A former FirstRand CEO has halted some of his business ventures following the Cabinet reshuffle and the two credit rating downgrades.
Sizwe Nxasana, who is now chairperson of the National Student Financial Aid Scheme and involved in an education business, said he had been planning to build three education campuses.
“We decided that we would not build three campuses; we would build just one. We are going to sit tight and wait and see what happens.
"We are very small in the context of large companies,” Nxasana said at the inaugural Courageous Conversations dialogue series, held this week at the Nelson Mandela Foundation, which organised the initiative in partnership with the SA Institute of Chartered Accountants and the Wiseman Nkuhlu Trust.
“[With regard to] the debt that we are going to raise to build all of these campuses – we need to take a longer-term view.
"Debt that we are going to raise is going to be more expensive. We have cancelled the construction of one of our campuses. That construction would have created 120 jobs.”
Businessman and University of Pretoria chancellor Wiseman Nkuhlu, who was former president Thabo Mbeki’s adviser, said:
“The most shocking thing about the downgrade: I have never heard a credit downgrade being precipitated by the president ...
"In my mind, the core of the crisis we face is that somehow, the leadership has lost interest in terms of being inspired and guided about what is good for the people of South Africa.
“As a country, we need to ensure that we do not find ourselves losing our sovereignty in terms of our finances and being under the control of the International Monetary Fund (IMF).
"We were inspired by the fact that, in 1994, we were going to be responsible for our own economy and we wouldn’t allow the IMF and World Bank to dictate policies to us.
"We took that painful decision and took the restructuring up to 2000, when we finally got investment grade.
“The most shocking thing is about losing the direction, losing the pride, losing sense about the South Africa that [then president] Nelson Mandela imagined in 1994. That is lost.”
Political analyst Moeletsi Mbeki said South Africa was “so preoccupied about our past”.
“We need to study the past. We have to learn instead of shooting from the hip,” he added.
“What is it that the ANC government has achieved in the past 23 years? It has made lots of mistakes, like the downgrading.
"The ANC government has achieved two things. Firstly, the growth of the black middle class.”
Various estimates numbered the black middle class at 3 million, Mbeki added.
“The second achievement of the ANC is that it has kept the South African economy functioning. Can the ANC build on this? My own view is that it cannot.”
Plight of the poor
One audience member at the event said the black middle class was alienated from the government.
“Black middle class people do not have a political home any more. It used to be that we were connected to the ANC. Gradually, over the past 10 years, we have been alienated.”
Mbeki said Zuma had denounced the black middle class. “What is it that Zuma is denouncing? The ability to think independently, to be creative, to be innovative.
“He now sees that as a threat and the ANC sees that as a threat. For me it is an asset. The ANC has run its life. It has done it reasonably well.”
Investec economist Annabel Bishop said the plight of the country’s poor could not be improved without strong economic growth.
Even if the country grew at 5% to 6% a year, unemployment would only drop from about 27% to 22% because of the multitude of people in the economy not having adequate skills or education, she added.
Turning to South Africa’s credit rating, Bishop said:
“This is not the end now. We haven’t got over the hump and we can now relax ... There can and will probably be worse to come unless we change our metrics.
“Credit ratings agencies are looking at us and saying we need to have growth and less debt to GDP. This is the big risk.”Read Fin24's top stories trending on Twitter: Fin24’s top stories