NAZMEERA MOOLA: Government needs to get things done — and quickly
In the past 12 years the government has shown virtually no ability to achieve rapid decision-making and progress
Listening to President Cyril Ramaphosa’s economic recovery and reconstruction plan, I was left with mixed feelings.
The president said all the right things. The plan contains a set of laudable goals, including ensuring energy security, reducing the cost of doing business, employment stimulus, support for the SA manufacturing base, expediting tourist visas, increasing private participation in ports and release of high-speed spectrum.
The good news is that there is broad-based agreement on these goals among business, labour and government. The contentious issue of public-sector wages was not mentioned.
There was even acknowledgment that perhaps the government’s execution capacity is constrained. The government will be centralising the procurement of widely used items in the National Treasury. The president also announced that monitoring capacity is to be created as a joint initiative of the presidency and the Treasury. Labelled Operation Vulindlela, its purpose is to ensure the rapid implementation of the initiatives announced, and that “those responsible for their implementation are held accountable”.
The president went on to say that, “to oversee this, a National Economic Recovery Council comprising relevant members of the cabinet will provide political oversight and enable rapid decision-making”.
This is the main issue: rapid decision-making and tangible progress relative to a timeline. In the past 12 years the SA government has shown virtually no ability to achieve this. Timelines are typically missed. Reforms are delayed. Confidence has been systemically eroded. As a result, there is little belief that delivery will follow this announcement.
To reverse this degradation, tangible progress in a short period is needed. Let’s start with SA’s most pressing issue: energy insecurity.
The department of minerals & energy is already well behind the planned schedule to bring new power on to the grid, as laid out in the 2019 Integrated Resources Plan. The required ministerial determination for the procurement of new power is at least eight months late. To an outsider, the policy process in the department appears broken. Expecting a department notorious for stalling to do something different appears optimistic.
However, there can be dramatic shifts with the right leadership. Historically, Eskom was extremely resistant to change. Earlier in the day I listened to public enterprises minister Pravin Gordhan and Eskom group CEO André de Ruyter outline their view that the solution to SA’s energy security involved the following:
- About 25GW to 34GW of new electricity production plant to be built over the next decade;
- The bulk of this to come from renewables, as wind and solar now provide the lowest-cost option for SA;
- As Eskom will not be able to fund this quantum of a build, local and global private-sector players will be needed; and
- Separate systems operator and independent transmission entities are vital to generate confidence for investment. Eskom has already begun to divisionalise, appointing MDs and separate boards for generation, transmission and distribution respectively. It is aiming for functional separation by March 2021 and legal separation of transmission by December 2021, with legal separation of generation and distribution by December 2022.
This plan is aligned with Ramaphosa’s speech. The main risk to this timetable is not Eskom. The risk is slippage in the implementation of required legislative and regulatory changes. Essentially, to keep this on track a host of government departments are required to do their job.
Their ability to do so is questionable. As public administration minister Senzo Mchunu recently noted in an answer to parliament, 684,313 public servants were absent from work between June 1 and mid-August, on full pay. More than a fifth of all public servants (213,291 people) were on sick leave at any point during those 11 weeks. (Perhaps the government should consider pay deductions from those 684,313 employees to pay for the three-month extension of government grants?)
If Operation Vulindlela publishes a road map and holds public office bearers to account for delivery against the road map, it will be a huge success. SA is desperate for delivery. Holding the public service accountable for delivery will boost private-sector confidence, resulting in rising investment, higher growth, many more jobs and significantly lower borrowing costs for the government.
Therefore, the president needs to be ready to fire those ministers who do not deliver against this plan. Accountability needs to start at the top.
• Moola is head of SA Investments at Ninety One.
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