SA’S RESCUE-PLAN BLUES
Why Gigaba’s rescue plan falls short
Gigaba tinkers with administrative solutions to lack of growth as the country slides ever closer to a situation that could lead to debt distress or SA needing IMF assistance within a few years
Finance minister Malusi Gigaba is heeding the advice of business and moving from talk to action. But it is extremely doubtful whether his new action plan will lift public sentiment enough to alter the country’s growth trajectory. The stakes are high. SA is at risk of getting trapped in a protracted period of weak economic growth that would worsen existing fiscal pressures and could land it in debt distress within five years. While the plan might stir some hope, and put a floor under SA’s falling growth rate, none of the items amounts to the kind of structural reform that could shift the needle on growth, certainly not in time to save 2017 from being a bust. Most relate to urgent tasks that government should have concluded already, such as appointing a new SA Airways (SAA) CEO, consulting properly over the mining charter, developing a framework for the disposal of noncore state-owned entities (SOEs), restoring SOE governance and attaching conditions to SOE bailouts. "There was no ‘ra...