The state of the nation is terrible. Government is committed to making it worse. Saint Cyril won’t stand in its way.
By Ivo Vegter
Cyril Ramaphosa was never going to be South Africa’s saviour. Despite the rather embarrassing Ramaphoria among the commentariat when he became South Africa’s president in 2018, he has been a disappointment even to his most ardent fans.
On 15 February 2018, Ramaphosa ascended to the august office of president of the country, recently vacated on the recall of his venal predecessor, Jacob Zuma – whom Ramaphosa had faithfully served as deputy president. A day later, he delivered his inaugural State of the Nation Address (SONA).
Very little of the content was his, of course. You don’t write a speech like that in a day. The venerated Saint Cyril, the liberator of South Africa from the clutches of the corrupt Zuma faction, was merely channelling the ANC.
Yet this was his ‘new dawn’ speech. His ‘thuma mina’ (‘send me’) speech. Drunk on the wine of Ramaphosa’s promises, observers – from journalists to investors – lapped it up.
This could not stand. I promptly penned a column for Daily Maverick, in which I warned that a smart, charismatic socialist is a dangerous socialist. I pointed out the pipe dreams, ideological dogma and contradictions in his speech.
In that first SONA, Ramaphosa already floated many of the ideas that we’ve heard in every SONA since. He sought to woo foreign investors with one hand, while with the other proposing to expropriate property without compensation.
He promised to employ one million youths. He promised that the state would gamble taxpayer money on entrepreneurs and start-ups. He described mining and agriculture as ‘sunrise industries’. He said the tourism industry could easily double in size. He promised to ‘re-industrialise on a scale and at a pace that draws millions of job seekers into the economy’.
Yet he also promised a national minimum wage, which would inevitably depress employment numbers.
He promised a larger government that would do more for the people. He promised a mandatory National Health Insurance monopoly that would cover the medical expenses not only of poor people who needed assistance from the state, but also of the rich who don’t need that assistance and are perfectly happy to pay for themselves.
He committed to the African free trade agreement on one hand, but on the other promised a protectionist ‘buy local’ programme, just as John Vorster and PW Botha did with their exhortation to ‘Koop Suid-Afrikaans’ in the dark days of Apartheid.
‘Do not mistake Cyril Ramaphosa for anything other than a committed socialist,’ I wrote. His policies were those of the National Democratic Revolution, penned by the South African Communist Party as ‘the most direct route to socialism’.
After the SONA of 2019, I pointed out his unfulfilled promises, and what he’d have to do to make good on his new promise, namely recovering South Africa’s place in the top 50 of the World Bank’s Doing Business Report.
At the time, the country was ranked 82nd, way down from around the 30th mark at the end of the Mbeki era. In the most recent report, South Africa is ranked 84th.
In it, he promised to teach robotics and coding in Grades R to 3, even while reporting that children in Grade 4 are still largely incapable of reading for meaning.
He said SAA is a perfect example of state capture, corruption and mismanagement, and that it should not be dependent on further government funding. Yet government bailed out that rotting zombie yet again, ensuring that the jet set can go places and the politicians can get free flights, while the great mass of the people wait patiently for government to beg, borrow or steal enough money to buy vaccines.
He waxed lyrically about building smart cities, as if they don’t require an uninterrupted supply of electricity and functioning traffic lights. He dismissed those who failed to appreciate the progress that had been made as ‘permanently negative’.
Ferial Haffajee, in the Daily Maverick, has been tracking Ramaphosa’s promises systematically since 2018. Her look back at the 2019 SONA in 2020 and her assessment of the 2020 SONA in 2021 both make an excellent case for being ‘permanently negative’.
Burn it down!
This is not just ideology speaking. Business confidence has collapsed to its lowest level since the index was launched in 1985, for reasons Ed Stoddard eloquently explained. Consumer confidence is also near record lows.
I elaborated on previous assessments of SONA not to be able to say I told you so, nor even to remind us how similar the 2021 SONA sounded to those that went before. I did so to emphasise that the state of the nation was terrible long before it was struck by the Covid-19 pandemic, which punched the economy in the gut, and the national lockdown, which kicked it while it was down.
That brings us to this year’s SONA. Once again, it was entirely forgettable. It’s as if Ramaphosa believes he can change things for the better simply by uttering vacuous inspirational niceties.
