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Can we live with a rand at R20 to dollar?

Opinion
The SA Council of Churches joins the Republic in mourning the sad passing of Ahmed Kathrada, a deep reservoir of national wisdom dressed in the gentle humility of his person - a Gentle Giant! Our hearts, thoughts and prayers are with Barbara Hogan and the Kathrada clan at this difficult time. We express our condolences to the family, the ANC and the SACP; and indeed the people of South Africa to whom Kathrada gave his modest life that was atonement for all our sins of arrogance and self-serving.

When a great light goes out it gets very dark. But it doesn’t help for such to happen at the same time as when the national skies are engulfed by dark clouds! Izulu liyezisa, limathumb’antaka! You will pardon me for linking our recognising Kathy, the gift of his life, and even the momentous offering of his life with such a time as this.

When in 1993, we nearly lost ourselves with the senseless assassination of Chris Hani; it was the peaceful death of the venerable Oliver Tambo that restored our sanity. This time, Ahmed Kathrada is the treasured offering in our time of Treasury woes!

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SA Council of Churches general secretary Malusi Mpumlwan. Picture: Matthews Baloyi

He gave his all from an early age, because no experience of gloom would suppress his irrepressible spirit of hope; and has lived on his irrepressible spirit of hope: for a truly nonracial and non-racist society; for a clean, transparent, servant government, led with impeccable integrity to stave off the relevance for South Africa of the condemnation of the Prophet Isaiah (1:23).

“Your rulers are rebels and companions of thieves; everyone loves a bribe and chases after rewards. They do not defend the orphan, nor does the widow’s plea come before them.”

Prerogative

In the wake of Kathy’s interment, President Jacob Zuma exercised his constitutional prerogative and occasioned a cabinet reshuffle. We would vigorously defend Zuma’s constitutional right for we are a constitutional democracy. This is not necessarily a comment on the choice and capacity of ministers recently appointed. But as St Paul writes: “All things are lawful, but not all things are helpful!” Last week, Kathy’s week, brought back the memories of December 2015 when the president stunned the country with former Finance Minister Nhlanhla Nene’s dismissal.

At that time we wrote to Zuma to express our serious concerns which were informed, as we said to him, by the context of the country’s credit ratings; the potential impact of that on the livelihoods of poor communities; the instability that may arise as a result; and the unfortunate perceptions that accompany this development, that undermine public confidence in the executive and the person of the president. The perception against Zuma was fuelled by the belief that Nene’s dismissal was precipitated by factors such as the then-public South African Airways procurement debacle, and the potential unsustainable expenses of the proposed nuclear deal, which is still before us today.

Read also: Assets tumble on Gordhan sacking

That context of December 2015 prevails even more so today. Whereas nothing compelled Zuma in 2015 to appoint Pravin Gordhan, he did, and the country gained a finance minister who fought like a vicious hen in the face of swooping hawks, to protect the Treasury and the standing of the South African economy. His rather ugly dismissal seriously undermines what has been achieved. It brings the prospect of our downgrading to junk status closer to reality, making it very expensive to sustain our national debt that currently stands at more than R2 trillion, just 40 percent shy of the gross domestic product, with an interest bill of about R140 billion.

In December 2015, we told Zuma, as we do again today, that the almost inevitable scenario we shall face includes:

A sharp decline of the value of South African stock, including the value of invested pensions of citizens, both civil servants and ordinary people.

Further serious decline of the value of the rand, leaving us with a steep rise for key imports such as fuel. Can we live with a rand that reaches R20 to $1?

A domino effect of sharp increase in the cost of living with price escalation.

Labour will campaign for much higher wages to meet the higher cost of living, in an employment environment that has limited flexibility.

Runaway inflation that upsets the targets of the Reserve Bank, forcing uncomfortable adjustments to interest rates.

With limited resources there may be cuts in infrastructure development projects; as we have less access to international investors, yet with limited savings of our own to counter that shortfall.

Both government and private sector may have to edit down their budgets and cut costs - with massive job losses such as we see upcoming in the mining sector.

It is in this regard that we bemoan the ugly manner of Gordhan’s dismissal. Ugly because of the sour and dark aspersions cast on his person, that of Mcebisi Jonas and the indefatigable director-general Lungile Fuzile. Zuma is said to have based his grave decision on charges made in an intelligence report that said the Treasury was conspiring against the economy of the country; the same that they spent the last 18 months defending.

Frightening thought

The frightening thought of the Treasury leadership conspiring and allegedly acting on that conspiracy against our economy through secret London meetings! This sounds like no less than a treasonable act, if proven to be true! Which raises two questions:

Should such allegations not have warranted a second thought before being touted as valid reasons for undoing a team that is a protective bulwark for the country’s Treasury?

Secondly, would such presumed treachery only attract a dismissal of the finance minister; would it not attract a full-scale investigation and a possible treason trial? Therefore, why should Zuma not proceed to prefer charges for all to see and witness in a court of law where justice processes can take their course? We wonder! With Prophet Amos we say: “Let justice roll on like a river, righteousness like a never-failing stream!”

Bishop Malusi Mpumlwana is the General Secretary of the SA Council of Churches.

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