By my reckoning President Cyril Ramaphosa has until Saturday to deliver the new, improved and much more determined social compact for growth, inclusivity and general national cheerfulness that he promised at his state of the nation speech in Cape Town on February 10.
I cannot find anyone of any import who has since then been invited by the president to talk about this important issue — compacting — which he places at the heart of our economic recovery. It may be because I’m including weekends and public holidays, and the truer count would still give him two or three working weeks to pull it off, but I think we all know by now it isn’t going to happen.
Searching for answers, I turned to the last time the president promised a social compact. It was in the middle of the pandemic, the launch of the SA Economic Reconstruction & Recovery Plan (ERRP) of October 2020. I remember business, more than any other partner, put huge effort into producing a report of how it believed the post-Covid economy could rise again.
Its input was largely ignored, to be replaced by the usual ANC ritual about poverty, inequality and unemployment. Here’s an excerpt from the ERRP: “The implementation [of the plan] and its impact shall be evaluated annually and where necessary adjustments shall be made in pursuit of National Development Plan; Vision 2030, which aims to: grow the economy at a rate of 5.4%; reduce the unemployment rate to 6%; increasing investment as a share of GDP to 30%; reducing inequality as measured by the Gini coefficient to 0.6; and total eradication of poverty.”
Yah right. Unemployment at 6% in the next eight years was a distinct possibility until Covid. The total eradication of poverty as well. “Overall,” the ERRP authors determined, “the success of implementation will be measured against changes in the following variables: competitiveness rating, investment attraction, employment creation, GDP growth, inequality and poverty reduction.”
You can see why there’s no new compact in the works. What’s the point of compacting if your contribution is ignored? How would a new compact differ from the old if all the same actors are involved?
Business may be the biggest employer about, but it is bullied daily by former trade unionist Ebrahim Patel, who Ramaphosa has essentially put in charge of the future of our economy.
Patel is extremely smart and totally straight. More than any other his department — trade, industry & competition — makes the daily rules by which we function. But he looks at the economy through the prism of jobs and not returns on investment and thus constantly comes up with the wrong policies.
Thus is Ramaphosa trapped. He’s on repeat. Watching him make the same promises again and again is a little like realising that inside the washing machine, sticking out of your jeans pocket, is your new passport. Oh, the horror.
I’ve just opened a copy of the hot-off-the-press Agriculture & Agro-Processing Master Plan “social compact” and it’s the same thing all over again. There’s nothing much this “plan” can do for farming. SA farmers are already among the best in the world. We are indeed the world’s second-biggest citrus exporter, something achieved entirely without the help of the state or a master plan. How excited farmers must be.
No-one escapes Patel. Everything needs a plan because the plan is the tool he uses to enforce compliance with all those flowery promises CEOs make while they’re distracted from managing their incentive schemes.
And like anything put together by a committee, the report goes nowhere new: “Social partners,” it says “believe that if the government proceeds with implementing this master plan and works closely with social partners in realising the outcomes, the sector would grow but in a way that supports inclusive value chains, creates jobs and upholds farmworker rights. As social partners, we are also committed to diversifying export markets and ensuring the sector stays on the cutting edge of technological advancements globally while adhering to the growing demand for sustainable production.”
In other words, Patel (the government) will “work closely ... in realising the outcomes”. Or, compliance is not negotiable. You will do as you’re told. And the report feels hopelessly optimistic. “The following outcomes can be achieved if the proposed interventions and goals are implemented effectively,” it says. “To achieve R32bn real growth in agriculture value added above the business-as-usual baseline; maintaining 865,000 primary and 263,000 secondary agriculture jobs and creating 72,000 new decent jobs; to enhance food security and support 303,000 livelihoods.”
Promises, promises. Patel has held sway over economic policy for more than a decade and has got nowhere. The report says it was “facilitated” by Mzukisi Qobo, a fine economist who once co-authored a book called The Fall of the ANC. One can only hope this latest work speeds up the prophecy of his book. Our thinking has become so predictable and stale. A government on its toes would look entirely different, particularly as inflation begins to bite and prices rise.
The Mexican government has just decreed the lifting of all duties on imports of chicken meat and table eggs from all countries for one year, starting immediately. It is doing that to keep those essentials affordable. What will Cyril do for our poor?
• Bruce is a former editor of Business Day and the Financial Mail.
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