President Cyril Ramaphosa may be watching with amusement as some of his partners in the government of national unity (GNU), particularly the DA, fret and curse in the wake of him having signed into life a new Expropriation Act.
Ramaphosa seems to have a finely developed sense of just how elastic the DA’s red lines actually are.
In truth, the only thing he need really worry about as he works to satisfy his own insatiable party and keep the DA inside the GNU, is which version of the National Health Insurance laws he has already signed he eventually ends up with.
He signed it before last May’s election, but it didn’t do him much good. If he is going to remove private medical aids, the DA will have no choice but to leave the coalition.
A far bigger worry for Ramaphosa ought to be easily the most chilling warning I have ever heard about the future of our struggling economy.
It came last Thursday from Andrew Kirby, the CEO of Toyota in SA, who warned that despite the thousands of hours of time and hundreds of millions of rand thrown at dreams of a new, black-led wave of industrialisation, the deindustrialisation of this country is, if anything, speeding up.
In manufacturing here, Kirby is a big deal.
He could walk into many better jobs at Toyota if he wanted to, and I doubt if Toyota had to make an Africa investment decision again it would choose SA, perhaps especially not KwaZulu-Natal.
Kirby told a conference in Joburg that since the introduction of the latest motor industry production and development programme, the Automotive Master Plan, by former trade, industry & competition minister Ebrahim Patel in 2021, the share of local components in SA-made cars has fallen, not risen.
It is worth appreciating that while the role of the auto industry in this country may be primarily to extract the huge subsidies the state pays big global brands to manufacture in SA, the government doing the paying is utterly blind to the wider chaos it is causing in industry.
I doubt it really cares. What matters is milking what’s left.
Manufacturing policy has been left in the hands of ideologues who have been able to sell to a largely ignorant ANC the notion that they are able not only to grow this economy but to transform it — racially, not technologically or strategically — and grow it at the same time. That they can perfectly describe and control the entire complexity of production and enterprise in a still large economy.
There is no serious growth plan, and no-one asks the right questions inside the ANC. A rational state, even one with our past, would chase growth as its highest priority.
At the department of trade, industry & competition, minister after minister has tinkered and planned and convened and legislated policies that claim to do both, and not once have they been even nearly right.
They try to enforce transformation, and when the growth doesn’t follow their answer is almost always more transformation or, as Ramaphosa endlessly repeats, “inclusive growth”.
For a while the new minister, Parks Tau, looked as if he might break with the past and perhaps shift our focus from blanket “localisation” of everything from wedding gowns to solar panels, to driving exports of what we already produce well far harder. But in the past week he has revealed himself as just another transformer, suggesting companies pay 3% of their post-tax profits into a new R100bn Transformation Fund.
The investment case for SA was already in the ICU before Tau floated his mad idea, but he may now have sunk it completely. People who think more BEE is a good idea forget that the Industrial Development Corporation (IDC), which delivers billions of rand a year to programmes that support BEE, is itself funded by the dividends from investments in private sector firms.
Tau should certainly know — the IDC reports directly to him.
He needs more than the IDC can provide though, because the ANC uses industrial policy to feed an emerging elite rather than to attract the investment that would create jobs and feed more people.
So jealously does the party hold onto the department that it specifically excluded the possibility of a DA minister taking the job after the election. Even now, eight months later, Tau has not delegated any policy oversight to Andrew Whitfield, his DA deputy.
The minister has just formed an industrial advisory council which, if the president’s economic advisory council is any guide, he will meet and then ignore.
Some R14bn of IDC money has flowed into the mini-mills that have collapsed the ArcelorMittal SA (Amsa) long products business here.
Just to illustrate how insane industrial policy is, while we protected Amsa’s flat steels business with highly inflationary duties on flat steel imports, we simultaneously forced scrap merchants to sell cheap scrap to the mini-mills and broke Amsa’s long products division.
All in the interests of allowing the ANC to say: “Well, we can do it too, just like the Afrikaners did”. Except they can’t. It’s 100 years on. Costs are higher, labour’s protected and the ANC government is irretrievably incompetent in matters of the creation of wealth. Without the right productivity-enhancing fixed investment we desperately need, we cannot ever grow.
There is no obvious introspection in the state. Why does an Automotive Master Plan precede a fall in auto sector localisation?
Why, a few years after the publication of a Steel Masterplan, does the country’s biggest steelmaker shut half of its business? What is being done over and over again that is so toxic? To what probing question about our industrial policy is the bog standard answer inside the department always “do more of the same”?
There is no serious growth plan, and no-one asks the right questions inside the ANC. A rational state, even one with our past, would chase growth as its highest priority.
Transformation is inevitable anyway, but growth isn’t and the more we don’t act on it the longer transformation will take.
• Bruce is a former editor of Business Day and the Financial Mail.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.