SAM MKOKELI: Where’s the substance behind Ramaphosa’s promise to business?

President Cyril Ramaphosa has earned praise for stating the obvious last week: that business is responsible for job creation. This statement is no great revelation, and fits in squarely with the current international trend in economic management. 

But there is also a growing realisation that business cannot do much on its own. This has been so since the 2008/2009 global financial crisis, which demonstrated the role the state can play in crises to free the arms of commerce. Back then, the US government played the role of lifeguard in bailing out companies like Ford.

If anything, Covid has thrown into sharp relief the role that the state can play. It’s clear, for example, that the creation of critical infrastructure cannot be left to the private sector alone. In SA’s case, the government can derisk private sector initiatives that will ultimately create jobs. So, a laissez-faire attitude to job creation — in which the private sector is seen as being entirely responsible for job creation without any support — is a very narrow approach to capitalism.

But Ramaphosa’s statement was nonetheless somewhat perplexing in the context of his own party’s political approach to SA’s mixed economy.  Under normal circumstances, the SACP and Cosatu would be riled up after such a statement. But they are quiet and have become mere passengers in the ideology-free ANC-led alliance. Maybe Ramaphosa finally realises that his government doesn’t have the firepower to be an immense interventionist state. Or, more cynically, perhaps he knows that the state of the nation address (Sona) has become just an academic exercise in which it’s possible to make promises that are not grounded in reality. 

Either way, Ramaphosa has now delivered six Sonas and has figured out the model: walk to the podium, speak for almost two hours, and resoundingly fail to address the biggest issue facing our economy: Eskom’s finances.

Much of what he says, of course, is cloaked in unrealistic promises, which suggests that last-minute, back-of-a-matchbox ideas can quite easily find their way into the speech.

Here’s one example: in 2019, Ramaphosa announced that a chief restructuring officer would be appointed to manage Eskom’s rebirth. It now seems clear that this was more of a half-baked concept meant to add meat to the Sona pageant than any genuine plan. It speaks volumes that we don’t hear of that office any more. 

There are many other examples where the government has jumped the gun in announcing plans without doing the necessary work first to create solid public policy interventions.

In that vein, Ramaphosa created a buzz this year when he spoke glowingly about the dagga economy and its ability to create jobs. Apparently, there is some BEE mogul which the Eastern Cape government has spoken to about this opportunity. But the bottom line is, there is no sign that his effusive statement on the “Transkei gold” has been backed up by real spadework. 

All of this seems to misunderstand what Sona should be. It ought to be a report back on the culmination of years of work, in line with the government’s medium-term strategic framework. It shouldn’t be just an event designed to unwrap mythical surprises.

The problem with overpromising is that the economic trends you’re seeking to address are real. Businesses will soon feel that the statements are just hollow. Citizens will continue to feel deep hardship. So, come next year, Ramaphosa will have to rely on his public relations charm once again. 

Substance is the missing ingredient. Ramaphosa has even forgotten, it seems, that education ought to be the pillar of a plan to fundamentally change SA. I know of his passion for early childhood development and the value of the foundation phases in education. But none of that philosophy has been infused into his administration’s plans. 

The president is mistaken if he thinks he can simply talk SA into becoming a different country. He needs to reckon with the reality of a broken state. Because, on one thing he is right: the business sector will not succeed on its own.

*Mkokeli is lead partner at Mkokeli Advisory