ANALYSIS

Tito Mboweni’s economic plan landed like a political bomb – will it be defused?

By Stephen Grootes 3 September 2019
Caption
Finance Minister Tito Mboweni addresses the media prior to delivering his maiden Medium-Term Budget Policy Statement, 24 October 2018. Photo: Leila Dougan

The real question now may well be what impact Tito Mboweni’s economic intervention plans could have on the situation within the ANC, and whether the divisions within the party may prevent the plan from being implemented in any meaningful way.

It has been obvious for a long time that our economy, and thus our country, is experiencing a series of crises that will not be fixed easily. It has also been obvious to many that the major part of the problem has been political, where the political elites cannot agree on how to move the country forward and what policy to follow. This, of course, has been dominated by the ANC, and the volatile situation within the party.

This is partly why the series of economic interventions proposed by Finance Minister Tito Mboweni landed like the political bomb it is. It was surprising, and important. And has created a huge fuss. Much of this has been predictable. However, the real question now may well be what impact it could have on the situation within the ANC, and whether the divisions within the party may actually prevent it from being implemented in any meaningful way.

So far, the reaction to Mboweni’s proposed plan is probably exactly what he had expected. Cosatu and the SACP have shouted it down, and lamented that there has been a “lack of consultation”. They have probably spent more time criticising the process than they have the actual proposals themselves.

Meanwhile, big business, in the form of Business Leadership SA has welcomed it, while the DA has welcomed it as well.

Then there are several other arguments almost around the edges, around the proposals themselves. Telkom CEO, Sipho Maseko, for example, wrote a piece in the Sunday Times over the weekend criticising the plan’s suggestions on telecommunications.

The next question, of course, is where this plan goes from here, and how will it work out?

From an electoral point of view, there can surely be no bigger problem for the ANC than growing the economy. The party’s own research, its own policy documents, and its own manifesto for the May elections, point to this. Jobs, jobs and jobs were some of the key promises that it made in May. The result, where it fell below 60% for the first time in a national election, shows that the party is possibly running out of time.

To be blunt, if the ANC is not able to create jobs, or at least give some reasons for hope, its time in power might soon be over.

Of course, this has been the case for some time. But it is the internal politics of the movement that has made forming the future economic policy so difficult. Time and time again, the party has held conferences with no definitive economic shift, despite high levels of contestation. The current economic situation has partly been the result of this increasingly more volatile power contestation.

So, is this the crisis that finally leads to reform? Is the ANC aware of just how bad the situation is and can it actually grasp this nettle?

The next point to ponder is how this plan lands within the factional context of the ANC, and whether it will be used by different groups to weaken or strengthen President Cyril Ramaphosa.

Ramaphosa himself has not yet commented on the plan. The extent of his awareness of the proposals is not yet known. Mboweni’s reputation is such that it is entirely possible that he published it with little or no input from Ramaphosa, or that they actually worked very closely together on it. Certainly, Mboweni has confirmed that the proposals had been circulated around Cabinet ministers before they were published, so Ramaphosa must have known that it was coming.

This may give him some political distance, should it all go wrong. Should this turn out to be a time-bomb, Ramaphosa may be too far away to suffer significant damage if it explodes.

However, that might not prevent his enemies from trying to use this plan to damage him.

Key to this, of course, is ANC Secretary-General Ace Magashule. He may well try to suggest that this plan is not from the ANC, and is not the product of ANC manifesto processes, or conference resolutions. This would be a return to his strategy of using Nasrec resolutions to push Ramaphosa into positions that he finds uncomfortable, as he did with the mandate of the Reserve Bank.

Magashule’s options may be slightly limited, however, due to a lack of allies. He might find it difficult to team up with the SACP and Cosatu, which has strongly supported Ramaphosa before. Both groups have said there is a “fightback” against President’s attempts to clean up the state and would find it difficult to form any alliance with Magashule.

It would also appear, for the moment at least, that the SACP and Cosatu do not really have much sway in how the Top Six will see this. ANC Chair Gwede Mantashe has shown signs in the past that he would be more comfortable with something happening rather than nothing, despite his previous job as chair of the SACP. But the key figures might be Deputy President David Mabuza and ANC Treasurer Paul Mashatile. So far, they have tended to side with Ramaphosa on most important issues. This suggests then that they might take his lead here.

In public, it is entirely possible that everyone pretends to be friendly to each other around this plan, with crafted statements about how there is time for everyone to comment, and how economics is something everyone can talk about and should have a view on. It will also help Ramaphosa that Enoch Godongwana is still the chair of the ANC’s Economic Transformation Commission. Godongwana has shown that he is able to control some of the public debate on this issue, and can also be an effective handbrake when needed.

However, there is a reason that the ANC has not been able to make economic policy for nearly two decades, and that reason has not disappeared. It is to do with the very structure of the party, its bid to be a broad church and to appeal to everyone. This is not a problem or a structure that can be done away with easily, or quickly, or ignored. It will come back again and again.

This is precisely why Mboweni has in reality gone over the heads of the party and appealed to the public at large. He will be aware that the vast majority of those who are unemployed aren’t that interested in ANC or Tripartite Alliance processes around consultation. They simply want jobs. This plan, then, at the very least gives him a document to point to to say that something is being done, and he is the person doing it, and people should back him. Business is already doing this (and by implication, also now backing Ramaphosa after some signs that his alleged lack of action may cool that support).

When Mboweni first published these proposals, some of the first commentaries suggested that he was trying to push people into two camps – those who will support fact-based policymaking, and those who follow ideology blindly to the ends of the Earth (or just to Venezuela).

So far, that analysis seems to be holding up. The next big move on this is likely to come from Cabinet. DM

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