Years of mismanagement leave SA ‘household’ broke

Running a country is a lot like running a personal household. As leader of the household, you have to make sure everyone in it has shelter, education, health care and enough food, and is kept safe. Importantly, you have to make sure you live within your means by trimming spending and cutting your coat to suit your cloth. Failure to be frugal has dire consequences. Unable to meet monthly obligations in full, you borrow to keep up with the spending habits of your household. Borrowing too much negatively affects your credit rating, and soon banks and other good lenders lose the appetite to advance you more credit. You turn to loan sharks, who charge high interest rates, and whose money comes with onerous conditions. If you aren’t careful, you and your family could find yourselves homeless.

Because of its historic challenges, it is an uphill battle for the parent that is the South African government to secure adequate shelter, education, health care and safety for all her children. After years of prudent financial management by previous administrations whose actions were slowly eating away at poverty and inequality, former president Jacob Zuma reversed all those gains. The economy faces strong headwinds as a result of a Covid lockdown now in its 18th month. Unemployment has soared to 44.4%, if you count those who have stopped looking for work. Hunger stalks households. The wage bill of a bloated public service is depleting funds that should go to service delivery and development.

It doesn’t help, then, that the ANC, instead of finding ways out of this malaise, is trying to add to the list of needs. Those who attended its lekgotla last weekend were told in no uncertain terms that the state has run out of cash. It has to find money to bail out stateowned companies that were depleted under the Zuma administration. It has to find ways to pay public servants the 1.5% increases and cash sweeteners they were promised in July. As a result, there is no money for a basic income grant. The idea behind a BIG is noble. However, as attendees at the lekgotla were told, it is simply unaffordable at the moment.

Instead of asking for more cash for the indigent and unemployed, the ANC should be figuring out ways to grow the economy so that they can be brought into it.