A sovereign wealth fund... seriously?

David Bullard says Cyril Ramaphosa's latest SONA was better, but...


This is not saying much but in many ways it was a far better SONA than the last post election one in which the President became misty eyed and dreamed of skyscraper cities springing up around the country full of gleaming new schools and hospitals with state of the art equipment all connected by bullet trains. He also promised the creation of two million new jobs over the next ten years but I’m not sure how well that one is going with just over nine years left to run. I’m guessing not too well.

The one before that, which I attended as a guest of the DA and reported back on exactly a year ago, was just plain uninspiring as far as a plan for the future was concerned. It was the usual waffle, self congratulatory puff and the predictable blame apportioned to the years of apartheid.

The “legacy of apartheid” is the gift that keeps on giving and we must just get used to it being trotted out as the standard response to any suggestion that our ANC government is less than capable when it comes to running a country.


This year’s SONA was a tad more encouraging because it seems that the Pres is now aware of the colossal problems facing the country. Hooray.

We need to fix our public finances.
Low levels of growth mean that we are not generating enough revenue to meet our expenses, our debt is heading towards unsustainable levels, and spending is misdirected towards consumption and debt-servicing rather than infrastructure and productive activity.
We cannot continue along this path

Of course, you could argue that many columnists, economists and political commentators have been saying this for years and it’s about time the President caught up but I think it’s a brave man who dares to stand up in front of his communist comrades and admit that the government is cocking up. Is it possible that the sheer magnitude of the financial mess we are in is finally dawning on those in power?

The promise to tackle youth unemployment and education have now become standard populist fare for a SONA speech and will continue to be so for many years to come. Distributing tablets to ten year olds and coming up with schemes to create jobs for school leavers sounds wonderful but the reality is that our public education system in many areas is so appalling that it will take decades to turn the problem around.

This is why our champagne socialist leaders send their own kids to fee paying schools like Roedean and St Johns and who can blame them? Even if we could tame the teacher’s union, persuade certain male teachers that school girls are not there for their sexual gratification and be permitted to evaluate teachers and kick out the non-performing ones (union says no to that) then any evidence of improvement would be at least two decades down the road.

So the reality is that youth unemployment numbers will continue to grow and the ANC will continue to polish the matric turd at the end of every year and pretend that things are hunky dory.

Don’t even get me started on our universities, some of which only seem to offer an induction course to those who wish to pursue a career in setting fire to PRASA trains. Maybe it’s time to tighten up the conditions of admission with the emphasis on academic excellence.

The Pres said that he was signing performance agreements with ministers in at attempt to achieve some sort of accountability. I’d believe that from Boris Johnson who has a cabinet one third the size of Cyril’s but, since accountability hasn’t been a feature of South African political life for as long as I can remember, why should we believe it now? Which brings me to the Zondo commission, SA’s rival for the long run of Agatha Christie’s ‘The Mousetrap’ in London’s West End. Here’s what he had to say on this, and the PIC commission:

The Zondo Commission of Inquiry into State Capture continues with its critical work with the full support of government and other institutions.
I have received a detailed and voluminous report on the Commission of Inquiry into the Public Investment Corporation. 
I will make it available to the public together with a plan on taking the findings and recommendations forward in a few days”.

Let me now direct my comments to the President.

What I, and virtually every other decent, law abiding South African wants to see is those guilty of corruption in hand-cuffs, a quick trial, confiscation of all stolen assets and, since we don’t have the option of the death sentence for treason, a lengthy time spent in orange overalls. Even the Archbishop of Cape Town wants that.

If the Hawks had swooped on SONA on Thursday night and made the necessary arrests our currency would have rallied, Moody’s might be re-thinking the downgrade to junk and your popularity rating would have soared. It was the perfect opportunity to show some steely resolve but it was yet another opportunity missed.

Instead you told us about the plans to start a ‘Sovereign Wealth Fund’ (SWF). I’m not too sure where to start on this without sounding condescending but you do realize that to start a Sovereign Wealth Fund you first need wealth don’t you? Norway has over $1 trillion in their fund and they are regarded by the World Bank as the wealthiest country in the world.

Other countries with SWF’s include the United Arab Emirates, Kuwait, Singapore and China and the common denominator is accumulated wealth, often by the sale of oil or gas. We don’t even figure because we have accumulated debt and are near beggar status.

Norway also doesn’t have the unfortunate history of having a kleptocratic government and practices the sort of socialism that most countries can only dream about. Their 5 million citizens have everything provided for from the cradle to the grave and that seems to work for them.

I visited Oslo a few years ago and, while it’s not a cheap destination, it is spotlessly clean, efficient and it works. Who would have ever imagined that those marauding Norsemen back in the first millennium could have ever got it so right?

The suggestion that we could have a Sovereign Wealth Fund while there are huge holes in the Eskom, SAA, SAPO etc etc balance sheets and while stories like Harrismith’s collapse feature on BBC World reports is pure Lala Land. And it’s stuff like that which makes us all wonder whether the ANC isn’t living in some strange parallel universe and whether anything can ever improve. Call it negativity if it makes you feel better Mr Pres but I prefer to think of it as pragmatism and nothing that’s happened in the past fifteen years gives me any reason to change that view.