President Cyril Ramaphosa is a man without a plan to fix the economy in South Africa
Note to Editors: The below speech was delivered in Parliament today by DA Shadow Minister of Finance, David Maynier MP, during the debate on urgent matter of national public importance: Ideas for economic revival following recession.
We all remember the sense of renewal, of revitalisation and of progress following President Cyril Ramaphosa’s first State of the Nation Address on 16 February 2018, and we all remember the announcement of a “new path” of economic growth, of employment and of transformation in South Africa.
However, within just six months that sense of renewal, of revitalisation and of progress, along with the “new path” of economic growth, of employment and of transformation, is dead in South Africa.
The veneer of President Cyril Ramaphosa as the “master negotiator”, who plays the long game, and who has everything under control, that is so popular in big business circles, has been shattered as the economy slipped into recession in South Africa.
Big business, who have been “gazumped” by land expropriation without compensation, are experiencing “buyers remorse”, because they clearly did not get what they “paid for”.
They “paid for” a “Big Mac”, but instead got a “McChicken”, who is too scared to decide because he is too scared to divide an increasingly fractured ANC/SACP/Cosatu alliance in South Africa.
In the end, the fact is that President Cyril Ramaphosa is a man without a plan to fix the economy in South Africa.
We are now in deep economic trouble, with:
- an economy in recession;
- collapsing business confidence, and collapsing consumer confidence;
- a fiscal deficit, a debt mountain and spiralling debt service costs;
- a tanking currency, rising inflation and the prospect of an interest rate increase;
- zombie state-owned enterprises, gobbling up billions of rands in bailouts; and
- sovereign credit ratings agencies’ with fingers hovering above the “junk status button”.
We have a staggering 9.6 million people who do not have jobs, or who have given up looking for jobs, and who live without dignity, without independence and without freedom in South Africa.
The Minister of Finance, Nhlanhla Nene, of course, bungled the reaction to the recession in South Africa.
The poor minister found himself fighting the recession from the side lines of the Forum on China-Africa Cooperation, delivering three key messages, which were:
- that he was surprised by the recession;
- that he was under too much pressure as a result of the recession; and
- that he did not have a plan to fight the recession.
This is extraordinary, given the fact that immediately communicating the positives, to the extent that they exist, and setting out a plan to fight the recession were crucial to maintaining the confidence of the investors, the markets and the ratings agencies.
We know it would have been an act of desperation, but surely the Minister of Trade and Industry, Rob Davies, could have been cleaned up, put in a dark suit and red tie, and rolled out on the “talk shows” to put some positive “spin” on the recession.
However, in the end it was left up to the Minister of Communications, Nomvula Mokonyane, who we can safely say is the most economically illiterate minister, after calling to “just pick up the rand”, to communicate on the recession in South Africa.
The fact is that President Cyril Ramaphosa, despite supposedly being a “master negotiator”, playing the long game, with everything under control, has made a basic mistake and allowed populist reform to kill recovery in South Africa.
We do need a debate about land reform, and we do need to right what was a terrible wrong, but triggering a debate on land expropriation without compensation now was a mistake, because it is killing investor confidence and compromising any chance of a recovery in South Africa.
The tragedy, of course, is that the debate about land expropriation without compensation has nothing to do with righting a terrible wrong, and everything to do with trying to co-opt fake revolutionaries, who wear overalls on the outside, and designer clothes on the inside, in South Africa.
4. Root Cause
In the end, the problem is President Cyril Ramaphosa:
- who does not appear to have any authentic beliefs of his own on the economy;
- who, when faced with tough decisions, is inclined to negotiate, prevaricate and equivocate;
- who, when faced with implementing tough decisions, is inclined to call summits, conferences and dialogues; and
- who is more committed to fixing the politics, and consolidating his own power, than he is to fixing the economics in South Africa.
We should never forget that he was “hired” by Deputy President David Mabuza, and he can be “fired” by Deputy President David Mabuza, who actually has a power base inside the governing party in South Africa.
The fact is that President Cyril Ramaphosa is so weak that he is unable, or unwilling, to stand up to the left in his own party, and, worse, he has allowed himself to be co-opted by the fake revolutionaries in South Africa.
That is why reckless economic policy proposals such as the formation of state banks, land expropriation without compensation and the nationalisation of the reserve bank are, actually, being considered in South Africa.
We can, and we must, give hope to the 9.6 million people who do not have jobs, or who have given up looking for jobs, in South Africa.
With an economic growth rate of 0.7%, which is what we expect this year, it would take 103 years to double incomes in South Africa.
With an economic growth rate of 5.4%, which is what the national development plan envisaged, it would take just 13 years to double incomes in South Africa.
What we need now is a recovery plan focused on boosting economic growth and creating jobs in South Africa.
We have heard several proposals today, but what we have not heard are any proposals about the role that can, and should, be played by Parliament.
We have a role to play and should also give serious attention to establishing a special multi-party committee on economic growth, capable of monitoring and scrutinising the implementation of government’s much spoken about, but little seen, “stimulus package” in Parliament.
We are often told that the problem is uncertainty, but the problem is certainty: the certainty that, every year, for many years, under the governing party, incomes have declined, which means that every year, for many years, the poor have been getting poorer in South Africa.
What we need, in the end, is a new kind of leadership, capable of bold, persistent experimentation, to give hope to the 9.6 million people who do not have jobs, or who have given up looking for jobs, and who live without dignity, without independence and without freedom in South Africa.