Who will step up to lead from the front?
It was a chilly July in 2015. For months certain ministers in former president Jacob Zuma’s Cabinet were on tenterhooks as rumours of a far-reaching reshuffle of the executive swirled.
The July ANC national executive committee (NEC) lekgotla was particularly tense. Then-finance minister Nhlanhla Nene presented a document to the lekgotla titled Economic Outlook and Fiscal Policy Challenges. A sombre Nene sketched a bleak picture of SA’s economic growth prospects for the next two years.
He told the ANC’s top brass that slower domestic economic growth was not temporary but the “new normal ”— startlingly, he acknowledged that the government was “partly responsible” for eroding SA’s growth potential. The budget for the next two years would be tight, he said, and government’s fiscal position depended on economic growth. Critically, if it remained in a “low growth trap” the state’s finances would become increasingly tight.
The public sector wage agreement that had been signed recently meant funds would have to be stripped from elsewhere, depriving key areas such as basic services, health and education. He warned the state would not be able to create jobs at the pace it previously had and warned of social unrest and political consequences.
Five months later Nene was removed and replaced with “weekend special” finance minister Des Van Rooyen. SA has not yet recovered from the economic chaos that ensued. Three months after that, the state capture narrative emerged from the shadows with deputy finance minister Mcebisi Jonas’s public revelation that he had been offered Nene’s post and a R600m bribe.
SA has moved forward since then. After Zuma’s Treasury carousel of four finance ministers in two years to further his capture project, Nene is back at the Treasury's helm. The same Nene who three years ago warned that SA was on a dismal economic growth path.
The leadership who were in the room when he made that ill-fated presentation included then deputy president Cyril Ramaphosa. Many are still members of the NEC. Yet only after shock GDP figures of the first quarter and another very bleak unemployment report did the party decide a “stimulus package” was needed to boost growth, the details of this have yet to come. It is doubtful SA can even afford such a package.
While ANC economic policy chief Enoch Godongwana has come under fire from Zuma loyalists on social media for his comment that the current “mess” is due to economic mismanagement on his watch, he is not wrong.
But his confidence that Ramaphosa and Nene are well placed to turn things around and ensure we do not experience another quarter of negative growth is questionable.
It is clear Nene and Ramaphosa knew the state of the economy when they took office this year. Yet the state still dithers in response to an economic crisis that can be neither denied or ignored.
Ramaphosa has said his leadership style is to take those he is leading along with him. But the current situation demands that he lead from the front. Negotiated solutions are all very well, but he is clearly never going to keep everyone happy in his fractured party. Nene must step up, especially since his boss seems so hesitant to take the lead.
While it is correct to blame Zuma for the country’s economic woes, he and his clueless backers cannot continue to be the reason the country fails to achieve its potential. The ANC endorsed the National Development Plan at Mangaung in 2012, but then allowed Zuma to run amok. Necessary transformation of the economy was turned by him, his family and benefactors, such as the Guptas, into something else entirely — self-enrichment.
The crisis in mining in 2012 and 2013, protracted labour unrest, the hollowing out of key state-owned enterprises and institutions central to the country’s economic health such as the SA Revenue Service (Sars), all ballooned under Zuma and were ignored by the ANC.
The nation heard last week that the value added tax increase was only necessary due to the mismanagement of Sars, which led to a R50bn revenue hole in 2017/18. And the full ramifications of the upheaval at the tax agency have yet to be felt, despite the removal of Tom Moyane. His lieutenants remain in the top leadership at Sars and are hellbent on continuing his project to keep Sars in limbo.
Government guarantees of SOE debt as a result of this mismanagement have reached scary levels. Economic policy under Zuma was nonsensical, clumsy, confusing and frankly corrupt, and the least Nene and Ramaphosa can do now is provide clarity. But the government is once again taking the deer-in-theheadlights approach as the ANC plays the blame game.
The correlation between economic decline and electoral losses are well documented globally, as Godongwana noted, and SA is no exception. The ANC will fight the 2019 election with the weight of economic failure on its back should it fail to act. The Zuma scarecrow is gone. It is time for the ANC and the government to shrug off its legacy and stop using it as an excuse for inaction.
NENE MUST STEP UP, ESPECIALLY SINCE HIS BOSS SEEMS SO HESITANT TO TAKE THE LEAD
Marrian is political editor.