‘Premortems’ can help SA get more things right the first time around

Let’s apply more stringent reality tests and rigorous analysis to decisions not yet finalised

The SA economy is struggling to ensure that tailwinds will prevail over headwinds as the 2024 economic year unfolds. Good news is vying daily with bad news for dominance, especially with another difficult budget due in February and watershed national elections looming. Yet, in unpacking several of the key global and domestic factors that have shaped investment and growth trends in the SA economy, the one universal element remains the strong presence of “policy uncertainty”. For several years hardly any economic assessment or media release from international or local financial institutions, business lobbies, financial journalists, think-tanks, economists or credit ratings agencies has appeared without the inclusion of the words “policy uncertainty” in them.

Indeed, in 2016 policy uncertainty had become such a significant part of the economic debate that the North-West University Business School designed a quarterly policy uncertainty index for SA to calibrate the phenomenon. For most of its existence the index has been in negative territory, with implications for business confidence and the investment climate.

In 2024 the dynamics of SA’s political economy are again not only a defining moment for reassessing the negative role of persistent policy uncertainty but, more importantly, to ask: what options are available to ameliorate uncertainty and improve the quality of policy decision-making and implementation after the elections?

We know that after events such as the state of the nation address, the budget and other important policy announcements, there will be the usual robust “postmortems” by economic and political pundits on the decisions taken. But by then the final decisions will have been taken, for good or ill, and regrets and recriminations will arise only when it is usually too late. What interrogative and critical filters may be missing to make for better policy and implementation outcomes? Can SA get more things right the first time around in future?

There should be more scope in SA for what has been described by economist Daniel Kahneman as “premortems”, that is applying more stringent reality tests to decisions not yet finalised. If wellused and properly sequenced, such interrogations are always a valuable aid to good governance.

There have been too many well-intentioned but ill-considered policy proposals, draft legislation and official statements that crash around us like a lot of dropped trays.

For SA the risk and cost of getting it wrong while trying to do the right thing has become extremely high, of which National Health Insurance is just one example. The challenge could be put to a senior group of political or bureaucratic decisionmakers as follows: “Imagine we are a year in the future. We’ve implemented our decisions as they now exist. The outcome was a disaster. Write a brief history of the disaster.”

Doing more rigorous analysis will encourage future high-level decisionmakers to search for dangers or threats that may have been overlooked when original policy or project proposals were being formulated. We know that in seeking inputs on policy SA has not been without recourse so far, given the multiplicity of “advisory” structures that have been established over the years.

Leaving aside for now parliamentary hearings, Nedlac and other public consultations, according to Unisa’s Prof Jo-Ansie van Wyk President Cyril Ramaphosa has in the past five years created 110 commissions, advisory councils, funds, initiatives, programmes, summits, task forces and war rooms. Have these interventions helped or hindered the search for coherent policy decisions and effective delivery in SA?

The degree of duplication, overlapping and conflicting advice has instead made for considerable confusion and uncertainty in policymaking. University of Cape Town professor Anthony Butler has said “Ramaphosa may soon need an advisory council to help him steer between their conflicting diagnoses”.

Unfortunately, at the end of the day too much of this often useful but diffused input seems to have fallen on stony ground. The lesson is that coherent and co-ordinated policy-making is not well served by unstructured, unmandated and often ad hoc advice.

It is particularly disappointing that two major instruments of advice to which SA has been committed for some years have not been given the overarching primacy they needed to strengthen the role serious “premortems” must play in policy formation in SA. Their key inputs should have more visibly and tangibly informed decision-making at the highest level.

The first is the National Planning Commission (NPC), which initially produced the National Development Plan (NDP), to which the government has been committed since 2013. At its launch former president Jacob Zuma even said “the NDP trumps all other plans”. But in reality the NDP has never seemed to be the central planning driver of official policy. Instead, an elevated level of policy uncertainty in fact now exists.

The NPC has nonetheless regularly updated the NDP as a “living” document and recently highlighted the extent to which SA is failing to meet its socioeconomic targets. The concerns around policy uncertainty would be greatly allayed if the political leadership once and for all confirmed the primacy of the NDP as an overriding, long-term document that extends beyond the electoral and short-term business cycle to form the framework of future policy creation. The continued important role of the NPC would then aid a future government by creating real, verifiable, objective measures to increase confidence in the targets set.

The second major disappointment was the failure to use regulatory impact assessments, now called socioeconomic assessments, more vigorously over the years to test legislative and regulatory proposals in advance. Regulatory impact assessments were originally accepted by the cabinet in 2007, and the then deputy president was put in charge of it. In 2013 the NDP recommended that regulatory impact assessments be done on all new regulations. Had assessments since then been more widely and consistently used in shaping policy decisions, many policy shocks and their negative economic consequences could have been avoided.

If there is one cross-cutting mechanism that encourages evidence-led policies it would be the extensive use of socioeconomic assessments. “Prevention is better than cure” should be the adage for all countries. Potential collateral damage and unintended consequences are the bane of policy-making the world over. But the economies that make the fewest mistakes, or correct them soonest, perform better economically.

That is what SA needs to ensure that its global competitiveness is strengthened and that it is a preferred investment destination. The postelection period will still need to see expedited economic reforms, including getting the policy uncertainty index well into positive territory. Whoever governs the country will need to manage these challenges more successfully by mobilising decisive inputs.

Most of the expected post-election configurations in SA would find the updated NDP offers the necessary policy direction, assuming the future national agenda includes a strong desire to create an economic environment that is conducive to job-rich inclusive growth.