Economic alarms ringing, but government is deaf

NEWS that South Africa has slipped into recession, recording two successive quarters of economic contraction, will not come as a great surprise to anyone who has been following the goings-on of the three-ring circus that constitutes economic policy direction in the era of state capture.

Although Finance Minister Malusi Gigaba, now established as a central figure in state capture, is ever quick with the denial card, few doubt that the political shenanigans are dealing the death blow to the economy.

Just recently, Gigaba was once again playing the denial game, telling a World Economic Forum gathering that rand volatility was unrelated to President Jacob Zuma’s recent cabinet reshuffle, saying: “It has nothing to do with cabinet reshuffles, because they don’t happen very often.”

His apparently tenuous grasp of the implications for the economy of a reckless government can only worsen the prevailing malaise in which the economy finds itself.

Gigaba and his cohorts in the National Treasury are likely to dismiss any analysis of the economy that puts political uncertainty at the top of the list, offering vague promises of fiscal consolidation (spending less) and a confirmation of policies designed to attract investment.

But it is the political soap opera unfolding within the government and the ruling party that is setting the economy up for disaster, and threatening the livelihoods and future of all South Africans.

On Friday, Moody’s ratings agency, which many in the Zuma/Gupta circle are likely to denigrate as just another “agent” of white monopoly capital, spelt out the extent of the damage being wrought by the politicians. It said: “The risks to growth and fiscal strength arising from the political outlook are tilted to the downside.”

Let none say we haven’t been warned about an impending economic calamity. The alarm bells are ringing. Can anyone in the government hear them, though?