Will President Ramaphosa finally choose to protect the people, the economy and our democracy?

10 February 2021

Tomorrow, in his State of the Nation Address, President Ramaphosa is going to have to show South Africans that he is in fact the man in charge, and not just another spectator to everything that is happening to our country. Three years into his presidency he is yet to display this kind of decisive leadership, but such is the urgency of our situation that he is going to have to discover his fortitude by tomorrow evening.

We can’t afford an appeaser or a mediator for a president. We can’t afford a president who is so afraid of competing factions in his party that he is unable to act on anything. We need a president who is willing to ruffle feathers. We need a president who is prepared to stare down the enemies of growth and the enemies of democracy in the ANC and the tripartite alliance. A president who is not afraid to do the right thing, even if that could send damaging shockwaves through his own party.

 Our country is facing unprecedented threats on three fronts – a pandemic crisis, an economic crisis and a crisis of our democracy as revealed in the Zondo testimony – and the president is going to have to face all three these crises head-on and concurrently in his SONA. This cannot be another SONA of unattainable fantasies of bullet trains and high tech cities. It cannot be another SONA of announcing impossible projects that sound wonderful but will never be realised.

This has to be a SONA of detailed, meaningful and measurable plans to protect the people from the virus that looks to be part of our lives for the foreseeable future, to protect our economy and set it on a path of growth, and to protect our democracy from those who have subverted it to gain power and wealth. If he cannot do this, then 2021 will be a very dark year for our country.

Protecting the people:

The only way our economy and our society can return to a semblance or normality is through the swift and large-scale acquisition and rollout of vaccines. To ensure this, the president’s SONA announcement will have to cover these points:

Mobilising all resources to ensure universal vaccinations occur on an equitable basis as rapidly as possible, even if it means selling State Owned Enterprises to achieve this. Compared to the cost of continued lockdown – or even just the threat of lockdown – no price is too high and no effort too great. But it is crucial that this money is spent on the public, and not transferred to cronies of politicians.

We will need full transparency around the procurement, distribution and dispensing of vaccines. We have every reason to be very concerned about an opaque and highly centralised procurement and distribution system, and the only way the president can allay these concerns is through full transparency.

Government has to abandon BEE as criteria in the distribution and dispensing of vaccines, and only make use of established, reputable suppliers with track records of delivery, and not companies that were set up yesterday to steal public money under the cover of “empowerment”. BEE was custom made to exploit this type of situation, as we saw too clearly in the PPE scandal.

Government has to fast-track negotiations with all vaccine suppliers so that regulatory approval process can begin as soon as possible. The hold-up is not with SAHPRA or the vaccine suppliers, who will typically only apply for local approval once they have an agreement with government. The sooner government signs agreements, the faster the approval process will be conducted.

All South Africa’s capabilities must be harnessed in the rollout of the vaccine programme, as government platforms alone are insufficient to ensure the fastest possible rollout. The process has to be decentralised so that platforms such as pharmacies, dispensers and medical aid schemes can be utilised.

Protecting the economy:

Even before the pandemic our economy was in recession, but this has been compounded by almost a year of business-killing restrictions, many of which were entirely unjustifiable. Tens of thousands of businesses closed their doors and millions of people lost their jobs.

Economic growth is the only way to create jobs, and if government has any intention of doing so it needs to change its attitude towards business. The private sector is the solution, not the problem. Tomorrow evening President Ramaphosa will need to demonstrate that he realises this, and that he stands on the side of growth and jobs by announcing measures to achieve the following:

Create an enabling environment for businesses to start and grow and thrive:

Energy reform: Eskom has to be split into separate generation, transmission and distribution entities, with the state retaining control of the transmission grid. We need to open the market for electricity generation, and municipalities must be allowed to purchase electricity direct from producers.

Cheaper data: It is urgent that all parties agree on a fair process to auction spectrum. This is now more than a decade overdue.

Cheaper transport – Infrastructure such as our rail network should be opened for shared private and public use, privatised where possible, and certainly federalised – in other words, more control over rail handed to competent provinces.

We need a “Smart” border system where most paperwork is done online before trucks arrive at the border.

Reject investment-killing suite of “central command and control” policies:

NHI: We can neither afford nor manage a programme like the National Health Insurance. What we need to urgently do is fix our hospitals and clinics.

