EDITORIAL: Here’s Mokonyane’s chance to ‘lift the rand’
It’s high time that the economic duncerati in the ANC left it to Tito Mboweni. After all, they’ve had their time to ‘pick up the rand’ and they’ve failed
Now is the time for Nomvula Mokonyane to shine. Let’s hope she’s been hitting the gym hard. Because this, right here, is the moment she promised three years ago after the night of the long knives, when her ally, former president Jacob Zuma, sacked most of the cabinet, sparking a ratings downgrade.
"Let the rand fall," said Mokonyane famously in April 2017 after Fitch and S&P downgraded SA to junk status, "we will pick it up."
Yet, when her moment arrived on Friday, after Moody’s became the last of the ratings agencies to downgrade SA to junk status, and the rand plummeted to R18 to the dollar (down from R14 in January) there wasn’t a peep from the former water & sanitation minister. In fact, the only real reference to Mokonyane in recent weeks was a report by the German-based Water Integrity Network, which detailed how R4bn was lost in "irregular expenditure" during Mokonyane’s tenure as minister. Not exactly flattering stuff.
True, Mokonyane doesn’t really have a soapbox from which to lift up the rand: last May she withdrew as an ANC MP because of "family responsibilities" (nothing to do with being accused of taking bribes by Angelo Agrizzi). But she is still a member of the ANC’s national executive committee, so there is that.
Still, Mokonyane’s fighting words were typical of so many politicians in the heady months before Zuma’s axing: aggressive economic foolhardiness, characterised by a toxic mixture of pig-headed arrogance and startling, wilful fiscal illiteracy.
Many of her ilk faded into the shadows as the economic meltdown became apparent. Others, however, still have no problem pronouncing on the economy, and the ratings agencies, despite being fatally ill-equipped to do so.
Public protector Busisiwe Mkhwebane, in 2019, tweeted: "God deliver us from these rating agencies and oppressors of the downtrodden for economic freedom in our lifetime."
Mkhwebane, of course, has no idea what she’s talking about. Blaming a ratings agency for diagnosing the economy is like blaming a doctor for telling you you’ve got cancer.
If anything, Moody’s deferred the diagnosis until there was no chance it wasn’t cancer. The two other agencies, Fitch and S&P, had SA in junk status three years ago.
Other critics piled on this week. The SACP, for example, "denounced" the action by Moody’s, saying it was "heartless, insensitive and inconsiderate". The SACP — which, let’s remind ourselves, is still an alliance partner of the governing party — even accused Moody’s of wanting to "usurp economic policy formulation from democratically elected governments". The SACP, no doubt, would also accuse the cancer-diagnosing doctor of being part of a "class agenda" and a "neoliberal manoeuvre to impose corporate capture". The National Education, Health & Allied Workers’ Union, an affiliate of Cosatu, was as clueless, calling Moody’s "depraved".
The truth is, this downgrade is already costing us. The fall in the rand makes imports more expensive, and prevents SA from getting the full benefit of the drop in the oil price. At least $2bn in foreign investment (in government bonds) will leave the country, and it’ll cost the state more to borrow money, which has to be repaid.
But tell that to Danisa Baloyi, the former Black Business Council president and Zuma ally who said in 2017 that a downgrade didn’t matter, since "many South Africans don’t have billions on the stock exchange".
Luckily, the person speaking the most sense on this issue, who knows all too well what’s at stake, is finance minister Tito Mboweni. It’s high time that the economic duncerati in the ANC left it to him. After all, they’ve had their time to "pick up the rand" and they’ve failed.