The Presidency has defended the year-long vacancy in the role of economic adviser to President Cyril Ramaphosa, saying it hasn’t paralysed decision making on the economy.
The position has been vacant since Trudi Makhaya resigned last May.
Presidency spokesperson Vincent Magwenya said the management of the economy, especially the drive to stabilise and grow the economy, was not solely dependent on the president having a full-time special economic adviser.
“Various elements of the economic recovery plan remain on track with respect to their implementation. Key economic enablers, namely, energy, transport, and logistics are in the process of being turned around.”
He said the absence of a special economic adviser did not mean the Presidency was unable to manage the economy as it was already seeing “green shoots” from the work done to respond to the energy crisis and the logistics backlogs at the ports.
Of course the position is important because the president needs to get advice on economic matters and so on. But the president has a number of people who are well qualified and
experienced on economic matters
“All of this work is being done with the leadership of the government in collaboration with other social partners, in particular business and labour. The president remains engaged with a number of local and global investors and in promoting South Africa as an attractive investment destination.”
However, some observers believe the lack of an economic adviser in the Presidency has hobbled that office, allowing for economic policy matters to be dictated by other arms of government. With elections looming, the position looks likely to be filled only by the new administration.
Magwenya said the president would have an opportunity to reconstitute his advisory team at the start of the seventh administration.
Efficient Group economist Dawie Roodt said while the position of economic adviser to the president was important, the markets were not losing sleep over the vacancy at this time as the country was entering elections.
“Of course that position is important because the president needs to get advice on economic matters and so on. But the reality is that the president has a number of people that are very well qualified and experienced on economic matters.”
He said many economists were working at the Treasury and Ramaphosa could get all relevant information from his minister of finance and the Reserve Bank governor.
Antswisa Capital chief economist and director Miyelani Mkhabela said the economic adviser role exists to provide the president with pragmatic, objective advice on the formulation of domestic and international economic policy.
“The position of the economic adviser is important. However, there was not enough time for change management and adaptation for the candidate economist as South Africa is heading to its national elections.”
He said the president would likely appoint the economic adviser after elections, when they would have more time to evaluate domestic and international economic policy and design viable development policy propositions.
Meanwhile, parties vying for control of government have released manifesto pledges vowing to introduce new social grant interventions for South Africa’s 28.31-million grant recipients, but only two have committed to the introduction of a basic income grant (BIG), or universal basic income.
Independent economist Duma Gqubule said he found most of the manifesto pledges underwhelming on their social security spending commitments, adding that the big three parties failed to commit to a BIG.
“The ANC is vague despite the fact that the president said he wants to bring a basic income grant. The DA mentions adding to the child support grant. The EFF, which is strangely enough a party of the left, says nothing about the basic income grant, which signals a disconnect between the EFF and civil society.”
He said ActionSA and the new MK Party had surprised him by pledging a universal basic income of some sort.
“Social security spending has a high multiplier effect on the economy. It will create economic growth and as long as it is implemented in a coherent growth strategy, it will be sustainable. And I am not seeing a coherent growth strategy from the big three parties or any of the smaller parties.”
Rhodes University’s Prof Philip Machanick said that as the election loomed it was important to address why South Africa had so many grant dependants and to consider whether there were other broad societal interventions to aid the poor more efficiently, such as free public transport.
“It is also important to have an explanation of the social purpose of a particular grant and whether there is a plan to reduce the need for it or to reduce the scale in the long term. For example, the child support grant is essential because there is so much poverty; genuine plans to reduce poverty and inequality are needed as a complement to plans for social grants.”
Machanick said the original idea of a BIG was that it was an amount that everyone would receive without means testing, and those better off would effectively pay it back through higher taxes.
He said of the ANC's latest proposal: “As far as I can tell, this one will still be means tested, and if it does not increase much over the R350 SRD grant it will be at most relatively minor poverty alleviation. The other key idea of the BIG is that it replaces other social grants, so the ANC is latching on to the popularity of the concept but not actually implementing it. Rather than simplify the grant landscape, it adds another complication.”
The ANC presentation also outlined three scenarios; one keeping the SRD grant at R350 until 2030/31 at a cost of R64bn, a second scenario adjusting the grant for inflation over the same period costing R89bn, and a third covering the food poverty line over the same period costing R129bn.
In its economic policy document released on Friday, the DA reiterated its plan to convert the SRD grant into a jobseekers' grant.
“The conversion of these grants would require recipients to actively seek work opportunities or show evidence of intention to start a small business and provide evidence to the department of social development to continue receiving the grant. The purpose of the grant would, therefore, be to assist recipients in their job searches, starting small businesses (eg. selling fruits and vegetables) and meeting their basic needs,” the party said.
It also vowed to increase the child support grant to R760 per month, the same level as the official food poverty line.
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