To get jobs back, get the employers back

There’s something I can’t quite grasp about the economic recovery plan President Cyril

Ramaphosa announced on

Thursday. Literally. I listened to him and I’ve read the speech twice and it’s a bit like feeling sand fall through your fingers.

You try to put your hand on a solid recovery commitment and it’s just not there.

And, boy, can he circumlocute!

How’s this: “We are exploring the use of credit-enhancing instruments to unlock bulk-water infrastructure and national roads improvement projects.” What? I hear you cry.

Fortunately, I know the answer. A “credit-enhancing instrument” is a loan guarantee from the National Treasury. Who knew SAA had been flying on credit-enhancing instruments all these years? If the people behind the plan can’t put it into plain language, how are they going to execute it? Obviously it’s all about execution.

I know he means well. But then I read and re-read the promises on energy. “The interventions outlined in this plan,” Ramaphosa said, will “achieve sufficient, secure and reliable energy supply within two years” ... accelerated implementation of the Integrated Resource Plan “should bring around 11,800MW of new generation capacity into the system by 2022. More than half of this energy will be generated from renewable sources.

“In the immediate term, agreements will be finalised with independent power producers to connect over 2,000MW of additional capacity from existing projects by June 2021” and

“the Risk Mitigation Power

Procurement Programme will unlock a further

2,000MW of emergency supply within 12 months”.

Some of this is credible, some not.

Existing renewable plants could probably increase supply to the grid by 2,000MW if Nersa or

Eskom allows it on the grid.

Whether the risk mitigation thingy “unlocks” another

2,000MW in 12 months depends on language. What does “unlock” mean here?

Trust nothing.

And, overall, another 11,800MW into the network by 2022? Pull the other one. Why promise the impossible? It seems so reckless I just don’t get it.

It is no coincidence that, at the end of 2022, Ramaphosa faces an ANC elective conference. He will almost certainly be challenged and he needs a full year of problem-free electricity supply to seal his chances of re-election.

The bigger problem with the plan is that it is built on political expediency. The president may insist that post-Covid marks a special moment for our economy, but he knows his party had brought the economy to a standstill long before Covid came along. It is simply deceitful to argue, as he did last week, that “this [Covid] economic shock is unprecedented in our country, and it will take an extraordinary effort to recover from it”.

We were in a lengthy recession long before Covid struck. We had lost our sovereign investment credit rating. Unemployment here was already the highest in the world. We were already the most unequal society in the world. We needed rescue long before Covid.

You almost get the feeling the Covid crisis was welcome in a way. Too good to waste. “It is an opportunity,” he said, “not only to recover the ground that we have lost over the course of the pandemic, but to place the economy on a new path.” There you have it, a new path. Sound familiar?

“We must get our people back into the jobs they lost in the pandemic,” he said. But if he meant it, then he’d be focusing on reviving broken employers before trying to create more employees again. Horse. Cart.

It’s agreed 2.2-million citizens lost their jobs in the second quarter, but what happened to their employers? Where are Edgars, Comair, Country Life magazine and Volksblad? What about Phumelela, the Prada store, Time Freight, Flight Centre, the Gadget Shop and literally thousands of restaurants, shops and trades?

The only way to create jobs is to encourage employers to run efficient and sustainable businesses. They’ll hire people when there are jobs to be done.

Building infrastructure is smart, but why double down on the worn old touchstone of “creating” jobs? You build it because you should, surely?

Many of the same people behind this plan cheered when former president Jacob Zuma declared 2011 the “year of the job” and proceeded to double the size of the public service, to our eternal cost.

I tried to start a company once and quickly discovered that the moment it turned over more than R1m I would have to register for VAT. So it lies dormant, unloved. But if you raised that threshold to, say, R3m (still an absurdly low number) you’d get back half your lost jobs by Christmas. A simple little tax reform. No need for big speeches and a long list of risky promises.

We were in a lengthy recession long before Covid struck. We had lost our sovereign investment credit rating