EDITORIAL: Broken promises mean Cyril Ramaphosa will face even more scepticism
The president has failed to follow through on plans to fix the economy
As President Cyril Ramaphosa’s state of the nation address approaches, it’s appropriate to reflect on what has been said before to get a sense of the expectations we would attach to this address.
When Ramaphosa spoke 12 months ago, there was a sense that the country had reached a decisive moment. Ramaphoria was long a thing of the past and morale had suffered a big dent due to the Eskom power cuts late in 2019. The nation was bracing itself to lose its last remaining investment-grade rating from Moody's Investors Service. And that was before Covid-19 hit the economy and sent it into a recession that nobody listening to Ramaphosa in 2020 would have imagined possible.
Did the worst crisis in the country’s modern history lead to a new determination to fix the weaknesses that have held it back? Unfortunately, the answer has to be no, and that’s just based on the wish list Ramaphosa is likely to present on Thursday night.
In 2020, he quoted Nelson Mandela as saying we must not let fear stand in our way, and talked up unity and social compacting as a way to build a sustainable economy that delivers jobs and starts to reverse intolerable poverty and inequality. In 2021, expect more of the same. And that’s where the problem lies.
It has become a tradition for Ramaphosa and his lieutenant, minister of public enterprises Pravin Gordhan, to tell the country about the crucial need to secure energy supply. Journalists have now learnt to be sceptical when the latter promises to deliver a solution to Eskom’s debt load that’s approaching R500bn.
The last time he did so was at Eskom’s results presentation, and the Business Times reported then that he promised to report back within a couple of months. It speaks volumes of the government’s credibility problem that three months have passed and nobody is surprised, or even complaining, that no such solution has been forthcoming. It’s also been more than a year since the government appointed Malegapuru Makgoba, with no prior industry experience, as Eskom’s “interim” chair.
There was also the promise to “fix commuter rail”, which has come to nothing much despite the president noting that the network “daily transports over a million commuters to and from work”. But no amount of money and effort has been spared for SAA, which currently carries nobody, with no prospect of doing so professionally any time soon.
There are some things from Ramaphosa’s 2020 speech that we should be happy haven’t seen the light of day, such as the establishment of a state bank championed by the otherwise sensible finance minister Tito Mboweni. Others though that needed doing have become even more urgent after the economic and health shock imposed by the Covid-19 outbreak.
The past 12 months have shown that the country needs an implementer rather than a consensus maker, and Ramaphosa has fallen short. As we prepare to listen to him, there’s still no finality on whether the government will extend the emergency R350-a-month welfare grant, or extend relief to cover workers and employers hit by the tightening of lockdown restrictions late in 2020. Social partners have a crucial role but they are not the country’s elected leaders.
“Our debt is heading towards unsustainable levels, and spending is misdirected towards consumption and debt-servicing rather than infrastructure and productive activities,” the government noted in 2020. That the situation is even more dire because of Covid is not Ramaphosa’s doing, but that doesn’t make him any less responsible for fixing it.
The upsurge in mining companies’ profits due to higher commodity prices and the resulting bonus for the SA Revenue Service shows that for all Mboweni’s attempts to juggle the numbers, the only thing that will fix the country’s fiscal position is a growing economy in which companies can make profits and employ people who pay tax.
And it will take more than the annual round of making promises for the country to get there.
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