President Cyril Ramaphosa. Picture: WALDO SWIEGERS/BLOOMBERG
President Cyril Ramaphosa. Picture: WALDO SWIEGERS/BLOOMBERG

There is no doubt that SA desperately needs foreign direct investment and President Cyril Ramaphosa's recent conference has been proclaimed a success. Yet government policy in a number of areas continues to have exactly the opposite effect.

The SAA scandal is just one example. A further R10bn — or is it now R14bn? — of taxpayer money has been slashed from desperately underfunded government departments to get SAA back in the skies, with the racing certainty of further losses in the years ahead.

It will now compete with Lift, Airlink, FlySafair and Comair, which also required business rescue partly because SAA didn’t pay the damages awarded against it for anticompetitive behaviour.

Despite the Covid crisis these airlines are risking private capital to service the domestic market, and at least two have international airline partners. If they become profitable in a post-Covid world the government will receive tax and sustainable jobs will be created. If unprofitable, the government will not have to bail them out.

Instead it seems a government-refunded SAA will compete against them, threatening their collective profitability. Will this idiocy actually happen? I suspect not, as competent SAA staff have already decamped.

Last week’s auction of cabin stock had an air of finality and the infrastructure must be degrading rapidly. If that’s the reality, owning up to it officially would improve the investment climate. But this won’t happen as the unions must be placated, so spin is deployed instead.

In hard times a government that wants to represent every shade of the political spectrum achieves nothing except the disillusionment of all, including those foreign players whose assistance is needed most.

James Cunningham
Camps Bay

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