Does anyone have the slightest idea what is going on? On Thursday President Cyril Ramaphosa presents his economic recovery programme to parliament, a first — but never final — exposition of his plan to return SA to a path of economic growth, and also to present his credentials as a reformer.
Just a few days ago though there was the most awful kerfuffle. The presidential economic advisory council, appointed a year ago, produced a 122-page report urging Ramaphosa to freeze the public sector wage bill, but not necessarily cut back on pro-poor government programmes as was initially planned to meet finance minister Tito Mboweni’s tough 87% debt-to-GDP ceiling in two years’ time.
Then it emerged that Mboweni had requested extra time to prepare for his medium-term budget policy statement. It was going to be October 21 and has now been moved back a week. Why? The timing of the advisory council report seems impeccable.
At the same time the Ramaphosa, or reformist, faction in the ANC suddenly found its voice, buoyed by a flurry of corruption-related arrests earlier in the month, and began to fling open insults at Jacob Zuma acolyte and ANC secretary-general Ace Magashule. It isn’t just transport minister Fikile Mbalula, though his tweet a few days ago to the effect that “Karl Niehaus is a well known thug employed by Magashule at luthuli house” [sic] will become a classic. A week earlier police minister Bheki Cele was having a go all of his own at Magashule.
Video on social media shows Cele at an ANC event regaling a cheering, laughing crowd with a story about Magashule and the Gupta brothers. “There’s this one chap who says he was introduced to the Guptas by the ANC,” Cele says from a podium. “Then it emerges this chap is the SG of the ANC. Hawu! Hawu! I’ve never met someone whom the ANC introduced to the Guptas. The other day I asked a close friend of the Guptas how come I’ve never had a call from the Guptas. However Ace Magashule — your SG — he says he was introduced by the ANC!”
Hilarity ensues. Cele is not the most attractive politician in the country but his antipathy to Zuma, and now Magashule, is good to watch. Whatever he or Mbalula feel about Ramaphosa is beside the point. They have picked up courage from recent arrests and the president’s casual dismissal of a threatening open letter Zuma wrote attacking Ramaphosa ahead of the ANC’s last national executive meeting.
To all intents and purposes the Zuma faction no longer exists. It has been replaced by a radical economic transformation lobby, but that too is increasingly ragtag and fragile. Ramaphosa is on top of his politics and the enemy (in his own party) is in retreat. We will find out when he starts talking to parliament about recovery and reform whether he is on top of policy as well.
There are different views about the delay Mboweni has sought. Some argue the economics has become more difficult. They point to a failed effort to secure a $2bn loan from the World Bank, an addition to the $4.3bn the Treasury raised from the IMF in July.
Others suggest the delay might be needed to accommodate advice from the economic advisory council. Others say the delay isn’t about fiscal policy or money but about principle, which would be quite something.
But it is just possible Ramaphosa may use his address to burnish his reformist ambitions. While continuing efforts to keep SAA alive muddy the picture Ramaphosa wants international markets to see, my guess is that he is prepared to let it go if his ally and public enterprises minister Pravin Gordhan can’t raise the financing the grounded and bankrupt airline needs to survive until January.
If it doesn’t work it would be a load off the presidential shoulder. Intellidex economist Peter Attard Montalto speculated this week that while Mboweni might indeed take the precaution to budget for the R10.5bn Gordhan says SAA needs to restart as a new business, he might equally calculate that the attempt to get back in the air will collapse and the money would then sit as a saving to be paraded to the markets as fiscal virtue in action.
But what we just might witness on Thursday is Ramaphosa casting caution to the wind and announcing a meaningful opening of the economy, particularly in communications and in the energy market, making it much easier for industry to generate power for itself.
That would be real reform, building on the quiet but skilful detoxification of the land expropriation debate with a new bill that makes clear and reasonable parameters for expropriation without compensation and a new communications white paper that proposes sweeping and welcome changes to cumbersome foreign investment and cross-ownership rules in broadcast media.
If there’s more to add we will know in a few hours. Ramaphosa has nothing to lose by opening up this economy. He is no entrepreneur, but he instinctively understands the limits of the state. Sadly, to our cost, he prefers to rely on his party colleagues to find out the truth the hard way.
• Bruce is a former editor of Business Day and the Financial Mail.
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