Opinion

JUDITH FEBRUARY: SA’s bitter pill of tough economic decisions

JUDITH FEBRUARY: SA’s bitter pill of tough economic decisions

OPINION

What has happened to Finance Minister Tito Mboweni's aloe ferox?

In February, Mboweni was upbeat as he entered the House bearing a little aloe ferox plant and armed with quotes ranging from the Bible to Pliny the Elder.

On Wednesday things felt different, partly because they were different. Mboweni cut a rather lonely figure as he tabled South Africa’s Supplementary Budget necessitated by the COVID-19 pandemic and the unusual times we are in.

In February he seemed rather more upbeat despite the economic news he was bearing.

The pandemic has laid bare many things - our country’s governance failures, its leadership gaps within ministries and a near-incapable public service. It has also laid bare - as if we needed any reminding - of the economic devastation of the Jacob Zuma years.

Almost a decade of looting and institutional hollowing out now sees South Africa with unrestrained debt and a begging bowl in hand.

We do not have the cushion (of sorts) we had when the financial crisis hit in 2008. Now, the cupboard is empty and our unemployment rate sits at 30.1%.

One could not help thinking of the consequences of state capture as former President Jacob Zuma appeared in court again this week. He has a lot to answer for, as do his corrupt associates who have not yet been held to account. For while Zuma, the wrecking ball, is gone, we now all bear the burden of paying to fix the economy.

It’s a bitter pill to swallow and will be for some time to come because there simply is no proverbial silver bullet. But if we are prepared to make the ‘difficult and painful’ political decisions Mboweni talked about, there may be some light at the end of this long, dark tunnel.

Mboweni’s ‘flat’ tone and Biblical injunctions were sobering, even while saying, "things will soon get better…". Our strengths, Mboweni said, were our young people, our institutions and our diverse industrial base. Yet, youth unemployment sits at staggering levels and our institutions need rebuilding. This will take time.

As former Minister of Labour and Governor of the Reserve Bank, Mboweni is no fool and he is acutely aware of what needs to be done to repurpose the state, specifically National Treasury, for its democratic mandate.

If we want to avoid a sovereign debt crisis, we have to act differently. In simple parlance: we have to stop spending money we do not have. We will also need deal with the proverbial hippopotamus - the wide gap between revenue and increasing expenditure. The task is ‘Herculean’; the fiscal reckoning is looming.

The speech was light on details and kicked for touch until the Medium-Term Budget Policy Statement later in the year. In the meantime, progress will need to be made regarding the detail of, for instance, the recapitalisation of the Land Bank, SAA and what seems like the endless saga of business rescue and then state-owned enterprises in their entirety.

The President convened an infrastructure symposium, yet we probably need to stop talking and simply take the hard decisions on bail-outs, on Eskom, on the public service wage negotiations, to name a few. In addition, the public service needs to be held to account in order to ensure proper performance and delivery of socio-economic rights. The lack of accountability, alongside a ballooning wage bill, is simply unsustainable.

Also, what are we to make of government’s latest flirtation with the idea of increasing nuclear power capacity?

Our choices are hardly expansive especially while managing a public health crisis.

Increased funding has been allocated to local government, yet the expenditure of these funds will need to be monitored closely given the high levels of corruption. As Mboweni said, "Municipalities will adjust their budgets to take into account the sharp decline in revenue as a result of the pandemic. We urge communities to hold councils accountable for the spending of COVID-19 funds".

Holding councillors to account is, for many citizens, an endless nightmare as they battle a lack of water, sanitation and absent councillors. Much of that can also be laid at the door of the ANC, the poor calibre of its candidates and its own internal institutional degradation.

South Africa’s socio-economic challenges are profound. Our ability to retain a cohesive society has always been tenuous. This is the case now more than ever before, with unemployment and poverty levels remaining stubbornly high. In addition, as inequality rises, our public discourse has become more toxic and marked by deep-seated anger from those who are poor and marginalised.

Consequences are in short supply in South Africa. The recent arrests of VBS Bank officials provides a glimmer of hope in the battle to deal with various aspects of state capture. Yet, those who colluded with Zuma still walk free.

One cannot help but think that a few high-profile arrests would send a very strong signal to South Africans that there are consequences even for those who wielded power before. It might also help deal with the high levels of cynicism many have when they hear Mboweni and Ramaphosa talk about a new inclusive economy. That has seemed more elusive than inclusive for the past decade.

In February, Mboweni noted, while pointing to his plant: "Our aloe ferox can withstand the long dry season because it is unsentimental. It sheds dead weight... We know South Africans are resilient and as a country we have endured many ‘long, dry seasons’.”

The question is whether Mboweni’s boss, the President, can match our resilience with an equal lack of sentimentality when it comes to taking difficult economic decisions?

Thus far, we are yet to see overwhelming evidence of a lack of sentimentality.

Judith February is a lawyer, governance specialist and Visiting Fellow at the Wits School of Governance. She is the author of 'Turning and turning: exploring the complexities of South Africa’s democracy'. Follow her on Twitter: @judith_february