LETTER: Stand tall, Ramaphosa, and start fixing SOEs
The president’s refusal to take unpalatable steps over retrenchments has pushed enterprises to the brink despite crippling bailouts
The erudite Carol Paton asks whether President Cyril Ramaphosa will be “the president of austerity or the one who lands SA on the doorstep of the IMF” (“Ramaphosa can no longer wimp out of cost-cutting”, August 6).
The economy is on a precipice, yet “Ramaphosa’s response to the country’s deteriorating finances has been, at best, naïve and, at worst, populist and irresponsible”.
The public sector wage bill is killing the economy yet “Ramaphosa’s first action as president was to promise public servants there would be no retrenchments”. So we sit with state-owned enterprises (SOEs) that are overstaffed and inefficient and where no rationalisation has taken place. Instead we have crippling bailouts.
SOEs have become centres for sheltered employment under a president too lame to confront the unions and his enemies. But it is his failure to act on Eskom, as Paton states, “that towers above his other missteps”. The Eskom board submitted a turnaround plan in December 2018, while an “expert task team” has submitted its rescue plan to Ramaphosa. Neither report has seen the light of day.
Pravin Gordhan stated last week that a “policy paper” would be written on Eskom, due out in mid-September. So 18 months after Ramaphosa identified Eskom as the “single biggest risk to the economy” the government still has no plan on the table.
To compound matters, he has committed yet more state funding to National Health Insurance, surely the final nail in the coffin of our economy.
Elsewhere in the same edition, University of Cape Town professor Alan Hirsch was quoted as saying that SA’s economic performance since the National Development Plan was adopted in 2012 was the worst since 1946, suggesting that “if SA Inc were a JSE-listed company investors would demand a new growth strategy and fire the cabinet”.
So will our president stand tall, make the tough decisions and take the hits from his enemies, or weakly capitulate and hand our economy over to the IMF?