The indecisiveness that has come to characterise President Cyril Ramaphosa and his administration was on show again this week after a crucial cabinet meeting, meant to come up with workable solutions to the economic fallout of the battle to curb the spread of Covid-19, came to naught.
The cabinet met on Wednesday after Ramaphosa announced two weeks ago that it would have a full discussion to come up with an economic recovery plan. Yet later that evening a statement issued on behalf of the executive contained no such plan. All the president and his ministers could tell the nation is that they talked about having more talks.
The cabinet said that it had received five presentations from the various clusters, and that these presentations were a culmination of the work done by each ministerial cluster focusing on the recovery plan as a consequence of Covid-19 and the recent downgrade by ratings agencies.
On top of all of this, the cabinet said it had directed public enterprises minister Pravin Gordhan to prepare a report on the ailing state-owned SAA, for discussion at the next meeting. Thereafter it would finalise the economic recovery plan.
The government informed the SAA business rescue practitioners this week that it is unable to provide the airline with further funding and refused their request to raise funding for the airline in foreign capital markets. The airline is unable to raise further funding in domestic markets and owes significant debt to a consortium of local banks.
SA Express, another failing state-owned airline, is already on the ropes. The business rescue practitioners there have applied to the court to have it liquidated, but it is still not clear if the government is going to oppose this application.
It seems bizarre that at a time like this the government is still paying any attention and expending energy on what has been called a vanity project. SAA should be the least of the cabinet’s worries.
The conclusion of Wednesday’s meeting was: “Cabinet resolved that further discussions and consultations are still required before the final consolidated plan is approved to be shared with the nation.”
According to the statement, all cabinet clusters were asked to work together to produce one consolidated document on key priorities of the recovery plan, which is to be completed by Monday, when the executive is expected to meet again. If the plan was not complete on Wednesday and more talks are needed, can we really expect it to be done in five days?
The government’s initial response to the Covid-19 crisis was admirable. A clear, concise decision about putting the country into a 21-day national lockdown was taken and communicated by Ramaphosa. There was praise for his handling of the situation and uncharacteristically quick decision-making.
A number of initiatives were announced to help businesses and employees who were going to be without income during the lockdown, but these have landed up being messy and confusing, adding more anxiety than actual relief.
There has been talk about topping up social grants, yet no decision. Then there has been the promise of the distribution of food parcels to those who have not been able to work during the lockdown, but this has not materialised in many areas, leading to protests and the looting of shops, as in Mitchells Plain in Cape Town.
Things are only expected to get worse, especially as we enter the second phase of the lockdown. Last week, as expected, the president addressed the nation, announcing that there would be an extension of the lockdown by another two weeks, taking us to the end of the month and placing extra strain on the economy, which is already struggling to even limp along.
Ramaphosa has emphasised that the government is putting the lives and health of citizens first, even though the economy has taken a massive knock, but has promised that there will be strategies for re-engineering the economy to get it moving forward. But this doesn’t seem to be happening; if anything, we are in a state of paralysis.
Governments and central banks around the world are throwing everything they have — and more — at the crisis, which it is already agreed will cause economic problems far deeper than the 2008-2009 financial crisis. And yet SA just seems to be coasting along.
While the SA Reserve Bank is acting, it is not enough. Interest rates have been cut twice in the space of less than a month, bringing the repo rate down to 4.25%. But this should be compared with a wave of cuts and other stimulus measures by central banks around the world in an attempt to offset the economic damage from the coronavirus pandemic.
This is not the time for indecisiveness; there is no time to sit and ponder and wait for consensus. We need action and we need it now. This is no longer a crisis, it is a disaster, and we have no clear plan for how to get through it.
• Quintal is political editor.
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