REPUB­LIC OF NO CON­SE­QUENCES

In his new book, po­lit­i­cal an­a­lyst Jakkie Cil­liers con­sid­ers where the coun­try is head­ing. In this ex­tract he pre­dicts that, amid con­fused poli­cies and cri­sis man­age­ment, it will take a decade to re­cover from the Zuma regime

CityPress - - Voices & Careers -

Fate of the Na­tion: 3 Sce­nar­ios for South Africa’s Fu­ture by Jakkie Cil­liers Jonathan Ball Pub­lish­ers 288 pages R240

In 2017, South Africa is ap­proach­ing the con­clud­ing phase of what can only be de­scribed as a lost decade. Al­though the seeds of these de­vel­op­ments were planted dur­ing the Mbeki pres­i­dency, it is clear that the Zuma ad­min­is­tra­tion has com­pounded their im­pact, and that of the global re­ces­sion, on South Africa. Lack of pol­icy co­her­ence, poor im­ple­men­ta­tion and lit­tle or no ac­count­abil­ity have be­come hall­marks of the Repub­lic of No Con­se­quences.

For ex­am­ple, shortly be­fore he was ap­pointed as the fourth fi­nance min­is­ter in un­der two years in March 2017, Malusi Gi­gaba proudly an­nounced that the Depart­ment of Home Af­fairs (which he pre­vi­ously headed) had not ap­proved a sin­gle new busi­ness ap­pli­ca­tion be­tween Jan­uary and De­cem­ber of 2016. Gi­gaba, some­thing of a dandy, is now re­spon­si­ble for fa­cil­i­tat­ing South Africa’s fu­ture eco­nomic growth.

A few weeks af­ter his ap­point­ment, on 25 May 2017, an in-depth re­port by nine heavy­weight aca­demics, rep­re­sent­ing in­sti­tutes at the Univer­sity of Cape Town, Wits Univer­sity and Stel­len­bosch Univer­sity, placed Gi­gaba at the cen­tre of a sys­temic po­lit­i­cal pro­ject re­spon­si­ble for the es­tab­lish­ment of a shadow state. The re­port fol­lowed hard on the heels of the Un­bur­den­ing Panel Process of the South African Coun­cil of Churches, which ex­pressed its alarm at a sys­temic de­sign to cre­ate chaos and in­sta­bil­ity, “piv­oted around the Pres­i­dent of the Repub­lic”.

At the same time, Gi­gaba was as­sur­ing in­vestors and busi­ness that he was com­mit­ted to pro­tect­ing fis­cal sus­tain­abil­ity, the in­ten­tion to sta­bilise gov­ern­ment’s debt and tightly con­trol ex­pen­di­ture. He also re­it­er­ated gov­ern­ment’s com­mit­ment to the pro­cure­ment of nu­clear en­ergy at a pace and scale that the coun­try can af­ford. These goals, the pur­suit of ex­pan­sive pop­ulist poli­cies and the need for fis­cal sus­tain­abil­ity, are es­sen­tially in­com­pat­i­ble.

There are many ex­am­ples of in­com­pe­tence and lack of ac­count­abil­ity in gov­ern­ment un­der pres­i­dent Ja­cob Zuma – as well as the es­tab­lish­ment of a par­al­lel state struc­ture where de­ci­sions are in­creas­ingly made out­side of man­dated gov­ern­ment pro­cesses. For ex­am­ple, af­ter the late-night Cab­i­net reshuf­fle in March 2017, Gwede Man­tashe said: “We were given a list that was com­plete and my own view as the Sec­re­tary-Gen­eral, I felt like this list has been de­vel­oped some­where else and it’s given to us to le­git­imise it.”

Un­der Zuma, eco­nomic pol­icy is seem­ingly at odds with in­dus­trial pol­icy and both are un­der­cut by re­stric­tions on skilled im­mi­grants, to give one of many ex­am­ples. Hence, the party speaks left, walks right and con­stantly trips over it­self in its stop-start cat­a­logue of chang­ing poli­cies, re­flected in the com­po­si­tion of a Cab­i­net with over­lap­ping man­dates and lack of co­he­sion.

Min­is­ters reg­u­larly con­tra­dict one an­other on the in­tent be­hind poli­cies and de­ci­sions, and it is un­clear which depart­ment is re­spon­si­ble for the co­or­di­na­tion of which ser­vices, such as the sta­bil­ity and de­sign of the elec­tric­ity grid, or dig­i­tal poli­cies and stan­dards, or the fight be­tween the home af­fairs and fi­nance min­istries on the re­spon­si­bil­ity for cus­toms and ex­cise col­lec­tion with the es­tab­lish­ment of a bor­der agency. Nor is it clear which of the lat­est mul­ti­tude of Cab­i­net com­mit­tees would over­see state-owned en­ter­prises or so­cial grants. Rather than long-term plan­ning, the em­pha­sis is on cri­sis man­age­ment – a sit­u­a­tion only likely to im­prove once Zuma steps down as pres­i­dent of the ANC and the coun­try, and is re­placed by a ca­pa­ble leader and a com­pe­tent, smaller team.

