Opinionista Mmusi Maimane 6 April 2020

Rebuilding South Africa after Covid-19

The true test of leadership is not in putting out fires, but in rebuilding after the damage the fire has caused.

We are now in what are extraordinary times for our nation and the world at large, following the outbreak and spread of Covid-19. President Cyril Ramaphosa’s decision to implement a national 21-day shutdown is a decisive and necessary move to stop the spread of the virus and must be endorsed and supported by all patriotic South Africans.

International trends indicate that this may be only the beginning of a global pandemic that will alter our world and established ways of life for the foreseeable future. And all credible indicators predict that the negative effects of this virus on economies will take years to correct. For South Africa, revised GDP figures for 2020 are looking grim, with Investec predicting -2.7%, BNP Paribas -4%, and Stanlib -4.9%, with others likely to follow suit. Our current recession will extend, further dividing South Africans on the basis of economic means.

At present, our nation’s leadership is responding to a crisis. Where there is a fire, interventions such as lockdowns are simply fire extinguishers. The true test of leadership will be in rebuilding the damage the fire has caused. And amid the dire circumstances, I do believe there is a silver lining.

There exists a rare opportunity for the national government to step up to the plate and craft a plan to build a stronger, revitalised South Africa in the challenging post-Covid-19 years. It is going to require grit, mettle and unity of purpose. We cannot and must not waste this crisis.

In the early 1930s, and in response to the disastrous effects of the Great Depression, the then-US president, Franklin D Roosevelt, introduced the famous “New Deal” – a sweeping range of government-led interventions to reform not just the US economy, but US society as a whole.

Colloquially known as the three “R’s”, the interventions comprised of:

  1. Relief for the most vulnerable in society, including those who had recently lost their jobs;
  2. Reform of Wall Street and its regulatory framework to safeguard against another economic crash; and
  3. Recovery, both for individuals and the economy.

These interventions were not only a resounding success, but wildly popular with the US citizenry. So much so that FDR was the first and only US president to serve three full terms in the White House.

The success of the New Deal was in its bold innovation and steadfast implementation, and is instructive as to how South Africa can respond to the effects of Covid-19. Indeed, South Africa requires its own three “R’s” intervention in the aftermath of Covid-19: We must Review, Repurpose and Rebuild.

Review

Firstly, a full-scale review of our broader economy is required to identify where swift change can occur. South Africa’s economic model is outdated and belongs in a bygone era. In truth, it still largely resembles the pre-1994 concentrated model – a small political and economic elite (often overlapping) and an ever-growing underdeveloped citizenry. The structure itself has barely evolved over the past 26 years, save for white Afrikaner nationalists being replaced by black African nationalists in the upper echelons. To reform this and create a fair, more egalitarian economy will be no small feat. But we can start.

A review of our “strategic” relationships in the region and internationally is a must. In a world where the traditional “big players” are being weakened by the effects of Covid-19, our relationship with SADC countries must be reformed to create a powerful trading block that fosters economic development and growth. Africa is the future, and South Africa must be the leader in this development. In this light, following the ASEAN development partnership model will fast-track this, aided by a review of the SADC visa process. In this way, SADC countries can forge stronger bonds for the future.

Our current empowerment model needs to be reviewed and overhauled in favour of actual empowerment. The establishment of a Jobs and Justice Fund would amass empowerment funding from businesses and distribute it to real empowerment initiatives. This includes bursaries, school infrastructure, mentorship programmes, apprenticeships and training, and land reform programmes in order to bridge the gap between power and potential. The fund would be administered by public finance professionals, not politicians, to ensure transparency and accountability. In effect, there would be greater equitable distribution and less concentration in the hands of a few. This is real empowerment.

In addition to this, SA’s electoral system is in desperate need of review. We support and advocate for amending the Electoral Act to ensure citizens can directly elect their public representatives at local, provincial and national level and in turn hold them directly accountable. This again breaks down the wall between the business and political elite, and the rest of South Africa.

Repurpose

There is very little disagreement among economists and academics that our country’s public finances are in serious disarray. We are on the brink of fiscal collapse as the government continues going into additional credit to pay off current credit. It’s a model destined for failure and we require a bold financial repurposing effort to direct public funds to vital areas of growth and development.

