MISSION RESCUE: GIGABA-STYLE
Jul 17, 2017
The pomp with which Finance Minister Malusi Gigaba announced his 14-point plan on 13 July 2017 went down like the proverbial damp squib.
The piper played to an empty house. Markets were unmoved and the general sentiment was one of “been-there-heard-that”, where is the action plan?
The 14-point action plan, ostensibly to “try to re-establish confidence and to get the economy growing amid the country’s latest recession, further credit rating downgrades on the horizon and mounting job losses” (City Press, 16 July 2017) reads like little more than a fantastical shopping list.
The list reads as follows:
- Fiscal policy
- Financial sector and tax policy
- Leverage public procurement
- Recapitalise state-owned enterprises (SOEs) and address government guarantees
- Broader SOE reforms
- Private sector participation framework
- Costing development mandates
- Postbank licensing
- The Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill
- Mining Charter
- The Regulation of Land Holdings Bill
The substance, depth and detail about implementation, ring hollow, the same when President Zuma captured most of this slate in his 2015 State of the Nation Speech. Ambiguity, vagueness and absence of detail are fast being perfected by the current government, and this plan is no different.
The to-do list is devoid of the political context which has seriously rattled markets and elicited downgrades by rating agencies. Lest we forget, corruption, state capture, cabinet reshuffles and policy uncertainty have directly led to the shrinking of the economic cake. With less to go around, notions of a transformative economy that is growth-driven and inclusive will not amount to much. Aspirations of millions will fall by the wayside and anger at and against each other will result, in a country still grabbling with its apartheid past and where the fractures of the haves and have-nots correlate along racial lines.
J.F. Kennedy’s oft-quoted line in a 1963 speech that “a rising tide lifts all the boats”, bodes consideration. This line was lifted from a slogan of the New England Regional Chamber of Commerce. It so aptly captures the imperative that economic growth and the conditions for such growth for all must reside in an effective government, operating with vision and foresight, which will impact the lives of all - not just a few.
Instead, as Fatima Vawda writes in the Daily Maverick (17 July 2017) “…the minister merely highlighted two objectives; the need for sustainable wage agreements and the finalisation of the infrastructure budget facility. What about fiscal policies that target the recession, inflation and deficit reduction, cutting government spending, addressing the high share of rand-denominated external debt and helping the poor and marginalised? In short, missing are the commitments or initiatives targeting dynamics that have weakened growth, increased fiscal vulnerabilities, exacerbated social and economic inequality and triggered sovereign downgrades. There is nothing to celebrate here”.
Attempting a retreat while the boat is sinking is where South Africa is currently. The boat clearly needs a new captain and a team to revise a course back to calmer waters. Perhaps the bow needs to be turned in the immediate to salvage the wreck that the SOEs are in and avoid a storm that will result from tampering with mining and land.
Grasping the political expediency and upping the ante by betting on notions like radical economic transformation, expropriation without compensation and incendiary racial statements do nothing to bring calm and hope. A vibrant, growing and sustainable economy will offer succour to the millions who still dream of a South Africa where hopes are realised, aspirations met and dreams not deferred. Gigaba’s plan has a long way to go.
Ms Zohra Dawood is Director, Centre for Unity in Diversity