Great State of the Nation Addresses answer two fundamental questions: what type of country are we becoming, and what is our economy generating that the world wants?
Our government’s failure to achieve the necessary economic revival to respond positively to these questions is a profound indictment on our president. Instead of being able to speak to these two questions, Cyril Ramaphosa’s attention is focused on managing the political fallout resulting from the damning findings of the Zondo Commission.
This commission is just one of a number of independent inquiry panels shedding light on the gathering speed of the collapse of this government. Each of these panels has confirmed that our government was hollowed out by the Zuma-Ramaphosa presidency. The question is, what is our president going to propose in the State of the Nation Address (Sona) to give hope to a despairing country? And is he even able to?
On 15 October 2020, the president stood up in front of a sitting of the joint Houses of Parliament to present an economic recovery plan to create jobs, re-industrialise the economy, accelerate economic reforms, fight crime and corruption and improve the capability of the state. Almost 14 months later, all data point to the fact that we have taken significant steps backwards across all of those deliverables.
South Africa’s unemployment rate has increased by 0.5% to its highest rate since 2008. Using the expanded definition of unemployed, which includes those who have stopped looking for work, our level of unemployment is now 46.6%. The youth unemployment rate is 66.5 %. According to all available statistics, the president’s much-publicised Yes Programme, which has absorbed more than R4-billion of investment, has failed to make a dent in youth unemployment. Young people are, in fact, worse off than they were before the programme was launched.
Just six months before the president spoke in front of the sitting of the joint Houses of Parliament, his decision to implement hard lockdowns as a response to Covid-19 halved manufacturing production and dropped mining output by 47%. Though the president presented South Africa’s deindustrialisation crises as a Covid-driven phenomenon, the country has been headed down the wrong economic path since 2005.
A recent comparative study showed that instead of increasing its manufacturing as a percentage of total employment, South Africa’s share of manufacturing jobs decreased from 13.9% in 2005 to 11.2% in 2015. Indeed, between 2015 and when the president announced his proposed interventions in 2020, the annual growth rate of manufacturing was negative. Despite the president’s highly anticipated foreign direct investment (FDI) drive, FDI fell by 39% to $3.1-billion in 2020.
Against this dire economic backdrop, other than a relaxation of licence requirements for independent power producers, we have seen no economic reforms implemented. The president is immersed in internal ANC factional squabbles which have led to a de facto insurrection that has cost more than 340 people their lives.
Eskom can no longer go two months without implementing rolling blackouts. Parliament has been torched, Cabinet members openly defy the president and our security cluster is in a precarious state of disrepair. We have gone from Ramaphoria to Ramaparalysis. Our president simply does not have the courage to make the hard political decisions needed to boost our economy. Our country requires urgent course correction to reinvigorate the state’s capacity to run an efficient government.
For South Africa to bring its unemployment numbers down to sustainable levels, we need to create more than 10 million new high-quality jobs. Given that we have historically created 100,000 jobs per 0.1%, we have to have a sustained period of record GDP growth for the next decade. We cannot do that with the ANC in power.
Even with what many considered the ANC’s best available leader in charge, South Africa has experienced an average GDP growth of just 0.8% since 2018. We need bold, targeted economic reforms that will allow South Africa’s labour absorption rate to increase from its paltry figure of 38% to 69%, where it was in 2008 under President Thabo Mbeki. In other words, we need drastic change.
A recent report produced by the Carnegie Institute reminded us that South Africa’s 1994 political settlement was built on four pillars. First, a social compact agreeing to an implementation of the rule of law, economic transformation and the creation of a social safety net. Second, a racial transformation of the public sector with the ultimate goal of creating a meritocratic state. Third, the delivery of black upward mobility with the ultimate aim of creating a large black middle class. Fourth, a promise to drastically reduce the levels of poverty through the redirection of public resources.
It is now time to return to the principles agreed in this settlement and recommit ourselves to equitably implementing these national covenants. With the best will in the world, we can only do so by rededicating ourselves to an ubuntu-rooted value system that is consistent with the best of who we are.
This country needs to use these four guidelines to write a new chapter in its history. This starts with us turning the page on the ANC as the narrator of our national biography. Our new chapter needs to be written by ethical, competent servant-leaders who are capable of listening to South African citizen’s needs. Above all, this new leadership needs to anchor its approach to implementing the four pillars of our political settlement on the obligation to afford as many South Africans as possible the dignity of work.
No man or woman wants to live from hand to mouth. No parent wants to decide which of their children goes to sleep hungry and which eats a decent meal. No teacher wants to cheat learners by knowingly teaching to low standards. No patriotic South African wants to hire foreigners to do jobs local citizens can do. Yet all of these things are happening, courtesy of a collapsed state.
Since 2008, South Africa has not chosen government employees according to their competence. This has led to more than 1.3 million government employees either being frustrated but competent workers or, more often than not, incompetent and corrupt government employees.
According to research presented by Tim Cohen, state employees in the 50th percentile get paid 110% more than their private sector counterparts. These 1.3 million people are in charge of more than 60 million South Africans’ socioeconomic destiny.
No ANC government is capable of implementing the necessary wholesale restructuring of the public sector. Nothing short of that will be needed to get 10 million South Africans back to work over the next five years.
South Africa cannot invert the economic pyramid to create a rapidly growing middle class without the transformation of state-owned enterprises (SOEs) from piggy banks for a few, to growth engines for the majority of South Africans.
The capture of our state by ANC funders has cost an estimated R1.5-trillion. That figure represents a third of the economy. This number does not capture the long-term effect of the culture of impunity created at our SOEs.
Our SOEs cannot withstand another five years of the current leadership. A complete rationalisation of both the quality and quantity of staff is needed alongside a cultural reset that will allow our SOEs to do the job that they were meant to do – stimulate economic growth.
None of this will be achieved without an alliance forming between disgruntled South African voters and service-orientated credible leaders selected according to their track record of delivery in communities around the country.
I am putting my hand up to help form such an alliance with like-minded South Africans. It is time to stop Ramaparalysis in its tracks. DM