Businessman Sipho Nkosi must think the gods are turning him into their plaything.
Not long ago, he was appointed our red tape czar. He would, from his base in the Union Buildings, whoosh a magic wand to remove obstacles that made doing business difficult. And then last week we learnt that Sasol, the company he chairs, failed to get a water licence renewed for its largest colliery, Syferfontein, which supplies coal to its Secunda operations.
Like so many aspects of our lives, water licences are toxic tentacles that kill business activity and suffocate the economy. Water reforms are among the priority projects conducted by Operation Vulindlela, which co-ordinates several high-impact initiatives to ignite the economy.
Operation Vulindlela is collaborating with the Cities Support Programme to develop strategies to help municipalities deliver water services. Energy projects, like Eskom’s water licence applications and others linked to private sector renewables, have a high-priority status.
Maybe the government officials considering Sasol’s renewal application were simply playing a bad joke on Mr Fix It Nkosi. The archaic operations at the water & sanitation department are similar to those at the mineral resources & energy department, where junior officials, sometimes at regional offices, have enormous power to frustrate business.
It reveals the nature of the problem: turn left for water licensing, and confront bureaucratic decay; turn right for mineral rights, and you hit more red tape.
While the wheels of the state are falling off across all spheres of government, we are about to see a gigantic battle over fiscal policy direction, as the National Treasury warns of the pressing need for spending cuts. The folks at Treasury are starting to see they have arrows trained on them.
Finance minister Enoch Godongwana is a skilful politician, normally able to quell market anxieties and simultaneously manage political conversations within his party.
Turn left for water licensing, and confront bureaucratic decay; turn right for mineral rights, and you hit more red tape
But what we don’t know now, in his role as finance minister, is the nature of the mandate he got from his boss, President Cyril Ramaphosa.
The coming period will test their telepathic understanding, and also whether they can stick to their convictions. But what happens when these economic policy convictions are incongruent?
Godongwana has a solid take on macroeconomics and how budgets are managed in an open economy. He is market orthodox. We don’t know Ramaphosa’s position, but usually, after being asked a couple of times, he yields to market sensibilities.
Godongwana’s problem is that Ramaphosa chooses to placate everyone, avoiding disagreements to protect himself.
Ramaphosa’s style leaves ministers open to wild political attacks.
Cosatu and the South African Communist Party are spoiling for war over the proposed budget cuts.
Cosatu unions have a bone to pick regarding salary increases, and will be anxious about how government budgets for them in 2024. The SACP is upset about a number of issues, including Godongwana’s reluctance to fund National Health Insurance. The finance minister said he would rather have hospitals fixed than fund the NHI.
More than anyone, Godongwana knows the staccato nature of onslaughts by the SACP and Cosatu. Until two decades ago, he was a rabid communist and general secretary of the National Union of Metalworkers of South Africa. He knows how the battles start. However, the shoe is now on the other foot, and he is a soldier with a distracted general.
Godongwana would do well to seek constant clarification from Ramaphosa on the finer points of the medium-term budget policy statement mandate — which is what market gurus will be watching out for. That the budget crunch will take place in an election year is something Godongwana understands. Spending cuts, as a principle, fly against the expansion required when facing elections.
That contradiction makes life at the Treasury very difficult. Several ministers are hoping the budget deficit or tax shortfalls are exaggerations. Alternatively, they will push for more borrowing. We are about to see cognitive dissonance pervade the governing party — with it professing one thing while going on to do the opposite.
In this environment of high-level policy misalignment, it is only natural that the officials in the administration feel it is easy to slap red tape on Nkosi’s Sasol. “Just for control,” as the saying goes.
• Mkokeli is lead partner at public affairs consultancy Mkokeli Advisory
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