Mining Charter: Mining companies need constitutional security of mining rights and unfettered control over their operations if they are going to invest billions in South Africa. The mining industry could create hundreds of thousands of jobs and contribute billions to taxes and into the economy, and government should do all it can to encourage investment in this sector.

Expropriation Without Compensation (EWC): Instead of forging ahead with this deterrent to investment, we should rather give emerging farmers secure tenure and put more budget and capacity behind the land reform process.

BEE: This is a significant barrier to doing business and it has not made South Africa a fairer or more prosperous country. It has simply enriched an elite under the cover of “empowerment”. Instead we should directly tackle the inequalities of opportunity that create poverty. The only way to include the economically excluded is to grow the economy, grow jobs, grow tax revenue, grow the number of small businesses and grow the number of entrepreneurs, no matter what race they are. Businesses should be incentivised to target their social responsibility activities at the poor.

Asset prescription: Any more talk of prescribed assets will cause capital flight. Government needs to abandon this for good.

Reserve bank nationalisation: It is critical that the SARB remain independent.

Place the small business sector front and centre in the country’s job creation effort. The norm for upper-middle income countries such as South Africa is that 40% of all employed people are either self-employed or employers. In South Africa this is only 20%. This is because small businesses here operate in a hostile regulatory environment designed around large companies that employ thousands of people and have entire departments that deal with regulatory compliance, including their own in-house labour lawyers. There is a direct correlation between South Africa’s very low number of small businesses and our very high unemployment rate. President Ramaphosa should announce:

An increase in the VAT threshold to R5 million turnover

Improved access to start-up finance

A relaxing of labour legislation, except for basic health and safety regulations and notice periods. This should include no minimum wage for firms with less than 25 employees, and bargaining council agreements should not extend to those who were not party to the agreement.

Get debt under control so that we can reduce our interest bill. We are currently spending R1 of every R5 of revenue on interest payments. That will soon become R1 of every R2 unless we pay off debt and bring the cost of debt down by building confidence. Some of the measures that the president should announce include:

Public sector wages must be brought in line with private sector wages through below-inflation increases over the next decade. Our 29,000 public service millionaire managers are simply not sustainable.

Selling once-off assets and privatising others to pay off debt.

Conducting lifestyle audits for all high-ranking public officials.

Renegotiating the Southern African Customs Union (SACU) agreement.

Cutting costs wherever possible. This includes no more bailing out of bankrupt SOEs, bringing our deployed soldiers back, reducing the number of foreign missions, renegotiating leases and dropping VIP protection services.

Reducing the cost of our debt (the interest we pay on this debt) by abandoning the investment-killing policies listed in point 2 above. Each of these policies kills any confidence in our ability to pay back debt, and so we end up paying more for our loans.

 Protecting our democracy:

The recent shocking testimony at the Zondo Commission has confirmed that our very democracy is under attack by forces within the ruling party. The scale of the looting through the State Security Agency, and the scope of “projects” funded by this looting aimed at subverting democracy – from propaganda news reporting to swaying the judiciary – is tantamount to treason.

It is crucial that we see arrests and prosecutions of all those involved. But if we are to truly safeguard our democracy, then the president is going to have to announce measures that will deal with the root cause of this subversion of democracy: the capture of the state, as well as agree to electoral reforms to turn Parliament into a proper watchdog.

The ANC must abandon the project of cadre deployment, which is just another word for state capture. It is unconstitutional and makes a mockery of the separation of party and state. It has bred a culture of corruption, nepotism, patronage, arrogance, impunity and incompetence. President Ramaphosacan’t claim to be committed to building a capable state and still support cadre deployment into non-political positions. It’s one or the other.

Electoral reform: The best way to give Parliament teeth to hold the executive to account is through a hybrid electoral system that combines proportional representation and a constituency system. This will incentivise MPs to be loyal to people rather than just the party, and by retaining an element of proportional representation we can ensure that smaller parties are still represented.

These are some of the announcements the DA will be looking for in the president’s address on Thursday evening. But not only the DA. Many of these same suggestions have been made by others too – from business to civil society and other political parties. This is because they are widely recognised as sound plans and crucial reforms.

The question now is: Will President Ramaphosa finally have the courage to step up and put his stamp on his own presidency? Will he corral whatever reformers he can find in his party and get them to back these reforms? Or will he again choose the path of least resistance, leaving us to face yet another year of platitudes, dithering and economic implosion?

Issued by John Steenhuisen, Leader of the Democratic Alliance, 10 February 2021