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AFTER THE BELL

On choosing roads in the wood

On choosing roads in the wood

Is there a way to fix this all? I don’t know: we look down the road and see choices. The key is not to choose the one less travelled by, but to choose without regret.

One of the characteristics of getting older is that you spend more time wondering about roads not taken. One of the most poignant poems, and one of the most well known, is Robert Frost’s The Road Not Taken. It has, as many will remember from school, this thumping final verse: 

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less travelled by,
And that has made all the difference.

I love the I-dash it makes you pause in the same way that he did, trying to decide which one of the two paths through the wood he should take. But what did he mean? Was he suggesting we should take the unusual road, be adventurous and bold, because after all, it’s the road less travelled by? That’s what it seems, but I know from university studies that Frost is a tricky customer.

The poem is less about choosing the road less travelled and more about a retrospective reconstruction of what happened that day. He imagines afterwards that he took the road less travelled, but the poem itself hints that actually, the roads were more or less the same. It is, after all, called The Road Not Taken rather than The Road I Took. As always with Frost, there is more melancholy than adventurousness.

And I have to say, I have the same bundled mixture of feelings of melancholy and regret when reading about water shortages in Johannesburg. These water shortages are happening all over the country as SA’s infrastructure continues to disintegrate. They are a mirror to potholes, Eskom rolling blackouts, poor policing that results in tourists being shot, and basic claims never being settled.

The story of how this came about has been told over and over again, but just for kicks, let’s go over it one more time. In 2009, Jacob Zuma comes to power and appoints the National Planning Commission. Idiots that we are, we thought he was serious. But actually, the National Planning Commission was a way to sideline people he didn’t know what to do with, like former finance minister Trevor Manuel, who was the first head of the commission.

The commission also thinks this is all serious, and irony of ironies, they do a pretty good job. In no time at all, they come up with a plan. There is just one aspect of that plan that I’d like to raise today, because it’s so emblematic of the entire process, and because it came up again this week: the capital expenditure ratio.


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The Vision 2030 version of the plan says this about investment spending: “Investment spending in South Africa fell from an average of almost 30% of GDP in the early 1980s to about 16% of GDP by the early 2000s. Public infrastructure spending is also at low levels by historical standards. In effect, South Africa has missed a generation of capital investment in roads, rail, ports, electricity, water, sanitation, public transport and housing. 

“To grow faster and in a more inclusive manner, the country needs a higher level of capital spending. Gross fixed capital formation needs to reach about 30% of GDP by 2030, with public sector investment reaching 10% of GDP, to realise a sustained impact on growth and household services.”  

So there is the target, 30% of GDP. How’s that turning out? One doesn’t like to state the absolutely bleeding obvious, but it’s been a grotesque shitshow. Absa economists pointed out in a report this week that investment was running at about 14% of GDP. When the first version of the National Development Plan came out, 30% didn’t seem like too much of a stretch. In 2008, boosted of course by spending for the Fifa World Cup and the commodity boom, it was running at 22% of GDP.

This is not just a little miss. Every Budget since 2015 has projected a large turnaround in the investment spending by the government and state-owned enterprises, but in 2022, the state contribution was 3.3% of GDP. Well, you could say, that was during Covid. But even before Covid, in the 2019/2020 fiscal year, it was only 4%.

The private sector has been carrying most of the burden, as it should, more or less, but it too has seen big declines. The biggest reason cited in the Absa report is the political climate and tax, although lower demand and the cost of credit also feature.

Something that surprised me in the report is that the big problem in the private sector has been building and construction, which is massively down. What is holding up the private sector numbers is machinery and equipment expenditure, which is now, get this, higher than it’s ever been.

How do we interpret all of this? Some things are obvious: as SA’s political climate turned negative, the government, despite its best intentions, started running out of money. Incapable of holding current spending in check, the government started diverting cash to salaries that was supposed to go to infrastructure projects. The crisis started affecting the political climate further, and the private sector put projects on hold. Repeated attempts by the government to turn the ship around and get infrastructure spending going again were eradicated by the tight relationship between party and trade unions and left-wing politicians, which nixed attempts to right the balance.

But existing projects where capital had already been expended, have seen a turnaround, hence the machinery bounce-back. It’s just that there were no new projects.

So now we have a different plan: the idea is that the private sector should take over the burden, because the government has, you know, no money and it’s also on the edge of its borrowing capacity. Yet, even simple things like getting SAA off the government’s balance sheet have become bogged down in absurd minutiae.

Is there a way to fix this all? I don’t know: we look down the road and see choices. The key is not to choose the one less travelled by, but to choose without regret. And that is harder to do than you might think. DM/BM

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