Powerful interests are holding up government’s agenda and the moment has come for Cyril to face these down
The end of an uninspiring and seemingly interminable election campaign is finally in sight. Once the election is behind us, critical issues that were held in abeyance can hopefully be dealt with. The campaign hoopla has pushed aside pledges made previously that already ought to be in the process of implementation.
President Cyril Ramaphosa announced “urgent” measures in September as part of his economic stimulus package, and there were further commitments in the February state of the nation address (Sona). Instead of pushing ahead with issues such as the licensing of radio frequency spectrum and the promised aggressive infrastructure roll-out, the government has been in a holding pattern over the election period.
Because parliament rose early to allow MPs to campaign, the National Treasury’s Appropriation Bill was not passed. This means that budget allocations will be disbursed only after the new parliament is constituted.
The ANC has also been prevaricating on essential measures needed to turn around and stabilise the embattled state-owned enterprises. In the Sona, Ramaphosa said the goal was to make SOEs fully self-sufficient and able to fulfil their development and economic role.
“Where SOEs are not able to raise sufficient financing from banks, from capital markets, from development finance institutions or from the fiscus, we will need to explore other mechanisms, such as strategic equity partnerships or selling off nonstrategic assets.”
Finance minister Tito Mboweni was more forthright in the budget speech, saying the SOEs posed “very serious risks to the fiscal framework”.
“Funding requests from SAA, SABC, Denel, Eskom and other financially challenged state-owned enterprises have increased, with several requesting state support just to continue operating. Isn’t it about time the country asks the question: do we still need these enterprises? If we do, can we manage them better? If we don’t need them, what should we do?” Mboweni has since been muzzled by the ANC.
It gets worse.
The government apparently compiled a list of noncore assets that could be sold to raise funds. These are assets like unused land and buildings owned by parastatals. But the ANC top six has apparently vetoed any movement in this regard until further notice. Presumably this is until the elections are over, but who knows whether the ANC and the unions will continue to hold the government hostage?
There is also a continued egg dance around Ramaphosa’s announcement that Eskom will be split into three units. Immediately after the announcement, ANC secretary-general Ace Magashule appeared to contradict him. “We agreed at our lekgotla that there will never be privatisation of Eskom. We should not say things in the boardrooms and say different things in public.”
Although Ramaphosa never mentioned privatisation, Magashule warned: “Leaders come and go. The ANC remains.”
Mboweni undertook that there would be tighter conditions on further funding and guarantees for SOEs. He said the R23bn a year allocated to Eskom over the next three years was conditional on the appointment of a “chief reorganisation officer” (CRO).
As reported by this newspaper last week, the Treasury had to take extraordinary measures to rescue Eskom from defaulting on its loans, including allocating R5bn from the contingency reserve. Surely the government cannot continue to function like a mollycoddling mother with drug-addled children constantly overdosing and in debt? But even though everyone knows how dire the situation at Eskom is, both financially and operationally, there are still concerted efforts to thwart the implementation of Ramaphosa’s and Mboweni’s undertakings.
Former Treasury director-general and Absa CEO Maria Ramos is favoured for the Eskom CRO position, but there is antagonism against her from a faction in the ANC and those who bought into the Bell Pottinger campaign to discredit her. Like with other key appointments at SOEs, there is a belief that the government should be run through mass consensus. This situation cannot go on.
The president cannot continue postponing controversial but necessary interventions because he is scared to upset ANC factions and constituencies. It is well known that the resistance is not even driven by ideology or principle, but rather by vested interests. Eskom, for example, is hamstrung by a powerful coalition of interests, including those who colluded to loot it and those who are engaged in an aggressive fightback to regain political power.
The country has been told that after the election the president will be able to show real leadership and take on his opponents.
In a ringing election endorsement this week, The Economist called Ramaphosa a “good man” with a “bad party”. It said the “least bad plausible outcome” of the elections was to give the ANC a solid majority to boost Ramaphosa, “allowing him to shun the populists and face down the mafia within his own party”.
You have read that argument countless times on these pages. Mercifully, the moment of reckoning is now on the horizon. In terms of the shrinking of the cabinet and restructuring of SOEs, Ramaphosa is going to have to kick over the applecart. The danger is that he has already surrendered so much space to his opponents that there are more apples and carts than he bargained for.