The lack of co­or­di­na­tion has de­bil­i­tat­ing con­se­quences for do­mes­tic and international in­vestor con­fi­dence, be­cause at the heart of the ex­ec­u­tive sits a pres­i­dent un­able to pro­vide na­tional lead­er­ship and a tra­di­tion­al­ist fac­tion that does not pro­ject a growth vi­sion for the coun­try.

In his 2015 state of the na­tion ad­dress, Zuma an­nounced his lat­est eco­nomic res­cue plan, a nine­point pro­gramme for ac­cel­er­at­ing eco­nomic growth and cre­at­ing jobs. The plan could, he an­nounced, boost the econ­omy by an additional 0.8 per­cent­age points in the short term and 1 per­cent­age point in the medium to long term. Eigh­teen months later, when ques­tioned about progress with this plan in Par­lia­ment, the pres­i­dent ap­peared only able to re­call that one of its nine points con­cerned agri­cul­ture.

In 2016, the econ­omy hardly reg­is­tered any growth, al­though prospects for 2017 were slightly bet­ter – at least un­til the March Cab­i­net reshuf­fle un­set­tled the mar­kets, weak­ened in­vestor con­fi­dence and trig­gered three rat­ings down­grades. Dur­ing the 2017 state of the na­tion ad­dress, Zuma fore­cast a growth rate of 1.3 per­cent for the year, only to sink that fore­cast some weeks later with the reshuf­fle, which trig­gered the down­grades. By June, South Africa was in a re­ces­sion.

By late 2016, pub­lic per­cep­tion of the gov­er­nance of many state-owned en­ter­prises, such as South African Air­ways, Denel, Eskom, the South African Broad­cast­ing Cor­po­ra­tion and the Pas­sen­ger Rail Agency of South Africa, was in tat­ters. And it was un­clear where gov­ern­ment pol­icy stood on visas or im­mi­gra­tion, how to pro­ceed with the move to dig­i­tal tele­vi­sion, how to rec­on­cile wa­ter scarcity with the in­ten­tion to ex­pand the agri­cul­tural sec­tor, the fu­ture of re­new­able en­ergy ver­sus nu­clear, and so on.

This pol­icy con­fu­sion is also ap­par­ent in the In­dus­trial Pol­icy Ac­tion Plan of the Depart­ment of Trade and In­dus­try, which is at odds with the New Growth Path of the Eco­nomic De­vel­op­ment depart­ment, and nei­ther share the anal­y­sis set out in the Na­tional De­vel­op­ment Plan, even though it was adopted by the Na­tional Ex­ec­u­tive Com­mit­tee of the ANC, Cab­i­net and Par­lia­ment.

In Jan­uary 2015, the then newly ap­pointed fi­nance min­is­ter, Nh­lanhla Nene, de­liv­ered what Busi­ness Day’s Carol Pa­ton termed “a bru­tally hon­est mes­sage” to the ANC’s in­ter­nal plan­ning meet­ing. Ac­cord­ing to Nene, “in part, the gov­ern­ment was re­spon­si­ble for erod­ing South Africa’s eco­nomic growth po­ten­tial … Among rea­sons of­fered for the gov­ern­ment’s short­com­ings were: weak reg­u­la­tory in­sti­tu­tions, poor ser­vice de­liv­ery, gov­er­nance prob­lems at state-owned com­pa­nies, ex­tended pe­ri­ods of reg­u­la­tory un­cer­tainty and con­tra­dic­tory poli­cies.”

The most im­por­tant in­sight to ap­pear from the leaked ver­sion of Nene’s brief­ing was the view that South Africa is un­likely to achieve more than 2 per­cent growth a year be­fore elec­tric­ity sup­ply im­proved – at the time still con­sid­ered an im­por­tant cap on eco­nomic growth.

It will take sev­eral years, if not a decade or longer, for South Africa to re­cover from the tribal pol­i­tics and in­co­her­ence of the Zuma regime.

In ad­di­tion, the coun­try will soon be caught in an elec­tion cy­cle that is quite likely to be marred by vi­o­lent in­fight­ing within the rul­ing party ahead of its De­cem­ber 2017 con­fer­ence and be­tween ri­val po­lit­i­cal par­ties in the run-up to the na­tional elec­tions in 2019.

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