On Tuesday, the Reserve Bank starts its first policy meeting of 2022.
It does so in the context of an inflation rate that climbed in December to 5.9%, just below the upper end of the 3%-6% target range. As always, in addition to updating its inflation forecasts, the Bank will also give the country an update on its outlook for growth.
Perhaps this will be more important to look out for than a small increase in interest rates that is widely expected by economists and analysts. Confirmation that the country’s economic recovery is stalling should exercise minds. Unemployment is already at catastrophic levels, with about half the adult population without a job.
After the trauma of Covid-19 added to the country’s employment crisis, it would be reasonable for the population to expect that fixing this should be priority No 1. Many have already said that 2022 needs to be the year of action.
Instead, what has the ANC offered? More infighting. And we are a full 11 months away from its elective conference. It is possible that the furore caused by tourism minister Lindiwe Sisulu might have gone away by then. But it should have been dealt with a week ago already.
As reported over the weekend, her attacks on SA’s constitution and the judiciary were deemed by the overwhelming majority of her colleagues in the ANC’s national executive committee to be unacceptable. Comments from Cosatu’s Zingisa Losi were the strongest on the matter.
She rightly questions how the ANC, which was the biggest player in the drafting of the constitution, could tolerate “persons who swore an oath to defend the constitution, running to the media to rubbish the very constitution”. She added that it was “unacceptable and unbecoming for senior leaders and cabinet members to attack the constitution”.
Losi also hit the nail on the head when she said “the failure of the ANC to discipline deployees is feeding a culture of mediocrity”. This is the most important point and is reflected in the shambolic state of the post office, local government that has collapsed, and disappearing train lines, among others too many to list here.
The failure so far by President Cyril Ramaphosa to act against Sisulu risks entrenching that culture of impunity. After his office issued a statement saying he had reprimanded her and she had agreed to retract her comments, she put out her own statement in which she essentially called him a liar.
There is a perception that when Ramaphosa moved Sisulu to the tourism ministry this was a demotion to a department that doesn’t matter. Some saw it as humiliation. Yet tourism is one of the most important sectors of the economy. Before the pandemic, it accounted for about a tenth of economic activity and was one of the few sectors that created jobs.
With the jobs crisis having worsened, the sector needs a proper champion. We can safely conclude that doing the job isn’t top of mind for Sisulu.
The governing party as a whole needs to change gear. Its governance failures led to it suffering heavy flows in the local elections in November, pushing it below the 50% level for the first time since SA became a nonracial democracy.
The ANC risks doing worse and losing power in 2024. Ironically, it is hard even for Ramaphosa’s critics in the party to see it doing better without him. In the end, Sisulu is no Jacob Zuma riding a wave of popular support against a sitting president. The idea that Ramaphosa cannot act because it would risk a similar fate to former president Thabo Mbeki is unconvincing.
In fact, the opposite could be true if he is perceived to be weak.
What remains is that the country will be left poorer by the ANC’s infighting. The Reserve Bank will this week show what’s at stake, and that outlook is likely to be confirmed by finance minister Enoch Godongwana next month.
The focus for 2022 needs to be on GDP, not politics. That will only become possible if Ramaphosa asserts his authority.
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.