Mboweni’s bold economic philosophy slowly gains traction in his party

Tito Mboweni was mocked for rocking up for an ANC press conference in worn shoes. He looked uninterested throughout the post-executive committee briefing, but he shouldn’t be. From the look of things, his bold economic philosophy is starting to gain traction in the governing party. This is a good thing, because if there is consensus on economic direction in the ANC, we might finally see the kind of action that brings structural changes to our macroeconomic framework. The ANC is aware that the country needs to turn around its economic performance as rates of investment remain low. Its highest decision-making body between conferences understands that the “overarching objective of economic policy remains to build an inclusive economy by stimulating growth, investment and job creation”.

It therefore agreed to develop a policy package that contains economic reforms that promote growth and have medium- to long-term impact. These growth-enhancing reforms include:

● Modernising network industries such as energy, transport and telecommunications, making them cost-competitive;

● Increasing competition and lowering costs and barriers to entry for small business;

● Refocusing industrial and trade policy to promote competitiveness; and

● Promoting export opportunities and enhancing growth opportunities in Africa. The ANC also acknowledges that its government’s mismanaged SOEs are an albatross around SA’s neck, choking the life out of the economy.

It said other priority areas include the restructuring of Eskom, dealing with its unsustainable financial position and tackling the poor financial position of South African Airways, Denel and other SOEs.

The problem, though, is we have heard all of this before. Ratings agencies, global and local lenders, economists and the economic bureaucrats at the National Treasury have warned that Eskom’s unsustainable debt poses the greatest single risk to our sovereign credit rating. Mboweni has suggested selling off its cash-burning coal-fired power stations and using the money to pay off the utility’s R450bn debt. That is a great idea, but will the ANC’s alliance partners allow that to happen? We doubt that very much.

In the meantime, the ANC has finally agreed to sell an equity stake in SAA. It concedes that it makes no sense for the state to operate a loss-making airline, using money that we don’t have to bail it out year after year. The misguided ideologues who kept arguing that SAA was a strategic asset — some while benefiting from free business class seats on the national carrier — have finally been silenced. That is progress, even though it has come too late. Elsewhere in this newspaper we report that SAA Technical — a once solid division that at its height serviced planes for a range of carriers throughout Africa — is in such a shoddy state that it is putting the safety of passengers and crew at risk.

The state has proven that it has neither the capacity nor the expertise to run an airline. It is time to bring in people who can.

The message to the ANC, however, is that we cannot afford to wait another 25 years for such progress. The government must be instructed to conduct a study of all SOEs to determine which ones are strategic and which ones aren’t. Those that we don’t need must be disposed of and the money diverted towards our developmental objectives.

The time for talking, statements, speeches and grandstanding is over. This is also not the time for petty political disagreements and ego clashes. If a policy proposal is good for the country but upsets any of the hangers-on in the ANC’s unworkable alliance, the country must take precedence.

The sooner Mboweni is able to convince Ramaphosa to let him take bold decisions in the interests of SA, the sooner he can put those worn shoes to good use on his farm.

To the ANC: we cannot afford to wait another 25 years for such progress