Jonas fears that the centre will not hold

It is Tuesday May 16, a characteristically chilly winter’s evening spent at the University of Johannesburg’s Bunting Road Campus. There is a buzz in the air as the 2017 edition of the Mapungubwe Institute’s annual lecture is being delivered by none other than Mcebisi Jonas, two months after he and Pravin Gordhan were ousted from the finance ministry by President Jacob Zuma.

The theme of Jonas’s lecture is Radical Economic Transformation: Are Fiscal and Monetary Authorities a Help or a Hindrance?

Zuma had set the stage for discussions on radical economic transformation in his state of the nation address. And Gordhan touched on that leitmotif in the February budget, while the Black Business Council (BBC) made it its theme for the year.

Business seemed sold on radical economic transformation too, releasing a series of statements in which it agreed on the need to shift up a gear on transformation.

Even Deputy President Cyril Ramaphosa jumped on the radical economic transformation bandwagon, telling a BBC dinner that, for those who were not in the know, “it was time to wake and smell the coffee”.

But what brand of radical economic transformation has been brewing since Zuma’s curtain-raiser on the issue in that fateful February speech?

It helps to revisit that Jonas lecture in May. The hall in which he is delivering his address is filled to capacity, with young and old listening intently to the nearly hour-long speech.

The address is illuminating in various aspects, particularly in its concession that there is indeed a need for radical economic transformation in SA. But there are caveats if the country is to deliver economic emancipation to those most in need of the concept and fulfil its promise of changing the economic status quo.

There is scope, says Jonas, to use SA’s core economic institutions more boldly to drive the necessary change by aligning fiscal and credit allocation to a coherent strategy for inclusive growth. However, the country has to avoid the temptation of populism in its pursuit of this end.

He also urges vigilance against short-term political expediency that will make longterm economic ruin the new normal. Any economic transformation has to be anchored in a strong democratic consensus among the electorate and institutions.

There is consensus among commentators that the economy needs an overhaul, Jonas says, and there is no denying it has to be radically transformed. However, here’s the rub: poor institutional performance is the root cause of dismal economic performance.

The integrity of the country’s state institutions is being compromised for short-term political expediency. And some in leadership positions seem to accept that this should be the case, with disregard for institutional integrity.

Jonas does not name names, but no wild guesses are needed to figure out to whom he is referring. So far, he says, brimming with confidence, the key economic institutions — the Treasury and the Reserve Bank — have remained centres of excellence in a sea of institutional decay and mediocrity. But there will be major economic damage if that ceases to be the case.

Back to today, and Reserve Bank governor Lesetja Kganyago and his team have held the fort and fended off Public Protector Busisiwe Mkhwebane’s misguided attempt to change the Bank’s mandate.

But Finance Minister Malusi Gigaba’s medium-term budget policy statement was nothing short of disastrous. And the head of the finance ministry is no longer the embodiment of institutional excellence.

Could it be that Gigaba’s presence at the helm of this key institution is the kiss of death to the economy?