For starters, many of our SOEs are operating at massive losses and cost the country billions of rand to keep afloat. These are the quick wins to begin with. Eskom and SAA must be sold. The private sector is both ready and able to provide such services and in doing so will lower costs, increase competition and tackle climate change. A win-win, as we’d say goodbye to blackouts and bailouts, while building a sustainable, cleaner energy future.  This will allow a change in the energy game – a forward-focused renewable energy mix provided for by a host of modernised private players.

This must be followed by private-public sector job creation effort that aligns with the skillset of the country and addresses the rigid economy that excludes millions by design. A complete overhaul of both funding and regulation of SMMEs will aid this – particularly access to capital and the rules governing employment. Without getting the over 10 million unemployed South Africans into the economy and working, we have little hope of a brighter future.

South Africa’s tax regime is crucial to this repurposing of funds in both the generation and allocation of revenue. In this light, sizeable tax rebates to incentivise job creation and skills training is first prize. In addition, to ease the burden on new, mainly black entrants to the economy, we propose a minor tax rebate for those who support family members in what is colloquially termed “black tax”. As a young professional or new job entrant who can show SARS that you directly support family members that were discriminated against by apartheid, you would be eligible for tax rebates.

Then, the introduction of a voluntary National Civilian Service year that bridges the transition from school into the working world. This year will allow matriculants to enter into work-based training in the community healthcare, basic education or SAPS fields, gaining valuable work experience while earning a small stipend;

Lastly, finances must be repurposed to enable direct cash injections to young South Africans. We propose the introduction of “MyShare” – an unconditional cash grant paid to young South Africans who are still struggling to make ends meet. The “MyShare” model will help build a more just society by acknowledging the past and putting down the first blocks of a basic income floor.

This will give young South Africans more choice and agency in carving out their livelihood on their own terms. They can start living the life they aspire to and seek out training and work opportunities in line with their talents and skills – rather than just doing whatever is available in order to just survive.

Rebuild 

Lastly, we must rebuild our education and healthcare capabilities. The Covid-19 crisis has shown that we are not only heavily under-resourced, but years behind in the latest technological developments in both education and healthcare.

In his recent February Budget, Finance Minister Tito Mboweni slashed national funding of education by R7.1-billion over the next three years and healthcare by R3.9-billion over the same timeframe. Again, this is a complex and interrelated matter and cannot be fixed by simply throwing more money at broken systems. We need to approach these sectors with laser-sharp focus on the future.

Competitive education for the future requires incentivising private sector funding to previously disadvantaged schools, training and examining of teachers via teacher training colleges, strengthening curricula in line with the needs of our labour market, and loosening the grip of unions by giving governing bodies greater autonomy.

In addition, the release of high-demand spectrum is the first priority to lower data costs and increase access to online resources for young people. Lack of access can never be the barrier for aspiration and the drive to learn and better oneself. Moreover, online teaching is fast becoming a useful tool in the 21st century. It should be explored.

Healthcare is a hot button topic in SA in light of the proposed National Health Insurance (NHI). While well-intentioned, it cannot fix the systemic problems with South Africa’s two-tiered healthcare system. What we desperately require is a holistic approach to healthcare: creating a healthy citizenry instead of focusing on fixing healthcare problems once they’ve arisen. This requires less ideology and greater innovation. The national government should abandon any plans to proceed with the NHI and instead form a National Health Advisory Body of medical professionals and academics who will devise a short-term healthcare model that takes into account all of South Africa’s unique challenges.

The aftermath of Covid-19 will necessitate rebuilding our nation in a way that incorporates the lessons learnt during this trying time. Rebuilding will require having the tough conversations and asking uncomfortable questions about socio-economic inequality and the actualisation of different citizens’ rights in a free and democratic country. These are the conversations we skimmed over during the transition into democracy. Since then, the chasm has widened and we require a fresh perspective.

The real lesson we must take from the Covid-19 outbreak is how badly South Africa is still starkly and institutionally divided. It has shone a fresh light on our “Two South Africas” – one we ignore at our own peril. While the primary concern for some during this lockdown period is jogging or dog walking, others have no idea where their next wage will come from. Our society’s inequality is more complex and entrenched than we’d like to admit.

Therefore, in our rebuilding effort we must view South Africa for what it is in order to achieve what we wish it to be. A racially and culturally divided society; the most unequal country in the world. Within this collective admission there lies the opportunity to rebuild One South Africa. A fair, reconciled, prosperous South Africa that we envisioned in 1994. Let’s not let this opportunity slip, for it very well may be our last. DM

Mmusi Maimane is the Chief Activist of the One South Africa Movement.

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