Ramaphosa must get tough

To be an investment destination of choice, we need to resolve the problems that keep investors away from our continent.” Who would argue with that statement by President Cyril Ramaphosa at the Africa Investment Forum on Thursday?

The president has been lauded recently for his positive words, as even the sceptics acknowledge that there has been a sea change from the Jacob Zuma years when business was treated as the enemy of the people, no different to the way the president of the US views the media.

Dial back to earlier in 2018 and the relief when it became clear that the next leader of the country would not be someone called Zuma.

That goodwill, which saw the rand climb to multiyear highs and the country’s borrowing costs drop, was then squandered by a government that is still prone to mixed messages and a lack of consistency.

After a period marked by improving business and consumer confidence, the tone changed in late July when Ramaphosa decided to fall for the EFF’s populist trap and announce that the ANC would seek to change the constitution in order to accelerate land reform.

In the following few months the conversation was dominated by property rights and the rand duly went south.

So it was a similar feeling this past week when finance minister Tito Mboweni’s forthright views on the future of SAA sparked a barrage of criticism from the ANC’s leftist allies, who presumably think taxpayers should throw money at the airline indefinitely.

Just like with Eskom earlier in 2018, when push came to shove, Ramaphosa and public enterprises minister Pravin Gordhan chose ideology over hard, cold reality, leaving Mboweni isolated.

The year started with some optimism that decisions needed to put Eskom on a sustainable path would be forthcoming. CEO Phakamani Hadebe may have been naïve in believing that he could impose a pay freeze at Eskom, but the way that Gordhan forced him to fold at the first sight of resistance and violence from unions was alarming and brought into question whether the new board had the necessary political backing.

Unions will always be concerned with saving existing jobs rather than creating new ones, so it’s not a major surprise that they would instinctively obstruct any steps they see as a threat to the status quo, even if the ultimate cost of no action is bankruptcy for the country.

A government that just says we will keep throwing money at SAA, no matter what, won’t inspire confidence that it will take other tough actions needed to get debt under control.

The reality is that a fight with the unions is unavoidable. Let alone the economics, morally it’s impossible to justify throwing money at SAA when hospitals across the country lack basics such as bed linen and painkillers.

Even the easy things haven’t been done yet. More than a month after the jobs summit promised immediate measures to kickstart the economy, evidence of progress is scarce.

One of the highlights was a vow to do away with Malusi Gigaba’s job-destroying visa regulations that make it harder for tourists to come here, especially those travelling with children. Still, there is no clarity, and an industry that accounts for almost a tenth of output and supports about 13% of total employment is left in limbo.

While the home affairs minister might be distracted at the moment and should probably be put out of his misery sooner rather than later, the rest of the government needs to get on with the job of translating the growth-friendly rhetoric into action.

IT’S IMPOSSIBLE TO JUSTIFY THROWING MONEY AT SAA WHEN HOSPITALS LACK THE BASICS