He took a leaf from finance minister Tito Mboweni’s book by opening with a botanical metaphor. At least Mboweni’s aloe ferox metaphor made sense, signifying an economy struggling valiantly in harsh conditions. Ramaphosa, however, chose to compare the country to fynbos, which needs to suffer devastating fires every few years in order to thrive.
Does Ramaphosa really believe that a country, or an economy, needs to be destroyed every so often to make it better? If so, I’d like to be the first to congratulate him on a job very well done. The government burnt the South African economy well and truly to the ground in 2020, and in large part for little or no benefit at all.
Of course, the metaphor does fit very well with the idea of revolutionary socialism, in which the ownership basis of capitalism needs to be destroyed in order for the state, in the name of the proletariat, to assume control of the means of production.
Early on in the pandemic, I noted that using lockdowns to destroy the middle class and small businesses fits with the ANC’s agenda, quoting minister Nkosazana Dlamini-Zuma: ‘COVID-19 also offers us an opportunity to accelerate the implementation of some long agreed-upon structural changes to enable reconstruction, development and growth. These opportunities call for more sacrifices and – if needs be – what Amilcar Cabral called “class suicide” wherein we must rally behind the common cause.’
Our ‘economic recovery’
Ramaphosa said that this year, ‘we must accelerate our economic recovery’.
Pray tell, what recovery would that be?
Economic growth for 2020 was -7.2%. Before the massive blow in the second quarter of 2020, growth had been negative in six of the previous ten quarters. It has been hovering around zero since 2014. There was no sign of an economic recovery, then or now.
Investment as a share of GDP fell from between 18% and 19% when Ramaphosa took office, to 14% when the pandemic hit, to less than 11% at last count, in the third quarter of 2020. That’s not a recovery.
The unemployment rate, which was 26.7% by its narrow definition at the start of Ramaphosa’s presidency, steadily rose to 30.1% prior to the lockdowns, took a sudden nosedive because people who weren’t permitted to leave their homes to look for jobs weren’t counted as unemployed, but rebounded to its highest level ever in the third quarter of 2020, at 30.8%.
Other than a dead-cat bounce from the depths of hard lockdown, there is no recovery now, and there was no recovery before Covid-19 struck. As Ramaphosa acknowledged, ‘Poverty is on the rise. Inequality is deepening.’
So there is no recovery to accelerate.
Ramaphosa claimed to be standing there ‘not to make promises but to report on progress in the implementation of the recovery plan and the priority actions we must take to restore growth and create jobs’.
Yet he had very little of major significance to report, except to revisit his dream of ‘smart cities’, in which Apartheid-era spatial development would finally be done away with.
It’s a noble dream, in that sense. One of Apartheid’s ugly legacies was the situation of black townships on the periphery of every city and town in South Africa. Although a new black middle class has arisen and moved to formerly white areas, the townships and squatter camps remain a blot on the socio-economic face of the country.
This won’t be solved by a government building new cities, however.
It might be solved, gradually, by granting people living in those townships full ownership over their properties, giving them incentives to maintain and improve them, sell them, or use them as collateral to raise money to start businesses. Ramaphosa said nothing about redistributing state-owned land to the people who live on it, however.
But he does have master plans, based roughly on the master plan for the automotive industry, in which the state offers tax breaks and levies import tariffs to protect the domestic automotive sector.
Those tax breaks and import tariffs are costs imposed on South African taxpayers to fund multinational car manufacturers that largely produce luxury vehicles for export to rich people in Europe.
For all his nice words about small business, Ramaphosa’s priority seem to be to keep his big business cronies happy, instead.
While government has ‘worked closely with the auto sector to help it weather the pandemic’, Ramaphosa said nothing about the tourism, hospitality and restaurant industry, which has been crippled by interminable lockdowns, travel bans and repeated prohibitions on alcohol sales.
The master plans government will roll out to protect inefficient industries by making consumers pay more will now be extended to poultry, sugar, and clothing, textiles, footwear and leather.
‘Ease of doing business’
Ramaphosa claims to have ‘worked to facilitate investment by increasing the ease of doing business, including making it easier to start a business’.
It is true that starting a business is easy, and can be done in a matter of hours from the comfort of a laptop, as he explained. As the country’s further slide down the World Bank Doing Business ranking shows, however, it is not easy to do business.
