BRUCE WHITFIELD: The quantum of progress
Some significant events that have happened in the past month that could help change SA’s trajectory for the good
The 2008 James Bond film The Quantum of Solace was the shortest of the 27 films in the franchise, but it was the most violent.
It contained 250 violent incidents as Bond “skop, skiet and dondered” his way across Europe in a series of implausible scenarios to avenge the death of the woman for whom he planned to abandon his duty to queen and country.
Actor Daniel Craig went on to make the angst-ridden Skyfall as well as Spectre and No Time to Die, a film whose release date has been postponed owing to the pandemic.
It’s safe to assume the world’s best-known spy is yet to find any form of solace.
The imminent jailing of former president Jacob Zuma for contempt of court (notwithstanding his last minute efforts to stop it) is unlikely to bring solace to a country left in tatters by his legacy of profligacy, looting and catastrophic maladministration.
Many will feel a sense of satisfaction at his (partial) comeuppance, but it does nothing to fix the mess he left in his wake.
That’s been left up to his successor, but few are convinced that he has the ability to pull it off.
Historian CW de Kiewiet wrote in 1943: “SA progresses through economic windfalls and political disasters.”
That is as true today as it was then. After 15 years of growth and the restoration of SA’s investment grade following 1994, the Zuma years – exacerbated by the global financial crisis – were disastrous for the economy.
But in the past couple of weeks there have been some important shifts. Individually, they might not appear particularly significant, but seen together they might very well be creating a base from which SA could begin its long road to recovery.
As trends analyst JP Landman reminded me this week: “Compounding is the most powerful force in the world.”
Since 2018 there has been a slow but steady rebuilding of state institutions, with key individuals placed in public sector trouble spots to stem to rot.
New heads of Eskom, the SA Revenue Service and the National Treasury were appointed. Reserve Bank governor Lesetja Kganyago had his contract renewed, amid loud demands for the institution to be nationalised.
Each of them has made significant inroads in the painful repair job of badly damaged institutions.
And yet, the failure of the “new dawn” to materialise as President Cyril Ramaphosa promised in 2017 has left many disillusioned about whether the country truly has what it takes to pull back from the abyss.
The fact is, the economy is smaller today than it was in 2019, more than 500,000 jobs have disappeared and, thanks to Covid, the situation is likely to remain desperate for some time.
In the short term, SA has to manage the political noise from those opposing progress and needs to find ways to support those out of work.
But at the same time there are some important changes taking place in the economy.
“Since 2018, Ramaphosa has taken a different direction to his predecessor,” Landman told my radio show.
And it’s true that there has been a glacial but gratifying shift in the approach to corruption, as is clear from the charges levelled at suspended ANC secretary-general Ace Magashule and the fact that Zuma has been convicted of at least one serious offence so far.
This is evident at Eskom too. Despite renewed bouts of load-shedding thanks to a badly neglected national grid approaching retirement age, the utility is making progress in undoing some of the more egregious contracts into which it entered in recent years.
This week, for example, it succeeded in having the R8bn Econ Oil tender overturned, after judge Bashier Vally labelled it tarnished by “irregularity and illegality of the most fundamental kind”.
CEO Andre de Ruyter described it as a “vindication” of Eskom’s approach to safeguarding the public purse. And the utility’s chair Malegapuru Makgoba told parliament that De Ruyter has the board’s support, following an investigation that cleared him of racism allegations levelled by the former chief procurement officer Solly Tshitangano. And significantly, when Eskom announced a 1% wage increase last Friday, there were none of the usual histrionics decrying the offer. It suggests that there is a greater acceptance within the trade unions that they must also play their part in protecting the fiscus.
The battle against endemic corruption is complex. Health minister Zweli Mkhize, for example, is on special leave pending a report from the Special Investigating Unit. It apparently fingered him for corruption in the R150m contract with Digital Vibes, which was staffed by ex-officials with ties to him. Mkhize, whose initial handling of the health crisis had made his political capital grow strongly, finds himself on the wrong side of Ramaphosa’s anti-corruption drive. Four other significant events have happened in the past month that could help change SA’s trajectory for the good.
First, the country signed an extradition treaty with the United Arab Emirates, opening the way to forcing the return of members of the Gupta family who were at the heart of state capture.
Second, Ramaphosa overruled his recalcitrant energy minister Gwede Mantashe and empowered large businesses to generate up to 100MW of their own energy needs. Eskom’s network has an average life of plant of nearly 40 years and not even its newest power stations are operating at full capacity. For the state to accept that it cannot fix this alone is significant.
Third, public enterprises minister Pravin Gordhan gave away 51% of the equity in SAA to a local consortium with airline expertise. This was premised on the understanding that the government would retain the substantial liabilities of the carrier, but that the fiscus would never again need to fund the national airline. It is a big step and, like the Telkom deal before it, creates the potential for a model for future partnerships between government and business.
Fourth, Ramaphosa visited the port of Cape Town with a promise of another restructuring, amid the revelations that SA’s harbours are among the most dysfunctional and uncompetitive in the world. The proof will be in the delivery of a better service to importers and exporters — but it was an acknowledgement of a real economic constraint.
Ramaphosa, now, is finally getting something his predecessor did not: momentum in the right direction. It was desperately needed too, since in politics your survival depends on your ability to deliver to your voters what they need, not just what you think they want. The president, who was in desperate need of a good story to tell global leaders at the G7 gathering in Cornwall last month, finally has such a story.
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