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opinion
You’re probably starting off on the wrong foot when your important speech is a week late.
Twitter’s Finance Minister and Chef de Cuisine Tito Mboweni may wish he could cook the books when he presents his Medium-Term Budget Policy Statement (or ‘mini-budget’) on Wednesday. Mboweni wrote to the Speaker of Parliament, Thandi Modise, requesting an extension of one week until October 28.
As a precursor, President Ramaphosa presented his Economic Recovery Action Plan to Parliament last week. He was optimistic even though the odds are decidedly against a major South African post-COVID recovery. Ramaphosa declared energy security in two years (on this, it is encouraging that Eskom CEO Andre De Ruyter appears to be doing an effective spring cleaning and there is real hope for a change at Eskom), 800,000 job opportunities by March 2021 and then R1 trillion of infrastructure investment until 2024. It all sounds good, but we’ve really heard it before. Ramaphosa talked a lot about “implementation”, always the Achilles heel of South Africa, given the general dysfunction within the state.
A large part of the plan was stitched in Nedlac, albeit with a distinctive “ANC flavor.” At Nedlac, the social partners were interested in agreeing on a plan that would restore business confidence and tackle corruption head-on. The plan, Ramaphosa said, will induce the private sector and others to invest alongside us (the government). “This plan will unleash the ability of the private sector to create jobs.” The plan, promoted by the Presidency itself and whose axis is massive employment, has also been well received by Cosatu.
As always, the devil will be in the details and therefore all eyes will be on Mboweni on Wednesday afternoon as he delivers the ‘mini-budget’. It sets the government’s priorities for the next three years and proposes allocations to different departments, as well as provincial and local governments. It also provides an update on government finances and economic growth, and makes emergency spending changes.
In earlier, more stable years after apartheid, MTBPS was largely an underrated affair with some adjustments to the budget. The entire process is aimed at ensuring maximum budget transparency (something South Africa has been renowned for) and was a process based on painstaking number processing within the National Treasury.
In February, Mboweni was optimistic when he entered the house with a small aloe ferox plant and armed with quotes ranging from the Bible to Pliny the Elder. And then the global pandemic hit and the ensuing economic devastation. Of course, South Africa was in dire economic straits even before the pandemic.
Listening to Ramaphosa describe our ‘strained finances’, one couldn’t help but think that, in large part, we are reaping the consequences of a decade of state capture. Former President Zuma, while his victimization is good science, has a lot to answer for, as do his corrupt associates who have yet to be held accountable. Because while the wrecking ball Zuma is gone, now we all carry the burden of paying to fix the economy. There was talk of high-income people paying a “solidarity tax” to increase state coffers. In ‘solidarity’ with whom? The corrupt and irresponsible who shamelessly still flaunt the profits from state capture?
Since the kitten is naked, the bitter pill to swallow is that scratching our way back will take time. There simply is no proverbial magic formula.
Our strengths, Mboweni has said repeatedly, are our youth, our institutions and our diverse industrial base. However, youth unemployment is at staggering levels and our institutions must rebuild. This will take time.
Any finance minister needs credibility, a strong revenue collection service, and an equally credible National Treasury. Both the Sars and the National Treasury have been seriously weakened over the last decade. Edward Kieswetter, the new Sars Commissioner, has been working feverishly to rebuild the institution, but again, that too will take time.
And then we have state-owned companies that represent an additional drain on our finances. Of course, not only Eskom is a drain on the fiscus. SAA is in immediate crisis and then there is Denel, SABC, Prasa and a long list of associated corruption and mismanagement.
South Africa talks too much and does too little. Surely the time for endless discussions on economic policy is over? The challenge is whether the ANC, caught up in factionalism and division and addicted to the depression of state-owned companies, sees this. As a former Labor Minister and Governor of the Reserve Bank, Mboweni is no fool and is well aware of what must be done to reuse the state, specifically the National Treasury and other democratic institutions, for its democratic mandate.
When he comes to Parliament this week, the question will be whether his colleagues in the cabinet and, more importantly, his comrades within the ANC, understand the seriousness of our economic crisis. While Ramaphosa may have been optimistic last week, his recovery plan has a “ last chance hall ” feel to it.
Judith February is an attorney, governance specialist, and a visiting fellow at the Wits School of Governance. She is the author of ‘Turning and Turning: Exploring the Complexities of South African Democracy’. Follow her on Twitter: @judith_february
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