Let the electioneering madness begin
An emotional roller coaster of madness is about to begin. We will have five months of this and then perhaps another month of the groundhog day of metro council horse trading, though with the novelty of it at national level, where the stakes are rather higher.
We will have to contend yet with a wave of fake news, and campaigning (and policymaking) divorced from reality. Much of this doesn’t matter and is the usual rhetoric of overclaiming — for instance, not lasting jobs being created but job opportunities in which someone waves a flag for a day and a different person the next day, and this is counted as two jobs.
Other things are more dangerous, such as Jacob Zuma’s nonsensical rant against the way votes are counted in SA. This is from a man elected twice from what he now deems a flawed process.
Depressingly, large swathes of the media may be of limited help cutting through this — judging by the diabolical reporting standards on polling we’ve seen in the second half of 2023. Similarly, the faux outrage headlines about the start of load-shedding in January as somehow a surprise revelation — what is really an exercise in hugely mismanaging public expectations.
We might as well all go on holiday in the second quarter given the lack of work that will go into advancing reforms (though the first quarter will be slow anyway).
And I am supposedly an optimist about 2024. (I’m still a fair way above consensus on growth for the year, even with so much drama.)
Some very interesting things are going to happen this year, however.
First, new visa regulations will be gazetted shortly, which will start the more fundamental process of allowing skills and productivity to be imported to the economy to boost growth rather than the prior obsession with key skills only.
The system is fundamentally about change for the better, including preferred corporates for fast-track visa processes, an idea that has received good feedback already.
Second, we may finally get a board for the National Transmission Company (NTCSA), a far more important event perhaps than the appointment of the new CEO of the holding company of Eskom. This will allow independence and Chinese-walling of key aspects that the NTCSA will have to undertake to plan, procure (for power and transmission) and manage the system not just in the short term but long term too, under the new Electricity Regulation Act.
It is notable that not once after the appointment of new CEO Dan Marokane — due to start work in about March — did anyone comment on his ability to actually manage the unbundling not as a technical process but as a complete and fundamental mindset change.
This is why the NTCSA board is so important — to safeguard the new mindset against political interference and micromanagement tendencies as market forces emerge and are marshalled by the NTCSA.
Third, talking of mindsets, we will finally get the publication of the Freight Logistics Roadmap. We must be careful — the level and depth of reform in this document are huge and complex and will take a decade to fully implement. However, at its core it is a deep mindset change that its authors saw as the only viable way forward and the cabinet at the end of last year agreed to.
This cannot be overstated. The cabinet agreed with a fundamental shift away from the mindset that Transnet was the logistics industry to a disaggregated view where
Transnet becomes the marshal of various parts of the system overseen by new, invigorated regulatory structures and the private sector drives the productivity of the sector — in ports and rail and beyond.
Other things are more uncertain — for instance, there might well be an ability to entirely recast the nature and structure of central government after the elections — though work on this plan has proven to be haphazard and has not got wide-scale buy-in from the ANC or the government (indeed, there is some pushback).
The temptation to readily scatter deputy ministers and various structures and ministries after the elections might prove too much of an easy way out.
We have seen what happens when mindsets go wrong. Some call it a stuck ideological zipper on the economy.
The draft new Integrated Resource Plan (IRP) last week shows a complete lack of understanding by the department of mineral resources & energy of where the sector is actually meant to be going in response to its own Electricity Regulation Act, climate change and the government’s own climate bill, things such as the Carbon Border Adjustment Mechanism (regardless of whether you think it’s right or wrong), electrification of new sectors and the availability of financing for different technology types.
As such — despite reading it many times now — you are left scratching your head as to what exactly it’s trying to solve. It is simply true that IRPs dished out by the government have now become almost irrelevant.
Yet IRPs still dictate the pace of government-procured power (this IRP seems to underplay the pace needed from a reformed Renewable Energy Independent Power Producer Programme) while it also distracts with far more gas power than needed beyond 2030 (that will be financeable — that window is closing slowly but surely). IRPs are also important signalling mechanisms to the private sector for whether the government “gets it”.
This IRP says the government fundamentally doesn’t get it — as a deluge of fact- and data-based responses to the public comment will show in the weeks ahead.
All the above taken together opens up an interesting question for the second half of the year.
Coalition partners will have a great deal of power after the election, if as expected we have a hung parliament. They will sit in the cabinet and have the opportunity to shake it up from its current moribund state.
What will these coalition partners do with that power?
The answer from the metros is “not much” (or at worst they will have paws in various places they shouldn’t).
Yet, this surely is a challenge in a proportional representation system — what will you do with this new sort of power? Does mad policy get called out? Are mindsets shifted, are there hard arguments and the long slog of shifting things?
This certainly isn’t to say that there are no reformists in the government. They are there pushing the positive steps described above. However, we have seen that realisations such as the acceptance that stateowned enterprises aren’t working need the lifespan of an entire administration to grow (five years, to be generous, though more like 30 years).
Whether coalition partners can short-cut this process is the challenge of 2024 and the optimistic upside that might exist (possibly, maybe).
THE TEMPTATION TO SCATTER DEPUTY MINISTERS AND VARIOUS STRUCTURES AFTER THE ELECTIONS MIGHT PROVE TOO MUCH
Attard Montalto leads on political economy, markets and the just energy transition at Krutham, an SA research-led consulting company.