By Lunga Mrhetjha
South Africa has a chronic problem of an out-of-touch-with-reality leadership.
All across the board at governmental-level, business, labour and civil society we have these people who seem hellbent on steering the ship in the wrong direction and against a strong tide, instead of opting for smooth sailing.
Why do we like fixing things that are not broken and neglecting the things that need actual fixing?
The latest example can be found in the decision by the financial sector to introduce a new payment system called PayShap.
PayShap, according to the South African Reserve Bank (SARB), aims to increase digital financial inclusion of both individuals and small enterprises by making digital payments more easy and lowering the economy’s reliance on cash.
According to the media release, the launch of PayShap which is being led by BankservAfrica and the Payments Association of South Africa (Pasa), is a crucial milestone on this modernisation path that will foster innovation and increase interoperability.
Prior to this latest “innovative’’ move, digital payments were already a big part of trade and commerce in South Africa. MasterCard’s Payment Index for 2022 found that over 95% of people in the country used at least one digital payment system in the preceding 12 months.
Although in-person purchases still dominate, there has however been a growing trend of customers making use of alternative payment methods.
In the six months prior to September, 2022, an overwhelming 67% of consumers had bought an item online, while another 66% had used apps on their smartphones to make purchases, and an additional 49% had purchased a service through an online subscription.
This then begs the question was there a need for PayShap and how differently will it be from what currently exists in the marketplace?
It does not make sense to continuously diversify payment systems in a country that is plagued with so many social problems which can be traced to its high inequality levels.
People don’t need another method of paying, they just need payments! And these are few and far between since the government decided to freeze the public wage bill, while SARB is continuously raising the repo rate and drying up liquidity at an exponential rate.
We need the money to make payments, not an assortment in the way to pay. Such an exercise defeats the purpose when there is no money to begin with…
The misalignment of priorities occurring in the financial and banking industries is the same as the one that is plaguing the energy sector.
Instead of focusing on economic development and using available resources (coal), we are pursuing renewable energy in spite of the fact of that we have a sluggish economy with high rates of unemployment, low demand, and almost nil productive investments.
The SARB should be compelled to act in the interests of ordinary South Africans by expanding its mandate to include full employment.
Prioritising a new payment system should be the least of our worries right now. Inducing economic activity which will bring about liquidity should be the top priority.
*Lunga Mrhetjha is a writer and activist
**The views expressed here are not necessarily those of IOL or its title sites