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Mr Ramaphosa to borrow to give is to gamble with the future of our nation


Dr Marius Oosthuizen is a scenario planner and writes in his own capacity.

Dear Mr President, please don’t finance grants from debts, thinking South Africa can consume itself out of the Covid-19 hole.

 The pandemic has wreaked your plans for a high-growth economy during your first term in office, Mr President. I get how frustrating that must be. After all your hard work on the Investment summits, the Jobs summits and the various other stakeholder engagements you initiated during the first months of your Presidency, all has come to naught.  

But Mr President, even as the populists gather at your door, please remember that the wealth of a nation ought not to be measured by the quantum of its consumption, but by the quantum of its productivity. 

In the next few months, as the socio-economic effects of the Covid-19 pandemic bite, there will be tremendous pressure on you Mr President, to open the taps of the public purse like a firehose to douse the flames of our economic hardship. The populists in your party and the ignoramus pseudo-progressives will shout “borrow to give, borrow to give”, and try to convince your Cabinet members that South Africa can consume itself out of the Covid-19 hole.  

This will be a dangerous moment for South Africa.  

At the end of the 2000s South Africa was in a strong fiscal position. Meaningful growth and fiscal conservatism had meant that we’d seen surpluses accumulate and debt repayment costs safely in decline. But a decade later we took a turn toward our financial undoing.  

The Zuma years saw expansionist social policies, without the accompanying expansion in either private sector investment or productivity growth. We saw the growth of consumer debt, without the growth of jobs and labour productively engaged in the economy.  

Essentially, apart from State Capture, the most fundamental legacy of the Zuma years is that we turned 18 million poor citizens into 18 million consumers, overnight.  

I am not bemoaning our social support net, Mr President. I’m a supporter of the system. My concern is over the pundits and statist dreamers, who long for a glorious state which spews gold coins from the mouth of a grand oracle of poorly-read ideology. They are rising, and will rise amidst the dust of the pandemic, to tell you to “borrow to give, borrow to give”.  

They are wrong Mr President. They are mistaking a social safety net, for a ladder to national emancipation. It is not.  

The only man who borrows to give is the gambler, who is left with nothing in the end but debts he cannot repay. Please do not gamble with the future of our nation Mr President.  

Instead, borrow as you must, but do so to invest. Invest in infrastructure, in renewable energy and water conservation capacity. Invest in skills. Invest in technological capacity. Invest in the factors of national competitiveness and invest in the long-term future of our nation’s capabilities.  

This will be painful, Mr President. It will require patience and will require boldness in the face of your detractors. It will mean informing the loud and impatient Gucci revolutionaries, who march by day and sip expensive whisky by night, that their consumerist vision will not materialise. It will mean schooling them in the art of annuity and compound appreciation, also known as painstaking development. 

Rather, if South Africa does rise, it will be by the sweat of our brow and the burden-bearing backs of workers, who understand the relationship between input and output. Who can calculate the value of a man-hour, or woman-hour, given to an honest day’s work. Only those who know nothing of work demand a free lunch, right before they starve.  

Those who are ready to work, are waiting to be put to work. They are waiting on you.  

Mr President, my other great concern is that you falter in your belief that the good people of this country are with you on this mission. Fear not. If you put the country ahead of the party, and of yourself, you will see no end to our support.  

The next six months will be a test, Mr President. One which your party may fail, but you dare not. You are the leader of a nation and must act in her interests, in spite of the noise of the rising crowd.  DM


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