For Mboweni's growth plan to succeed the ANC has to give up certain dogmatic positions that were formulated when 7% growth was the status quo, writes Adriaan Basson.
Morning clouds. Mild.
ANC launching its manifesto ahead of the national elections expected to take place in May. (Tshidi Madia/News24)
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A state that can struggle to distribute drivers’ licences, or to maintain roads and water systems is hardly an ideal candidate to reconfigure society, and judiciously manage the property rights of its citizens, writes Terence Corrigan.
January 8 statement – combined with its manifesto launch for the coming
election – constitutes an opening of sorts of South Africa’s political year,
providing some insight into the ruling party’s intentions for the foreseeable
those hoping to see the rays of the "new dawn" promised last year, it
would have been disappointing.
clearly has its very profound difficulties. With an unemployment rate of over
27% on the strict definition (and close to 40% on the expanded definition),
millions of South Africans are frozen out of even minimal opportunities for
socio-economic advancement. Their prospects are long-term frustration.
READ: The people cannot eat manifestos
Ramaphosa’s invocation of the need for economic inclusion was correct and
well-taken. So was his recognition that without investment, domestic and
foreign, this will not be possible.
January 8 statement offered scant reason for optimism.
to aggressively target investment, working with its "social partners"
to bring in R1.2tn over five years. It pledged to reduce the costs of doing
business in South Africa and to make funding available to small enterprises. New
economic frontiers would be opened up.
assurance these measures might engender is undercut by the statement’s
contradictory commitments. Chief among these was the restatement of the ANC’s intention
to implement a policy of expropriation without compensation. There is little
that concerns investors more acutely than lack of certainty around the security
of their investments. The mere debate around expropriation without compensation
has inflicted damage on South Africa, and the active implementation of the
policy stands, at a bare minimum, to induce a period of intense policy
environment is unlikely to be conducive for investment.
the ANC’s election manifesto recommends a change in the mandate of the Reserve
Bank (secretary general Ace Magashule reiterated that it would be
nationalised). On mining, a state company "will be strengthened to play a
significant role in the industry". A regime of prescribed assets is to be
introduced. Many South Africans – not just investors by any stretch of the
imagination – will be watching the latter with trepidation. The prospect of
people’s savings and pension funds being required to prop up the country’s cash-hungry
state-owned enterprises is a matter of deep concern.
Indeed, the statement
and manifesto both lean heavily on the ability of the state to drive its
building a developmental state that puts people first and has dedicated public
servants who work diligently to improve the lives of the people," Ramaphosa
said. While acknowledging the sub-optimal state of South African governance, it
fails to go much beyond standard platitudes about dealing with corruption and
broad promises of making government work together.
This may be
sincerely intentioned, but a capable (let alone "developmental")
state is unlikely unless the ANC and the government are willing to make a
fundamental break with the root causes of some of the current pathologies, such
as the politicisation of the civil service.
been a glaring problem at local government level, and has been recognised by
government itself. The following extract from an official report in local
government in 2009 is illustrative: "Assessments revealed that party
political factionalism and polarisation of interests over the last few years,
and the subsequent creation of new political alliances and elites, have indeed
contributed to the progressive deterioration of municipal functionality.
Evidence has been collected to dramatically illustrate how the
political/administrative interface has resulted in factionalism on a scale
that, in some areas, it is akin to a battle over access to state resources
rather than any ideological or policy differences. The lack of values,
principles or ethics in these cases indicates that there are officials and
public representatives for whom public service is not a concern, but accruing
wealth at the expense of poor communities is their priority."
A state that
can struggle to distribute drivers’ licences, or to maintain roads and water
systems is hardly an ideal candidate to reconfigure society, and judiciously
manage the property rights of its citizens.
this suggests more continuity than change: a continuity manifesting itself in
both the problems and the policy responses.
As Dr Mark
Mobius, then of Franklin Templeton Investments, said some years ago: "They’ve
got to make South Africa a much more attractive place for investment… I’m not
only talking about foreign investment. I’m talking about local investment."
And this is
especially concerning considering that in 2018, the JSE experienced a net
outflow of some R123bn. The ANC’s weekend announcements indicate that the ‘new
dawn’ has not yet broken.
- Terence Corrigan is a project manager at the Institute of Race Relations (IRR). Readers are invited to take a stand with the IRR by sending an SMS to 32823 (SMSes cost R1, Ts and Cs apply).
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