Leadership in SA needs to be renewed

● In September 1997 I walked into the Volkswagen factory for an interview for my very first job, as a trainee in public affairs. Unbeknown to me, the current finance minister, Enoch Godongwana, was working furiously with his former trade union comrades, Volkswagen’s management and the national government to save the factory from closure.

Godongwana was the Eastern Cape finance MEC at the time, a former leader of the National Union of Metalworkers of South Africa and a communist. On Wednesday, nearly 30 years later, he stood up in parliament tasked with yet another impossible juggling act at a difficult time. The big difference today is that so many of the problems facing Godongwana are of his own government’s making.

The Reserve Bank had set the prime lending rate at 23.5%. People were losing homes, cars and livelihoods as the economy reeled from the Asian financial crisis.

I was offered the job at R115 per day. I was ecstatic, but there was a condition. If Volkswagen was shut down as planned the offer would fall away. Fortunately for me, the Motor Industry Development Plan ensured I was able to start working.

Volkswagen subsequently won a contract to supply 62,000 vehicles to the UK, providing a critical lifeline to me, thousands of workers and the whole city. I learnt a lesson, one that I fear too many of us have forgotten: the value of social solidarity and working together in the face of crisis.

By 2008 state finances had improved and then finance minister Trevor Manuel had become some kind of Mr Money Bags, bearing social wage increases and bottom-end tax cuts while reducing sovereign debt, along with debt servicing costs and South Africa’s credit rating.

Though still high, unemployment was an enviable 21% compared to the current 32%. It all feels like a lifetime ago. Today the government’s financial position is incomparably worse, while the job of finance minister, frankly, sucks.

At the heart of Godongwana’s problems with this year’s budget is what took place back then. In 2009 Manuel announced a R787bn infrastructure investment package that set off a looting spree we have come to know as “state capture”, with the Guptas leading an army of small “Guptas” at national, provincial and municipal level.

Instead of boasting world-class infrastructure, we now have power stations that still don’t produce enough electricity and a dysfunctional Transnet strangling the economy. Instead of ensuring the best would be appointed to lead and oversee public spending, the ANC’s deployment panel put wolves in the chicken coop.

The outcome is before us: poor state finances, record levels of unemployment and crime, municipalities that cannot serve businesses and homes. Infrastructure is collapsing before our very eyes, strangling local economic development.

Though Godongwana’s tone was upbeat on Wednesday, the news was dire and peppered with bad choices. For example, the budget allocates between R1.6bn and R2bn to the early childhood development grant over the next three years, while nearly R12bn is allocated to education sector wages. This translates to six times more investment in the present than the future.

The minister was at pains to highlight South Africa’s spiralling debt servicing costs, the fastest-growing expenditure item by far. In his own words, the minister said: “Spending on debt service costs is greater than the respective budgets of social protection, health, or peace and security.”

One of the reasons the ANC could make headway in the first decade of democracy was that it had no sentimental attachment to the programmes the National Party had put in place. Today we are the victims of its own dogmas and sentiments. Just like the National Party government, the ANC has placed the country in a death spiral of borrowing to fund white elephants, old loyalties, waste and corruption.

Only a new leadership, with new thinking, unencumbered by ties to old ideological and corruption networks that oppose change to keep themselves entrenched, will solve our problems.

That is not a problem for a finance minister to solve, but a task for the people at election time.