Cyril Ramaphosa. Picture: GCIS
Cyril Ramaphosa. Picture: GCIS

Tomorrow, President Cyril Ramaphosa will present parliament with a plan to save the economy. It had better look a great deal better than the one presented to the cabinet last week, or SA is in more trouble than we thought.

The 50-page presentation lacks the clarity of the National Economic Development & Labour Council (Nedlac) economic recovery document it was built on. If that plan had been implemented a few months after Ramaphosa assumed power in 2018, SA might be a different place today.

Instead, the coronavirus has shattered what little confidence remained. Turning it around will require a focus not evident in the latest Economic Reconstruction & Recovery Plan (ERRP).

This is not to say it doesn’t contain positive reforms. The highlights include commitments to enable the self-generation of energy; unbundling Eskom; finalising spectrum allocation; allowing private rail concessions; ramping up infrastructure using private resources; accelerating the shift from road to rail; and “reorganising and repurposing” state-owned enterprises.

Also positive is the recognition that fiscal sustainability is fundamental. The paper explicitly commits the government to “ensure fiscal prudence”, including in the management of the wage bill, and to “drastically improve” the efficiency of government spending. (And yet, there is no mention of SAA.)

There is a whole slide dedicated to ending corruption. However, it excludes a key recommendation from the Nedlac document — that the ban on public servants doing business with the state be extended to politically exposed persons.

Other tough trade-offs have also been excised.

The commitment to review SA’s labour market arrangements has gone, as has the commitment from business to observe localisation targets, reskill redundant workers and use retrenchments only as a last resort.

In the same breath, it asserts that a strong social compact is essential to recovery. But what is that other than a pact in which each side sacrifices something for the common good? Instead, there is the whiff of vested interests — nowhere clearer than in the commitment to prepare for a new nuclear build programme.

At a minimum, the ERRP should prevent the automatic extension of collective wage agreements struck between big business and big unions to small firms, as this prices low-skilled, entry-level workers out of the market. The economy won’t become more labour-intensive until this practice is halted.

Also missing is the section on building a capable state, which is odd given the widespread acknowledgment that the public service is pathetically weak at policy execution.

At least half of the old National Development Plan, for example, was dedicated to institutional reform to improve accountability and service delivery because its authors, who included Ramaphosa, were worried (correctly) that the state was incapable of implementing it.

It’s an indication of how far we’ve fallen that Ramaphosa wants to put the National Command Council — a bungling committee of 19 cabinet ministers, including the head of the police and defence force — in charge of economic policy.

It seems likely the government will deliver at least some of the ERRP’s reforms, but the sad reality is that SA has left it too late. The economy must now sprint from a standing start, while following a map that meanders all over the place.

On the basis of this spineless plan, growth will remain pedestrian and job creation limited. Yet at this point, SA cannot afford to get it wrong; this may be the last chance to halt the economy’s downward slide.

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