File image: Chief Executive Officer at IQbusiness, Adam Craker. (IOL).
File image: Chief Executive Officer at IQbusiness, Adam Craker. (IOL).

Salvaging South Africa’s faith in a new dawn

By Adam Craker Time of article published Feb 3, 2020

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JOHANNESBURG -  There are three things that all South Africans are craving right now – and it’s not just a return to the summer holiday. 

2019 was meant to be the year that President Ramaphosa would take action and set the country firmly back on track, but as 2020 kicks off, we are left with more questions than answers. 

The Zondo Commission of Inquiry has laid bare many skeletons in our political closets but failed to produce sufficient evidence for the worst culprits to be prosecuted. Similarly, despite repeated promises that a plan would be put in place to “rescue” Eskom, the unprecedented rolling blackouts experienced in December and January may have pushed us into an unfortunate recession from which to launch our new decade. The result is that South Africans are justifiably angry and disappointed – and President Ramaphosa is vulnerable, as is André de Ruyter, having lost his chairman in his first week as Eskom CEO.

There is still time for Ramaphosa to deliver on his promise of a New Dawn but first he needs to address the most basic and most important needs of the public. If he fails to do so, he will face greater opposition from within the ANC and from the public. One only needs to look at the fiasco that was the recent British elections to appreciate just how dangerous that could be.

Firstly, South Africans are desperate for an affordable and reliable supply of electricity. The recent catastrophic rolling blackouts have once again made this a political flashpoint and it will continue to be so until the president takes concrete action to resolve the crisis. Critically, it provides an opportunity for much-needed public private partnerships in the energy sector – something that for the first time appears to be a real possibility. The recent announcement by Minister of Mineral Resources and Energy, Gwede Mantashe, for a Request for Information on alternative generation options is a significant step in the right direction. 

Allowing municipalities and other significant users to procure electricity directly from independent power producers (IPPs) will take pressure off Eskom’s immediate supply crisis as well as create a new revenue source for Eskom. Although the IPPs will be independently owned and operated, they will be charged a ‘wheeling’ fee for the use of Eskom’s transmission lines and distribution network. The City of Cape Town and the Minerals Council of South Africa have both independently supported this proposal and have requested that the Minister issue Section 34 determinations as soon as possible.

The second item on President Ramaphosa’s agenda must be to address the deep and abiding need for economic justice in South Africa. Despite the extensive gains made by the ANC government over the past 25 years in terms of service delivery and equal access to education and healthcare, many South Africans remain impoverished and jobless. The main reason for this is that our economy is structured for unequal growth. Despite the solid growth experienced by the economy during the later 1990s and early 2000s inequality remained stubbornly high. On our current low growth trajectory, it is likely to get worse. 

This vast disparity between the haves and the have-nots, and those with jobs and without, is fundamentally unjust, but it is also a real risk to the social compact. As much as we would wish it were different, we can no longer avoid the fact that this is a direct result of poor policy and an indirect result of ambivalence when it comes to the plight of the poor. The awful truth is that we have an economy that is structured for big corporations to thrive and small business to fail – and this urgently needs to be addressed. President Ramaphosa can no longer wait to reduce the red tape that is hampering small and medium-sized businesses, reduce the burden of compliance and put in place real incentives that promote inclusive growth. 

Thirdly, South Africans want an end to endemic corruption in all areas of public life. It doesn’t matter if you are senior management in corporate SA or unemployed and living in an informal settlement; corruption affects everyone. Simply put, we cannot afford for unproductive sectors of society to benefit at the cost of the rest of society. 

If you wanted to take the temperature of how tired South Africans are of corruption, consider the significant support for news that certain municipalities would have their electricity cut until they had settled their outstanding Eskom bills. 

This anger is not directed at the citizens, but rather the officials who it is assumed had received the payments and pocketed them for themselves. Even so, frustration with corruption is so high that many support cutting off electricity to citizens who are not at fault. This is a drastic reaction. Yet under the current circumstances, it is almost understandable. The people want what is owed to them.

Similarly, even as the Department of Water and Sanitation is effectively bankrupt and large parts of the country are without water suffering from an extreme drought, it is unthinkable that a government official has the gall to line their own pockets at the expense of others. Without swift action against those who have benefitted - or continue to benefit - from corruption, we are likely to see a further deterioration in the social compact. 

Last week our Minister of Finance took to Twitter to mobilise support for “deep structural economic reforms” with the warning “Stay as you are and you are downgraded to Junck Status!! The consequences are dire”. This week, at the Business Economic Indaba 2020, Busa positioned the unprecedented crisis we face in our economy as the backdrop to the president’s rambling acknowledgement of the many issues we face.  The list of issues was long.  Unfortunately, the priorities and actions are in a similar place to the workers’ salaries at Luthuli House - deep in the pockets of the ANC and out of reach for those with short arms.

Unless President Ramaphosa is able to deliver even the basics, he is going to struggle to realise the New Dawn he has repeatedly promised.  Perhaps Tito Mboweni’s other recent tweets this week - on legalising Cannabis - is a back-up plan to soften the impact of “Junck Status”.

BUSINESS REPORT 

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