Five articles that reveal what Cyril Ramaphosa’s new economic adviser thinks
Business Day columnist Trudi Makhaya has been appointed economic adviser to President Cyril Ramaphosa. Here’s what she thinks about the economy
Subscribers to Business Day and BusinessLIVE are familiar with the insightful writing by columnist Trudi Makhaya. A Rhodes scholar with degrees from Oxford and Wits, she has just been appointed economic adviser to President Cyril Ramaphosa.
Here are five key contributions on how to fix the South African economy published by Business Day this year:
1. Reinvigorate the NDP and lead the world
A month after Ramaphosa was elected, Trudi’s Business Day column was headed 'Implement the NDP, then lead the world'. Here’s an extract:
Everyone seems to have a to-do list for new ANC president Cyril Ramaphosa.
My list includes restructuring state-owned enterprises; encouraging private sector employment; improving relations between employers and employees; rooting out anticompetitive behaviour by dominant companies; trimming the regulatory burden on business; improving the efficiency of government services and infrastructure; and resolving policy and legislative impasses in sectors such as mining and telecommunications.
As the ANC’s anniversary statement acknowledges, one of the most immediate tasks is to restore confidence in the potential of the economy.
The new leadership has to work to restore faith that institutions work, leaders and officials are held accountable
for their actions and the policies that the government has adopted are implemented.
With everything that will be on Ramaphosa’s plate in his quest for unity, the best gospel to advance is that of the resurrection of the National Development Plan (NDP). This is the most efficient way forward as the organisational infrastructure for its implementation and monitoring is already in place. It just needs some reinvigoration.
2. Government must get behind small and new businesses
In a column titled 'Stabilisation on its own will not turn around the economy', Trudi made a strong appeal for government to support enterprise development:
Though the transgressions of the past decade cannot be ignored, fixing the governance and the management of the status quo will not be enough to turn the economy around for most. This is a point that seems to be understood, even if it sometimes gets overshadowed by language straight out of Washington in the 1990s.
Barriers to economic participation arise on two fronts. First, there are not enough jobs for a steadily growing labour force and accessing the jobs that do exist is difficult. This is due to deficits in education and training, and the costs of participation in the labour market such as paying for transport to navigate our divided cities.
On the second front are the barriers that small and new businesses face as they enter and attempt to grow in very concentrated markets.
The budget raises expenditure on economic development by 7.7%, which includes measures aimed at breaking down these barriers.
A new fund is proposed to target innovative businesses at the crucial start-up phase. Existing funding and support should be strengthened to increase their effectiveness in enterprise development.
3. We need to understand the new sharing economy
In a column with the heading 'New sharing economy is a money spinner', Trudi wrote:
Technology, millennial tendencies, new business models and globalisation are changing the way we work. The very nature of work is under scrutiny.
What are the contours of formal work: a pension? Regular hours? A written contract? A boss? A desk of one’s own? The forces shaping work are contradictory. There is freedom that comes with being a partner or member, rather than an employee.
The appeal of entrepreneurship and independence has spawned a lifestyle of (mostly men) who dress like "urban poets" and do not have to conform to the strictures of office life. The scenes of The Office or the frames of Dilbert no longer speak to the reality of many adults in major cities across the world. However, this footloose "worker" has also lost stable benefits, a predictable career trajectory and a sense of community.
These shifts in the way we work express themselves in the spaces and communities where we spend our days. Gone is the quadrilateral office with a door that I got for my first job. Even at corporates, the demands of openness and flexibility mean I have spent most of my career working in open-plan spaces, even hot-desks.
4. We need to learn lessons from economically successful land reform around the world
Writing in 'History can teach us the lie of the land', Trudi had this to say about how land reform should be tackled:
Whereas the current fear is that land reform will “scare off investors“, SA should remind the world of instances where progressive, internationally backed initiatives paved the way for economic success. This will only work if accompanied by a credible plan.
If the east Asian experience seems to belong to a different geopolitical era, we can look at the reforms under way in Scotland. One insight from the report of the high-level panel led by former president Kgalema Motlanthe is that SA does not have a coherent framework in place to guide the three legs of land reform.
Following public consultations, Scotland issued what is believed to be the world’s first land-rights and responsibilities statement to guide its programme. Early indications are that this was a useful exercise in building a broadly shared vision for the principles of land reform.
SA needs to remedy the real inadequacies of the past two decades of land reform, drawing inspiration from a diverse repertoire of international experience.
5. Powerful institutions and engaged citizens keep government on track
Under the headline 'SA’s institutions get the credit for change', Trudi wrote:
In the aftermath of the Zuma presidency the argument has been made countless times that institutions such as the media, civil society organisations and the judiciary rallied against a corrupt administration — and prevailed. Even when the executive was mired in corruption and incompetence and Parliament failed to hold it to account, there were enough elements in society at large to steer the ship to safety. Writing in the Washington Post in February, former US ambassador to SA Patrick Gaspard declared: “In the end, institutions held, and engaged citizens prevailed.”
Navigating law and policy on land reform presents a formidable test to the country’s institutions. The timing is not great. As Moody’s rightly argues, this is a time for institutional recovery. To send the convalescent straight from the operating room onto the field is not what one would wish for.
Indeed, Parliament is not among institutions heralded for preventing SA’s decline. This institution came in for harsh criticism by the Constitutional Court for failing to call Jacob Zuma to account. That this sensitive discussion is led by that same body does not give comfort at first glance. But the fifth Parliament has found some renewed resolve to interrogate public (and private) officials in the last stretch of its tenure, with commendable inquiries into the SABC board, Eskom and state capture. Deliberations over expropriation without compensation provide yet another opportunity for the legislature to show progress in its path towards recovery.