Finance minister Nhlanhla Nene will be in the hot seat like never before when he delivers the medium-term budget policy statement (MTBPS) in October.
Nene will have to provide some answers to President Cyril Ramaphosa’s address to the nation two weeks ago, a message that was rather characteristic of the ANC’s economic policy contradictions over the years. On the one hand, Ramaphosa announced that the ANC would amend the constitution to explicitly allow for land expropriation without compensation and on the other said that the government would be crafting a stimulus package to boost economic growth.
In the ANC’s typical contradictory fashion, on the one hand it created uncertainty that is inimical to Ramaphosa’s $100bn investment drive; on the other, the stimulus package "based on existing budgetary resources" is a welcome development in the current economic environment. It is like pouring fuel into a flame with one hand and water to douse it with the other.
Nene has his work cut out for him, not because it is difficult to extricate SA from its economic malaise, but because he is hamstrung by a party locked in a time loop and unable to fashion genuine redress and transformation.
The mooted stimulus package too is unlikely to yield gains. The stimulus package mantra began ahead of the ANC’s December 2017 congress at Nasrec and a package to boost manufacturing and tourism was announced by former finance minister Malusi Gigaba shortly after delivering his maiden mini-budget in October 2017. However, last week’s Statistics SA data showed that manufacturing production contracted in the first quarter. Employment data released earlier also showed that the sector lost 55,000 jobs year on year in the second quarter. And here we are again, on the brink of another austerity budget.
The outcome of the cabinet lekgotla held last week is set to be refined and publicly announced by Nene in his MTBPS.
At the heart of SA’s economic malaise seems to be the dearth of ideas and innovative thinking in the ANC. It is locked in rhetoric and using policy as a proxy for factional fights.
The adoption of National Health Insurance and a host of policies that shifted ANC economic policy from the era of former president Thabo Mbeki to the adoption of the National Development Plan at the ANC’s national conference in 2012, which came hand in hand with the then obscure radical socioeconomic transformation, is symptomatic of a party pandering to one dominant group or another.
It is no different under Ramaphosa, with radical socio-economic transformation coming to mean simply displacing the EFF as the sloganeers chanting for the poor with no real content or significant thought on its real implications for the economy or, ironically, the poor.
A national executive committee decision during the perilous Zuma years was for the party to take on board "advisers" — experts and academics — to assist it through its thinking on the economy. There is no real evidence that this has happened. And even if it had, who is to say the ANC would have listened?
The land summit it held saw a number of experts in the field, such as Tembeka Ngcukaitobi, author of The Land is Ours, advocate that land expropriation without compensation can be effected under the current constitutional provisions. The ANC’s land summit received presentations on how this could be done, but still it capitulated.
Nene has his work cut out for him, not because it is difficult to extricate SA from its economic malaise, but because he is hamstrung by a party locked in a time loop and unable to fashion genuine redress and transformation due to its inability to function outside of its own internal power plays.
Ramaphosa’s economic adviser, Trudi Makhaya, alluded to this in an interview with CNBC Africa in June when she said: "We have been stuck in a lot of economic policy and debate without implementing a lot of it."
The consequence of this endless policy trap is an economy adrift and inequality, poverty and unemployment the ever-present and unassailable winner.