Mcebisi Jonas spells out his vision to revitalise Eastern Cape’s ailing economy

The founding CEO of the Eastern Cape Socio-Economic Consultative Council (Ecsecc) and group chairperson of MTN, Mcebisi Jonas, said the Eastern Cape must fix its failing metros and secondary cities, which are in “a state of perpetual decay”.

Jonas, who was once a deputy finance minister and also served in the provincial Cabinet, said last week that turning around the province’s metros was imperative for economic growth.

Jonas, who hails from Kariega (formerly Uitenhage), said the province’s metros were staffed by people who cannot do the job, but were political deployees.

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Speaking about a new approach to develop the Eastern Cape, or as he called it, “de-Bantustanise” the province, Jonas said the first issue was that cities were “small, not growing, and decaying.

“When I say cities, I’m talking about the metros and secondary cities that are just in a state of perpetual decay. You cannot drive development as long as Buffalo City doesn’t work. The Nelson Mandela Bay Metro doesn’t work. Mthatha doesn’t work. Queenstown [Komani] doesn’t work. You are not going to have development,” he said.

“And the metros must not be a political football. You cannot solve problems of factionalism by deploying people who can’t do the job. That’s very simple logic. I mean, you can deploy people into other areas; there are areas where you can deploy people you want to keep in jobs.

“But the fact that our metros are the way they are eats into our confidence … in the government. We have no excuse for our metros to be what they are.

“I can tell you now for free, people pay rates, and there are transfers from the national government. And some of these metros have at least the space for borrowing and bringing in private capital to do development. So, how do you explain that they fail the way they fail? It is a challenge of leadership.”

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Jonas was speaking at the 30th anniversary of the Eastern Cape Socio-Economic Consultative Council.

“The context in which Ecsecc was formed was just at the brink of the transition. And if you recall, at that point, it was the height of labour unrest in the region in particular, but in the country generally.

“It was a point where most of the [automotive companies] were not sure what the new government’s policy was going to be. It was a point where unions themselves were not very clear about the way forward, except for the positive and optimistic message that came from the leadership of the ANC.

“That message said all these companies would remain in the country and in the province. So, we had very tough negotiations with the auto sector at that time and with the business organisations and NGOs in the province to talk about how we could bring stability.

“In a sense, the foundation of Ecsecc is what I would call ‘the politics of consensus’. Essentially, the organisation was built on the understanding that it had to mediate and facilitate consensus between different stakeholders.

“That’s what it was about. I’m saying this because today, we’re at a point where the politics of consensus are being quickly replaced by the politics of conflict, tension and a winner-takes-all mentality. That’s where we are. We’re also at a point where non-racialism is being replaced by racism across the world generally, so that’s important as a context.”

Inflexion point

Jonas said the Eastern Cape was at an inflexion point where “we need to think about how we strengthen the filtering capacity of our organisations so that we deploy the right people.

“The failure of our metros and big municipalities undermines development in the province. The last time I passed through Queenstown, they were throwing stones at each other.

“The councillors were in a big fight, but I don’t know what the fight was about. But that’s the trajectory: people are concerned only about procurement, and in some parts, people just divide the budget before it’s even allocated. That’s something I think we must think about as a subjective factor.”

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Jonas said the Eastern Cape had huge political capital, which, however, had a very weak national impact.

“That’s our challenge: we have this contradiction that we have huge political capital, and this political capital is only expressed at funerals,” he said.

“We need to start using it to leverage more out of the national government, to generate new ideas about the challenges we face as a country, and to influence the behaviour of SOEs [state-owned enterprises]. We need to ensure that we control and direct political developments in the province.

“I’m saying this because I think that as a country, and globally, we are in a crisis of ideas. The politics of fear are dominating. Fear-mongering is defining politics in ways we have not imagined. Racism is back in full force, and people are retreating.

“Crime is rising. Crime syndicates are becoming more arrogant than they ever have been. It does require us to use our political capital to try to find a new path for the country.”

Jonas said he believed that Ecsecc still had an important role to play.

“It must find ideas to bring back the politics of consensus and have people talking, people agreeing, people realising there is coexistence and taking our country in a different direction. You must deal with populism; normally, people think populism comes with simple solutions to very complex problems. So you have to play a role in trying to deal with all of those issues.

“The cohesion relies on us building strong societal partnerships, and that’s what Ecsecc’s role is.”

Structural problems

He said Ecsecc should play a role in unravelling the structural problems faced by the province.

“The first structural feature of the provincial economy is its dislocation from the South African economy and the broader African economy. We are, in many ways, completely dislocated from that. So how do we deal with that particular challenge?

“The work has started, obviously. We must think about the Eastern Cape primarily as a transport and logistics gateway to the rest of the country and to the rest of the continent. If you start shifting your thinking about the Eastern Cape and looking at it as a gateway, it takes you somewhere else.

“It means you have to look at the rail projects that connect the Eastern Cape better, particularly the rail from [Gqeberha] and East London to City Deep [in Johannesburg, Africa’s largest dry port]. That connection is important because some of the things that are produced here must end up in City Deep, and some of the things we need to produce in the Eastern Cape must come from City Deep. So that connection with Gauteng is fundamental for the development of the Eastern Cape.

“The other important connection is the mineral corridor, the connection between the Eastern Cape and the centres where mining is happening. The third element is thinking more strategically about our ports.

He said that given the automotive crisis in the province, leaders should rethink the roles of the Industrial Development Zones at the province’s ports, including a discussion on what new industries will work there.

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He said low investment by SOEs in the province was the second factor that must be addressed.

“I would argue that we need to ensure the national government shares a vision to enhance capital investment by SOEs in the province.

“The third structural feature of the Eastern Cape is that we are essentially an automotive province. We are dependent on the automotive sector, and it will be interesting to hear the debate now, given the concerns of geopolitics, the trade wars that are happening, and the challenges we’re going to face.

“We must find mechanisms for retaining the automotive sector. I think the argument about bringing in Chinese companies is just a short-term argument. I believe we must remain integrated into the global trade and sourcing networks of the automotive sector.

Diversification

“The second part is, of course, the diversification of our industrial base. Again, that’s where Ecsecc should play a role. How do you diversify our industrial base? We have agriculture; there’s a possibility of food processing and other possibilities you could have in different subsectors. There are also new industries we should be looking at to ensure our industrial base is diversified.”

He said the fourth structural feature of the Eastern Cape economy that made growth difficult was the poor infrastructure in the former Transkei and Ciskei.

“Poor infrastructure, underdevelopment, poverty, unemployment, etcetera. Essentially, if you think about what apartheid bequeathed to some of our homelands, it’s probably Lion Lager and migrant labour.

“So the challenge we have is how we redefine the role of these areas in the political economy of South Africa. We still have Bantustans, effectively, in character and in social structure.

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“The question is, how do we de-Bantustanise?”

He said it was important to think strategically about infrastructure.

“You have a beautiful coastline in the former Transkei, and I still think that the vision of the Wild Coast must be revived. We need to open up the Wild Coast.

“We have not built a single new town since 1994,” he said. “If you don’t, as your population grows, build an economy and towns to accommodate that, you remain in what Indians call a ‘rurban’ area. It’s an urban area because the number of people concentrated there actually equates to an urban area.

“It’s a rural area because its economic base is simple. We’re actually building these ‘rurbans’ all across the place. I still think the provincial government should really start investing in research through Ecsecc on the possibilities of creating new towns in the former Transkei.” DM