President Cyril Ramaphosa’s state of the nation speech was not that bad. But it’s hard to recall one that has been so universally panned. No-one liked it, even though it made some concessions that should have won praise: the extension of the R350 grant; the extension of the Unemployment Insurance Fund (UIF) benefit to businesses that were closed by the lockdown; a promise to continue with public employment programmes; and a fairly bold commitment to opening up competition in the electricity market.
The problems are underlying ones: credibility and time. Many constituencies, especially the two most influential — organised business and organised labour — back Ramaphosa and want him to succeed. The problem is they are beginning to doubt that he can. It is also taking too long to get anything done, with the result that the impact of changes is diluted and they lose the impetus they could have had.
Sadly, the punt he gave in the speech on infrastructure as the engine of growth is not believable. Nor is the investment drive he said has so far secured R750bn in commitments. Neither of these is reflected in economic data. Both private and public investment continue to shrink and no evidence of either is to be seen on the ground.
Business knows that on its basic hit list of things that can and must be done — electricity liberalisation; release of broadband spectrum; private concessions of freight rail — he is lagging far behind. A slow, piecemeal approach to these things will set SA back on its path to low potential growth and won’t bring significant lift-off.
Labour knows conditions are tough for its members. Retrenchments and job losses have been relentless. There is no sign of reversal. Public sector workers, who have fared the best for a number of years, even over the lockdown, are also gatvol. When Ramaphosa says “the government has no money” what they see is a bloated cabinet, fat ministerial salaries and millions blown in procurement corruption.
So while they still extend their support, and would probably back him in an election tomorrow considering the lack of alternatives, neither business nor labour is fully invested in his project. Business is not investing and labour is not kindly disposed towards a pact that could assist him in his endeavour to restructure government finances and set them on a more balanced wicket.
It has been said before, over and over: what is needed is a single-minded focus on driving growth. Over the past year Ramaphosa has put one of the building blocks of success in place, establishing a delivery unit in his office, which now — through finance minister Tito Mboweni’s Project Vulindlela — has a counterpart in the Treasury.
The aim of the unit is to unblock problems: the scarce skills list, an essential facilitator of skilled immigration, is one of its successes. So are the changes to the visa regime, and so was the extremely hard-won business victory to extend the threshold of licence exemptions for self-generation from 1MW to something not yet defined but higher.
It should not be the case that Ramaphosa must set his pack dogs on his ministers and their departments, but if that is what it takes to get things done, he should do it more. His cabinet is a big impediment to the growth project. It is time he took it in hand. With ANC secretary-general Ace Magashule out of the way he may have a freer hand. There are many in it who don’t share his objectives and are side-tracked and caught up by the lobbies that press on them. Energy and telecoms have been mismanaged. While we have reached some milestones at last, the future should not be left to chance.
Overdue for a reshuffle, unfortunately, is one of my favourite personalities: the cooking, tweeting Mboweni. He has been excellent at putting down the populists and asserting the place of basic good sense economics and public finance. But he is, to say the least, distracted. The Treasury is under enormous pressure and is floundering without a fighting minister. Ramaphosa needs a fully engaged partner in the Treasury to give him the support he needs to push through what are going to be a very difficult few years.
While things are bad, they could be made a whole lot better by setting one eye on the GDP growth barometer and the other on the clock. With a general election almost four years away, SA needs Ramaphosa to succeed: we do not have enough time to wait it out for a change in the ANC or in government. With every year of stagnation the country’s asset base weakens further, unemployment grows and the average wealth of the population declines.
• Paton is editor at large.
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