Que Sona, Sona, whatever will be, will be
THE THING IS TO FORCE RAMAPHOSA TO ACKNOWLEDGE REALITY. HE’ SA WRIGGLER AND WE HAVE TO MAKE WRIGGLING IMPOSSIBLE
Ican’t wait to not watch the state of the nation address (Sona) on Thursday night. I can’t bear the prospect of listening to President Cyril Ramaphosa skirt around the obvious again. I know why he does it. I even sympathise with why he may to do it. But I don’t have to listen to it.
Nor do you. We’ll know Ramaphosa’s making actual progress when minerals & energy minister Gwede Mantashe actually licenses a new independent power producer or allows a company generating power for itself to actually release it onto the grid. Until then it is all rubbish.
Yes, yes, there is some reform. We haven’t left the International Criminal Court, unions have to hold secret strike ballots and the revenue and prosecuting services are beginning to recover. But their destroyer, former president Jacob Zuma, never kept a promise in nearly a decade of Sona speeches and, as far as I know, nor has Ramaphosa yet.
Ramaphosa should keep it short (I think this was my advice last year as well, which was ignored), thank people for coming, tell them he’s trying his best but it’s all terribly difficult, and hand out a long list of projects he’s planning to launch in the near future.
But because Ramaphosa is stranded in the desert, becalmed in a windless sea, or whatever, there’s barely progress. Voluntarily putting SAA into business rescue and yet now directly interfering in its outcome is so amateurish it takes the breath away.
But Ramaphosa’s actions are entirely political. They were before last year’s election and they will be until the next one. Where he can, he’s dropped a good appointment here and another one there. But when SAA’s court-appointed business rescue practitioners cut all SAA routes from Johannesburg to Durban, Port Elizabeth and East London, the premiers of those provinces were on the phone instantly, calling in favours for their support: because they’re the people Ramaphosa listens to, even though he knows they mostly talk nonsense. They’re his team: KwaZulu-Natal, Eastern Cape, Mantashe, Cosatu and Pravin Gordhan, who thinks Cosatu’s plan to have R250bn of Eskom debt shifted on to the Government Employees Pension Fund (GEPF) is an excellent idea. the core #CR crew. They’re the ones preventing reform, not the old Zuma crowd.
But there’s always hope. The thing is to force Ramaphosa publicly to acknowledge reality. He’s a wriggler and we have to make wriggling impossible. On Wednesday, one way became clear when Solidarity, the conservative union, issued a statement warning Ramaphosa that if one cent of its members’ pensions were to be used to bail out a state-owned company they’d head for the courts, and urgently. And this time the target would be Eskom.
It was because Solidarity threatened to go to court to put SAA into involuntary business rescue that the government stepped in and did so itself, distorting the outcome by drip-feeding more than R5bn to the airline in less than a month. Having spoken to Solidarity leaders, I’m pretty sure they’d do it again if SAA comes out of rescue still needing state assistance.
In a letter sent on Wednesday to the boards of both the GEPF and the Public Investment Corporation (PIC), which invests for the GEPF, Solidarity’s legal team tells trustees and board members of both that they “should not accept the controversial plan to finance Eskom from the GEPF. If Solidarity does not receive such a guarantee, or if a decision is made to implement the controversial Eskom plan, Solidarity will take further legal action, which may include urgent legal assistance.”
It said it would hold “individual trustees and board members” personally liable for damages if they breached their fiduciary obligations, their mandates being to act in “the best interest of the client”.
“In no way can an investment in a totally insolvent enterprise be in the best interest of the pension fund member,” the union said. So there’s a little reality to skirt around during the Sona. We’ll see the Cosatu Eskom debt proposal collapse and exit stage left, possibly to be replaced by a woolly promise of a “common effort” by the social partners, including unions and business, to find a way forward.
But there isn’t a way. There’s no side door. There’s only what is real — approaching R1bn a day in debt interest payments. Watching the state mugging the development bank for money to pay to SAA and its enthusiasm for raiding workers’ pensions may even be hard evidence that the state itself is insolvent already.
The government and the ANC must know this. They have less and less money. As companies report losses, they don’t pay taxes. Skills are leaving the country. At some point paying the monthly welfare bill will become a problem. It may already be. It is R16bn a month and it has to be paid. If one day there’s no money left for that on the first day of the month, all hell will be let loose on and in the ANC.
Are they ready for it?