RAYMOND PARSONS: Revamped cabinet, an instruction to deliver?

The state of the nation address, the declared state of disaster, the budget and now the cabinet changes create the broad framework for SA’s political economy in 2023. While these elements will shape the overall government game plan, the reconfigured and enlarged cabinet representing the team must now set the pace.

The revised cabinet will eventually be judged by the outcomes it achieves. This is especially so in the key portfolios that affect SA’s economic performance, such as energy, transport, public administration and local government.

So is the new-look cabinet fit for purpose? What is at stake here? Leaving personalities aside, these cabinet changes come at a critical time — when the country is grappling with a vulnerable economy, weighed down by significant energy, transport, crime, corruption, unemployment and poverty challenges, and with greylisting added to the list.

The very low GDP growth forecasts recently projected by the Reserve Bank and the budget presage tough socioeconomic times ahead for SA in general and the new cabinet in particular. Risks to these growth forecasts remain on the downside. The policy framework therefore still greatly matters for investment and growth.

President Cyril Ramaphosa has rightly emphasised the speedy implementation of existing plans, especially on the energy front, and the importance of not constantly creating new ones. SA’s political economy trajectory confirms that the country does not have the luxury of time. There is a crisis of confidence to be managed, considering the declaration of a state of disaster intended to speed up decision-making in tackling load-shedding and the energy crisis.

Implementing the latest controversial regulations governing the state of disaster will nonetheless severely test the cabinet’s governance capabilities and the prospects of policy certainty in 2023. A key lesson learnt from the Covid pandemic (which also prompted a state of disaster) was that there needs to be transparent consultation with business and other stakeholders.

Moreover, as safeguards are needed to prevent corruption, the involvement of the auditor-general is to be welcomed. In any event, the cabinet should view the state of disaster as a temporary measure and already have an eventual exit strategy in mind.

The new electricity minister will have to demonstrate that the turf problems that have bedevilled Eskom, and the subsequent aggravated load-shedding, will soon become things of the past through a solution-driven approach. The daunting challenge is to get the various decision-makers in energy policy on the same page.

The reconfigured cabinet must back its words with credible deeds to manage the key critical issues on its agenda favourably. In addition, there must be visible progress in mobilising the private sector on a far grander scale. Business can work around the negatives where necessary and even adjust to weak policies. It is capable of delivering less-than-optimal yet still positive responses, but not if faced with chronic uncertainty in key policies and projects.

If business expects major changes from the revamped cabinet but is uncertain about the exact form they will take, its confidence will be weak. Consistency and coherence must therefore remain the watchwords in implementing future policies and projects.

We need to remind ourselves that in the past SA has not lacked well-intentioned plans to deliver better outcomes on many fronts. Road maps like the original National Development Plan (2012) and the subsequent Economic Reconstruction & Recovery Plan (2019) nevertheless both failed to gain sufficient traction, thus contributing to the low-growth trap in which SA now finds itself.

Over time there have also been significant gaps in the political leadership and bureaucratic capacity needed for the various master plans, which if more effectively implemented would have minimised uncertainty and maximised continuity. Plans and projects have been easier to announce than to implement.

Investor confidence has been a victim of persistent policy uncertainty, as evidenced by trends in the North West University Business School Policy Uncertainty Index. The harsh reality facing the restructured cabinet is that total fixed investment to GDP stands at only 14%, down from about 19% a few years ago.

It is now widely accepted that sustained GDP growth rates of over 2%, needed to bring about inclusive growth in SA, eventually require total fixed capital formation support of about 25% of GDP. Cabinet actions must now be geared towards creating the right policy environment to underpin the higher targets promised for the Presidential Investment Conference scheduled for next month.

The deterrents to growth in SA need no introduction. Drift, policy uncertainty, excessive red tape, state capture and corruption have long been enemies of delivery. The cumulative effect is playing out dramatically in the current Eskom crisis. When Eskom’s deteriorating situation was still manageable it was largely overlooked. At multiple levels, SA has painfully discovered that what is even worse than wrong decisions are good decisions that are seriously delayed.

Ramaphosa now wants an “implementation cabinet” with the centrality of delivery as its challenge. The transmuted cabinet therefore needs to fix its gaze on a few key priorities to turn the situation around. A priority-led action agenda must be quickly agreed upon. Key ministerial decisions should be evidence-based, drawing on the best advice available, and expeditiously implemented. “Smart tape, not red tape” must be the dominant mantra.

Flogging the system can no longer deliver the desired results; reform is the key to building a sustainable and self-developing system. And tough timelines must be set and enforced, with consequences if they are not met. Indeed, if confidence is to be strengthened, the imprint of authentic leadership must run like a golden thread through future cabinet actions.

Leadership is important not because it is all that matters in policy-making but  because we simply cannot do without it. There is no substitute for disciplined political leadership. The restoration of confidence might then be cumulative, just as its decline has been. Thus, to begin to restore confidence is half the revamped cabinet’s battle.

Ultimately, the task of the reconfigured cabinet is to convince the country that the necessary capacity, and strength of will, exist to shape events and not merely be swept along by them. And if the pervasive sense of crisis is to be decisively overcome the revised cabinet team must demonstrate great discipline and dogged persistence to defeat the cynics.

• Parsons is a professor at the North West University Business School.