This past weekend, some of the leading lights in business, government and academia met informally to consider options for driving social and economic change on a sustained basis.
Mcebisi Jonas’s book, After Dawn, served as the basis for discussion. The focus of the discussion included looking at ways in which South Africans can confront the raging storms facing the country, minimise the damage caused by years of State Capture and the neglect of the socio-economic plight of the majority of South Africans, and craft an alternative future based on progressive values and policies.
The problems are well known and include the inability of the state to fulfil adequately its obligations to citizens, economic stagnation, declining investments, a lack of competitiveness, poor educational outcomes, high levels of unemployment among young people, as well as a growing cleavage between the elites and those at the bottom rungs of society.
Other problems relate to failing and debt-laden state-owned enterprises, fiscal risks posed by an underperforming and bloated public sector, and leadership failures across key sectors of society including politics and business. Although it is understood that tackling these problems is not solely the task of government, and that it requires all key societal actors to work together, political leadership has a greater responsibility to play in fashioning solutions.
One of the obstacles to finding the right pathways for change is that the current political arrangement in South Africa evinces a façade of reformism, which insulates it against the public opprobrium that dogged the tenure of former President Jacob Zuma. A great deal of goodwill was generated by the ascendancy to the highest political office of President Cyril Ramaphosa. In particular, there was a huge sense of national relief when the Zondo Commission of Inquiry into State Capture began its work in early 2019. There was hope that those implicated in State Capture would be held to account for their actions and be brought to justice swiftly.
However, the sluggish pace with which the Ramaphosa administration has moved in implementing much-needed reforms has not only spawned widespread disillusionment, it has also emboldened those who have destabilised and deepened corruption within the state. Disconcertingly, it has been difficult to discern a shared roadmap, underpinned by different institutional and economic arrangements, to address the deepening national crisis.
In sketching out options for building a different future, we need to start by forging a national consensus around a vision of shared growth and development. Not only must such consensus be around specific and strategic issues, it must enjoy the support of the state, business, labour and broader civil society. The key question, nonetheless, is whether the pursuit of national consensus is achievable, given the polarised and fractured nature of both the governing party and the wider South African political landscape. The inescapable reality is that our country is locked in a political stalemate. And it perhaps might be that securing consensus can only happen if it is preceded by confrontation.
The role of leadership in driving change cannot be overemphasised. It is clear that without bold and visible leadership the ambitions that the country harbours about arresting economic decline, stemming the tide of joblessness, recasting institutions and overcoming inequalities cannot be translated into reality.
It is no longer enough to blame the machinations of State Capture for inaction and paralysis. It bears pondering whether the African National Congress and other political formations are equipped to address our pressing social, economic and political problems. Given the prolonged stasis and lack of direction about the future, they clearly are not. What South Africa requires is a collective national effort that draws on the wisdom of leadership across political parties, in the business sector, civil society as well as social movements. Such a collective endeavour, based on a common national vision and goals, is vital to extricate our country from the current morass and to fostering national renewal.
Building a capable state is crucial to enabling the government to fulfil its constitutional mandate. The fact, however, is that despite the government’s rhetoric, the ideal of a capable state remains a mirage. South Africa has a bloated public sector that has grown sizably but without a corresponding rise in productivity. The public sector has also lost substantial intellectual expertise in recent years. Tough choices must be made as to whether our country needs a huge and unproductive public sector, or a smaller, professional and efficient public service.
A focus on the state cannot ignore the reality of failing and debt-laden state-owned enterprises (SOEs). Instead of acting as engines of growth, SOEs have served as sites of political patronage, poor governance and corruption. Eskom represents a stark example of the severe threat to national well-being posed by dysfunctional institutions. Fixing the power utility ought to remain one of the most important priorities.
South Africa stands at a crossroads. The absence of a reform plan, failure to grow the economy and alter its structure and ownership patterns, weakening state institutions, ballooning unemployment, as well as a growing chasm between the elites and the poor at the base of society. These are the conditions that make our country ripe for social instability, or even worse.
The time is running out for South Africa. And so are the country’s financial resources. President Ramaphosa and his Cabinet must seize the moment to make hard choices. Some of the choices they have to make are politically explosive, but they must be made, nonetheless. They can make the choices while they have control over policy instruments to manage change, or they can have those choices dictated by external actors such as the International Monetary Fund. The latter, it should be noted, has happened in countries that previously went through periods of economic distress, such as South Korea, Argentina and Turkey.
Reforms are difficult to make, largely because they create winners and losers and require trade-offs. But they can be done and decision-makers need to communicate this with clarity, bring key sectors and constituencies around the table to consider the distributive effects and measures necessary to offset dislocations and shocks and formulate an actionable plan.
Without this South Africa will keep deferring the inevitable until it loses the ability to determine its national destiny. Such failure will create room for populist demagoguery that could wreak further havoc on the economy. And there may not be another opportunity to tackle South Africa’s socio-economic challenges and lay the foundation for national greatness. DM
Mills Soko is Professor of International Business and Strategy, Wits Business School. Mzukisi Qobo is Head of School-Designate, Wits School of Governance.