Mpumelelo Mkhabela

The low-hanging fruit that could turn around the state

2019-08-02 05:00
Me. Patricia de Lille. Foto: GCIS

Me. Patricia de Lille. Foto: GCIS

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Given the fact that government is a massive buyer of goods and services, if all ministers were to do exactly what Patricia de Lille is doing, it would go a long way to turn around our ailing economy, writes Mpumelelo Mkhabela.

In times of crises, citizens look to governments to provide leadership. The expectations are understandable: governments themselves thrive by manufacturing promises. 

This is not to suggest governments are not powerful. They control the levers of power, including law-making, commanding security forces, deciding on national budgets, making policy choices and so on.

It is how these statutory powers are exercised – competently or incompetently – that determines whether governments become forces for good or bad, progress or regress.

South Africa is no exception. We have multiple crises. Among them, unemployment (now at 29%), slow economic growth (projected to stay below 1%) and general decline of wellbeing (as evidenced by decline in income per capita and increasing poverty).

Those who are competent in areas where they are assigned duties in government and the private sector know what is the right thing to do in times like these. The opposite is true of those who lack competence, but enjoy the trappings of office and perks.

Neither success nor failure is inevitable. It all depends on what we do to strengthen the hand of those who do or are prepared to do the right things. Consider the following two case studies.

CASE 1: Remarkable!

The first case is about the initiative by Patricia de Lille, the minister of public works and infrastructure, to speed up payments to providers of goods and services. 

Her department serves as a landlord to the entire state and members of the public who use state buildings. In executing its functions, the department procures services and goods from private sector companies who have to be paid timeously so that they, in turn, can honour their own contractual obligations. But incompetence and corruption have stood in the way of the settlement of invoices within the prescribed 30-day period.

Since she was surprisingly appointed to Cabinet, the leader of the GOOD party has taken up this policy undertaking that had lacked a champion. She is implementing it with oomph and innovation. She reports on a daily basis on social media the progress on the payment of outstanding invoices. 

Through her action, De Lille is speeding up transactions, economic activities, helping to circulate money, creating demand and adding value. That's how to contribute to economic growth.

De Lille's actions are also reducing the incentive for corruption and strengthens the hand of those who believe in good governance and efficiency. The corrupt within her department are increasingly denied the opportunity to solicit bribes to process invoices.

It might appear to be too small a ministerial gesture to have a positive impact on our economic woes. You can only appreciate the positive impact if you meet a business person who closed shop and retrenched employees because of delayed payment or extortion of an "expensive" bribe. 

De Lille's innovation is a welcome relief. In July alone, she ensured the record payment of R938m to over 2 000 suppliers with 12 889 invoices averaging 14 days. This is remarkable!

De Lille's drive was triggered by President Cyril Ramaphosa's concerns in the 2018 State of the Nation Address about the devastating impact of government's failure to pay suppliers on time.

De Lille should be encouraged to continue with her "consequence management" strategy against officials who stall payments for no apparent reason. 

Given the fact that government is a massive buyer of goods and services, if all ministers were to do exactly what De Lille is doing, it would go a long way to turn around our ailing economy. Why are other ministers not doing the same? Private sector companies should also adopt this best practice to remove the devastating impact on supply chains across the economy.

CASE 2 – Trust is in the doldrums

This case is contained in The Stellenbosch Mafia: Inside the Billionaires' Club, by Pieter du Toit. Jannie Durand, the chief executive officer of Johann Rupert-led investment company Remgro, is quoted complaining about government's failure to appreciate the role of the private sector.

"We have to tell government what we are able and willing and able to do. But we need a partner in the state," Durand is quoted saying.

"For example, I fly to Mozambique or Zambia or Ghana or Angola, and I have a meeting with a major politician, they stick to the agreement. Because they know we're big investors in their countries. But when I request a meeting with the mayor of Stellenbosch to discuss developmental projects, the meeting is cancelled 30 minutes ahead of it and we never get a meeting again. Levels of distrust are high." 

Durand had tried in vain to get the Stellenbosch Municipality to redirect resources to refurbish streets in Kayamandi township instead of focusing on the affluent suburbs of Stellenbosch where "we can look after ourselves". Durand's experience with the DA-led municipality of Stellenbosch is exactly the opposite of what should happen to grow the economy and improve infrastructure.

The book contains anecdotes of South Africa's top business leaders who increasingly feel appreciated more abroad than at home.

If we understood the extent to which states are constantly in a global battle for investments, someone high up in government would have called Durand and others by now to address their concerns.

In the same book, Durand also raises concerns about the failure of the government to harvest low-hanging fruit to improve the state of medical care. He asks, why is the ANC-led national government not introducing an accreditation requirement for private healthcare companies to operate a few public hospitals on behalf of the state.

Durand's views show South Africa has not run out of ideas to fix its problems. We choose not to utilise the ideas. He attributes this to trusts levels with politicians that are in the "doldrums".

Government in all spheres – municipal, provincial and national – must appreciate investors and work with them to grow the economy. 

- Mkhabela is a regular columnist for News24.

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Read more on:    patricia de lille  |  jannie durand  |  state
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