After Moody's recently changed the outlook on the country's credit rating from stable to negative, Standard & Poor's followed suit last week. The International Monetary Fund has also weighed in, reminding South Africa of the need to create an environment that is conducive for investment and implement much-needed structural reforms to boost the ailing economy.
It predictably referenced the inefficiencies we are all aware of, as well as the overall fiscal positions in State-Owned Enterprises (SOEs).
One might be forgiven for suspecting an international onslaught on our poor country; but such forgiveness would be unwarranted if not accompanied by an honest look into the mirror to acknowledge what one sees, as well as a further acknowledgement of all our home-brewed troubles.
Look in the mirror
This is an interesting approach. In the past, and elsewhere in the world, especially in much of the developing world, the IMF used to be come in – invited, of course – and administer the bitter structural reform pill directly down the throats of ailing, kicking and screaming, economies. We should assume that "grown-ups" like South Africa get to be handed the dreaded pill in the palm of their hands to administer it themselves when they feel ready – with a bit of supervision, of course.
In the current climate it is hard to see the requisite readiness to take the bitter pill happening anytime soon, while we still bicker about the skin colour of an expert who gets appointed to lead the start of a much-needed turn-around at what is, arguably, the most economically deal-breaking of the SOEs, Eskom.
South Africans seriously need to wake up. Fighting over the race of the doctor when the patient is on the verge of giving his last breath is hardly the most mature way to do things.
Now, only the blind – and there are still too many of them out there; loud and ready for a protracted fight – will disagree that the economic situation is unlikely to be turned around while the governing ANC’s leftist tripartite alliance partners, the South African Communist Party (SAPC) and the Congress of South African Trade Unions (Cosatu) remain concerned only with what sits at the centre of their belly-buttons, irrespective of what is good for the country.
It seems like no one has the courage to show them the numbers and to draw the line, reminding them that given the state of the South African economy – thanks to the massive and devastating effects of state capture – we all have to tighten our belts. The SACP and labour unions need to recognise that the world owes them nothing, and that forever making demands cannot be sustained.
Apart from the need for interventions to tackle weak growth, a deteriorating fiscal situation and difficulties in the operations of state-owned enterprises, the IMF recognised progress that has been made since it last visited, in May. This included the approval of the Integrated Resources Plan (IRP), which should serve as government’s blueprint for future energy investments, as well as a simplified visa regime, notably the scrapping of the dreaded Gigaba-era requirements for unabridged birth certificates for children entering the country.
What the IMF left unsaid, perhaps because it has not traditionally gone as a stand-alone chapter into the formal reports of national governments and global institutions, is the still ailing country reputation of South Africa. Leaving out for a minute what the rest of the watching world might be thinking about us, we should be concerned about what South Africans think about us; especially those who have the money and the means to invest in the local economy and help stimulate it to sustainable levels.
Let’s also, for another minute, leave aside the ever super-charged and optimistic Discovery Health’s Adrian Gore, and focus on the broader South African business sentiment. What was it like in, say, 2006 – at the height of the Thabo Mbeki administration – and what is it like, today? What happened to the "business confidence" at the onset of Ramaphoria and where is it today?
The Bell Pottinger effect
Have we ever stopped for a minute to measure the real impact of the "Bell Pottinger Effect" on domestic business confidence?
Did the damage go away with the demise of that British spin doctoring agency or have the seeds of its commissioned, racially divisive, campaign been left behind to germinate silently in our mist? Do we still live with widespread racial finger-pointing that seems to deliberately overlook the effects of the more recent state capture and Bell Pottinger to settle comfortably on the distant historic horizon of colonialism and apartheid because those are easier to blame our contemporary troubles on?
Do we continue in blissful denial or are we prepared to face the real impact of more recent country reputation-damaging conduct that was enabled by people who continue to inspire song and dance when they walk into the room?
The reputational hurt that has been visited upon South Africa will require a far more serious, deep-dive analysis to be addressed; not just fancy country marketing videos that focus on the stuff we already know (South Africa’s natural beauty and the fact that ours is, by far, the most industrialised economy in Africa).
There are no short-cuts to undoing the reputational damage that has been done to our South Africa. Placing plasters on deep-seated business confidence wounds will not do the trick either.
Without acknowledgement and political consensus to start doing things differently, including the need for serious sacrifices by those who have become accustomed to just demanding and taking without giving anything in return, our recovery road will be steep indeed. And the constant racial finger-pointing and threats one often sees and hears being made at the hand that is expected to play its part at stimulating growth are seriously self-defeating.
* Solly Moeng is brand reputation management adviser and CEO of strategic corporate communications consultancy DonValley Reputation Managers. Views expressed are his own.