and Jeremy Cronin crafted a new expropriation bill and laid the groundwork for a constitutional amendment that at least some existing investors could find a way of living with.
That carefully managed process is now in tatters with a resolution from the national executive committee that expropriation without compensation decisions will be made by politicians, a category of people who, though fairly elected, are universally not trusted to act with impartiality.
Ramaphosa has privately said he is not unduly fazed by the development, believing the ANC will be constrained in the end by legal restrictions. He believes, it seems, that it is possible for the ANC to agree to one set of things on paper, while on a nod and wink from him the market will be reassured that everything is still being managed, like it used to be before.
On a more fundamental level, the simultaneous waning of the influence of the Treasury and the diminishing influence of the ANC elite on economic policy and government decisions have profound implications for the durability of the political compact of 1994. That arrangement, in which the existing wealth of the old establishment remained more or less intact, with the benefits shared with the new elite, has lost credibility.
While the poor benefited — fewer people live in absolute poverty now than in 1994 — the gains have not been anywhere near enough. The same is true within the political elite. The gains have been more substantial, but nowhere near enough. The economy has not grown fast enough for there to be enough lift-off, which is leading to the conclusion among the political elite that the best way to extract more wealth from the private sector is to squeeze it harder.
In a similar fashion to the way the decision to retain SAA as a “national carrier” was made at the ANC lekgotla without reference to the costs or trade-offs, the overwhelming tendency to strengthen the hand of the state in regulation is made without reference to any knowledge, or even the theory of what makes an economy grow, or how the general prosperity of the country could improve.
An environment in which the political elite are economically illiterate and without the necessary facts, and yet have an ever stronger grip on economic management, is one that in the end will not work in anyone’s favour.
• Paton is editor at large
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