Johannesburg - The clock is ticking for President Jacob Zuma. Not the one on the Economic Freedom Fighters (EFF) website counting down to his State of the Nation address on Thursday evening, but the time left for him to complete the chapter in his presidency.
It has not gone entirely according to plan and, given the lag between the development of a plan, the realignment of the machinery of state required to execute it and its felt effect on the lives of citizens, it is quite likely Zuma will end his term in office without the full effect of his two-term administration being manifest.
The effects that register, those that shape public opinion of him, are largely negative. If future generations are to view him in a more positive light, things are going to have to start going right.
He need only look at the US public’s low opinion of President Barack Obama, despite his handling of the economic crisis he inherited from his predecessor, to realise that between getting it right and getting the credit for getting it right there can sometimes be an insurmountable divide.
Many think Zuma has got it horribly wrong.
Thursday is a big night for the president, more so than other addresses, because in setting the line of march for the state in the year to come, it represents possibly a final opportunity to straighten course.
Even if things go smoothly between now and 2019, when Zuma’s term ends, the signs are not encouraging that he will be able to sign off on a high.
In broad strokes, this is what was meant to have happened up.
Against the backdrop of the 2008 “Great Recession”, the government would take advantage of its relatively strong fiscal position to counteract the headwinds, borrowing more and investing in a huge infrastructure programme that would have multiple beneficial effects.
It would break the structural logjams – chief among them in transport, electricity supply, ICT infrastructure chief – holding the economy back from higher rates of growth. This would “crowd in” private-sector investment as it expanded opportunities for businesses, which would also become more competitive, thanks to more efficient essential infrastructure.
It would also spur local manufacturing through the sheer scale of the programme and localisation requirements attached to the contracts for building the infrastructure. It would create jobs in the short term, boost skills for the longer term, and stimulate job creation as the economy recovered and took off on a higher growth path.
This recovery and faster growth would enable a return to a more sustainable fiscal stance, with the government borrowing as a percentage of gross domestic product tapering off in a virtuous circle.
Along with a huge increase in social spending to cushion the poor and make up for jobs shed in the private sector, that was the plan, in a nutshell, in the early years of the Zuma administration.
At the same time the National Planning Commission had been set the task of conceiving a long-term master plan, which it produced in the form of the National Development Plan (NDP), adopted by the cabinet in 2012.
It shares elements of the original plan, but places greater emphasis on the state, creating conditions conducive for the private sector to thrive, and boosting efficiency.
The NDP has been given concrete form in a medium-term strategic framework that has targets for delivery and which will be driven from the Presidency to ensure alignment and compliance across government departments.
This is the Zuma administration’s last roll of the dice to overcome what Reserve Bank Governor Lesetja Kganyago recently termed its “implementation deficit”.
It is this deficit that threatens to unravel Zuma’s legacy, in terms of the goals his administration set itself, and which he must tackle on Thursday.
The plan is struggling to gain meaningful traction.
When Zuma took office in 2009, the first electricity from the Medupi power station was scheduled to come on to the grid about three years later, towards the end of 2012.
Yet, more than two years after that deadline, it is still unclear when the first unit will achieve commercial operation, and it will not be before June. This, with contributing factors like the decrepit state of the coal-fired power stations, has had disastrous knock-on effects for electricity supply and the economy.
Eskom has had to run its back-up diesel power stations full tilt, at huge financial cost, while having to begin the repayment of the loans for Medupi and Kusile before it earns a cent in revenue from the power stations, turning itself into a financial basket case.
Skipping planned maintenance of the ageing power plants to keep the lights on has led to more frequent failures, in turn increasing the need for diesel-generated power.
With the labour instability leading up to and following Marikana and a certain amount of sheer bad luck in areas the government could not control, this has contributed to far lower growth than it was banking on when it first started borrowing all that money.
The result is that government debt today stands at an estimated 46.1 percent of GDP, compared with a forecast for this year of 44 percent when then-finance minister Pravin Gordhan presented the first budget of the Zuma administration in 2010, and up from 23.1 percent in 2008-09, while the peak, now expected to be 4 percent higher than Gordhan’s forecast, at about 48 percent, has been shifted out to 2017.
Meanwhile, the delayed completion of infrastructure is causing uncertainty for investors who might otherwise be breaking ground on new projects – and the electricity crisis is set to last at least another two years.
All of this makes it harder, and more expensive, to borrow the money needed to execute the remaining infrastructure plans.
The fiscal space the Zuma administration inherited is gone.
It has had to trim its sails accordingly, putting the brakes on spending just when the economy could really use a kick-start – the opposite of the virtuous circle envisaged in 2010 – and GDP growth seems unlikely to meet Zuma’s target of 5 percent by 2019.
The chances are slim that Zuma will leave the economy in rude health, having met all the targets he set himself for job creation, transformation, land reform and reducing poverty, among other things.
To complicate matters, there are more and more outward signs of divisions within the ANC playing themselves out in the operations of the state, threatening to confer on Zuma full lame-duck status before his second term even reaches the halfway mark. The constant, debilitating turnover in the boards and management of state-owned enterprises is one example, often accompanied by chronic underperformance and a dependence on government bailouts.
Similar instability in the security cluster, most recently playing out in the Hawks, National Prosecuting Authority and Special Investigating Unit, is also hobbling efforts to get on top of crime – particularly of the organised variety – and corruption, at the same time eating away at public confidence in the state.
All of this may signal that efforts to loosen Zuma’s grip on the levers of state have commenced and that he is pushing back, or it may simply reflect shifts in the internal balance of power, but it does not augur well for his, or his government’s, ability to execute its plans efficiently.
More than anything, the perception Zuma needs to refute on Thursday is that the “implementation deficit” is a direct consequence of internal ANC battles, whether ideological or linked to control over patronage streams and, ultimately, over the party itself.
The message should be clear, consistent, light on rhetoric about what has been done, and rich in concrete detail on what will be done.
It would be good if this included a plan for the restructuring of state-owned enterprises that set them on a credible path towards recovery and, critically, put an end to meddling in their governance by political power brokers.
It would be encouraging if Zuma confided in citizens on the reasons, as he sees them, for the upheaval in the security cluster and spelled out precisely what he planned to do to restore its credibility and operational efficiency.
The “radical transformation of the energy sector” that he promised in his second State of the Nation address last year, in June, needs to be fleshed out with steps that will be taken in the next few months to realise it.
Beyond merely castigating the willing-seller, willing-buyer approach to land reform and talking about expropriation, Zuma should say not only how land reform will be accelerated, but how emerging farmers will be helped to get on their feet and stay there. Given that the state has run out of room to boost investment on its own, the president should go beyond making soothing noises to the private sector and give examples of how it will be encouraged to invest in capacity.
All of this is a tall order for a president suffering from a deficit of his own – that of his credibility as a leader – and facing unprecedented hostility in Parliament.
But it may not be too late, with a little luck thrown in, for the president to chart a course on Thursday that would ultimately see him being remembered more fondly than seems likely in the rough-and-tumble present. He will probably not get another chance.
Political Bureau