Businesses are beset by regulations. Arrayed against the would-be entrepreneur are onerous labour laws, minimum wage laws based on what big business can afford, black economic empowerment laws, unpredictable load-shedding, and even more unpredictable lockdown regulations. All this makes it extremely hard to do business in South Africa.
Instead of relaxing the state’s hands around the throat of business, Ramaphosa promises to double down: ‘we must accelerate the implementation of broad-based black economic empowerment policies on ownership, control and management of the economy’.
So much for ease of doing business.
Ramaphosa said ‘Eskom is making substantial progress with its intensive maintenance and operational excellence programmes to improve the reliability of its coal fleet.’
Eskom would beg to differ. It has reported that its energy availability factor has been at record lows for the first five weeks of 2021. Year-to-date, it was able to produce energy from 57.8% of its installed capacity, compared to 65% for 2020. In turn, 2020 was worse than 2019, which was worse than 2018, which was worse than both 2017 and 2016. The heyday of 86% energy availability is now a decade in the past.
More than 25% of Eskom’s generating capacity suffered unplanned outages in 2021, compared to less than 21% in 2020.
Installed capacity is predicted to decline in 2022 and 2023, as planned shutdowns of end-of-life power stations exceed the amount of new generation expected to come onto the grid. It will recover slightly by 2024 when all Kusile units are expected to be in operation, although with Eskom, perhaps it is wiser not to expect what it expects.
Ramaphosa himself admits that ‘there will be an electricity supply shortfall of between 4 000MW and 6 000MW over the next five years. According to energy analyst Chris Yelland, we should expect the worst load-shedding yet in 2021.
There is no story of ‘substantial progress’ in these numbers. On the contrary. Everything is pointing in the wrong direction.
Ramaphosa waffled some about ‘improving educational outcomes’. If he has any clue how to achieve this – by breaking the power of the South African Democratic Teachers’ Union which makes it impossible to hold failing teachers to account, for example, or introducing school vouchers – he did not let on.
He said: ‘We are repositioning Durban as a hub port for the Southern Hemisphere and developing Ngqura as the container terminal of choice.’
This makes no sense at all. By sea, South Africa is about as remote from the rest of the world as it gets. The Suez Canal made the long and dangerous Cape of Storms route obsolete in 1869.
South Africa is also a poorly located hub for African trade. There is hardly any decent overland freight infrastructure into the rest of sub-Saharan Africa.
Pinning hopes of an economic recovery on becoming a shipping hub hardly builds confidence in the country’s master planners.
He mouthed a line or two about our rail system, but he has yet to deliver on any of his previous promises involving trains, particularly in curbing the vandalism, destruction and looting of passenger trains and stations. I suppose we ought to be relieved he didn’t revive the delusional idea of a bullet train.
The solution to the problem of chronically bankrupt, corrupt and mismanaged state-owned enterprises is apparently greater centralised control and new overarching legislation. In the minds of Ramaphosa and the ANC, central planning is a marvellous idea. This time, it will work, pinky-swear!
He also made more promises about honesty, ethics and integrity in the public service, and greater accountability for cabinet ministers.
‘We remain on course to build a capable and professional civil service that delivers on its mandate and is accountable to the South African people,’ he said, as if government has ever been on such a course.
Likewise, he told us about the great strides that have been made in dealing with corruption, although these strides have yet to lead to a substantial number of significant prosecutions.
A different, better South Africa
Very few of the promises he made have any credibility, and most of the policy proposals he advanced will in reality drive South Africa further into a stagnant morass of state control and dependency. One can only wonder how Ramaphosa thinks Covid-19 has presented us with ‘an opportunity to build a different, better South Africa’.
Different? Yes. Better? No.
The vision that Ramaphosa has for South Africa, disjointed as it is, is nothing other than the hackneyed old socialist vision of the National Democratic Revolution, coloured by a heady dose of African nationalism.
The one thing Ramaphosa is right about is that South Africa is populated by ‘everyday heroes that walk among us, who work hard every day to put food on the table, to keep the company running, and to give support, help and care to our people’.
We are indeed a nation of resilient people. And, boy, are we ever going to need that resilience in the years ahead.
The views of the writer are not necessarily the views of the Daily Friend or the IRR