Mind the Ramaphosa credibility gap

William Saunderson-Meyer on yet another govt economic stimulus and recovery plan


Wash. Rinse. Repeat. And now, spin.

President Cyril Ramaphosa has announced the government’s umpteenth economic stimulus and recovery plan of the past decade. There will be “growth enhancing” reforms, public spending will be “reprioritised” to create jobs, infrastructure will be funded and there will be investments in municipal “social infrastructure”, as well as improvements to health and education. 

If it all sounds familiar, it should. It’s the National Development Plan (NDP). It dates back to 2009, when it was first mooted, to be finalised in 2012, supposedly to deliver a new South Africa by no later than 2030. Just coincidentally, the deputy chair of that NDP commission was one Cyril Ramaphosa. 

Unsurprisingly, given the inability of the left wing of the African National Congress alliance to co-operate with the right wing, nothing happened with the implementation. And now, all that Ramaphosa has done, is to take a few of the less ideologically explosive bits of the NDP, dressed them in spandex and sprinkled some stardust, to trot them around the ring one more time.

While there appear to be no limits to the gullibility of South African voters regarding these issues, that’s not true of the markets. Despite the slick promises of economic reform and fiscal rectitude from the Ramaphosa administration, there is international scepticism. 

Currency weakness continues, the country has slid into recession, and employers are continuing to shed jobs. Ratings agency Fitch was blunt, saying that the latest plan was “unlikely” to significantly boost economic growth.

Ramaphosa has, says Fitch, “limited fiscal space” for manoeuvre. In any case, while the plan does, indeed have several aspects to it that conceivably could support economic growth, “many relate to long-standing policy ideas that have been slow to implement”. 

The flipside to the government's inability to implement good ideas, has been its inability to correct what are patently stupid ideas. An example in point is the decision this week by Home Affairs Minister Malusi Gigaba to ease visa regulations, in order to encourage tourism and stimulate economic growth.

The key regulation to be thrown out the window is the extensive documentation that was required for a minor to travel. Introduced with the best of intentions, to prevent child trafficking, the regulation was so onerous — requiring unabridged birth certificates and affidavits of parental permission — that it seriously damaged tourism when it was introduced in 2014.

It is estimated that every seven visitors to SA sustain one job. The government was warned at the time that the regulations, more onerous than anywhere else in the world, would have a devastating effect on the tourism sector.

And that is exactly what happened. Although there has since been some recovery, airline ticketing dropped by 20% in a year, while travel from India and China, alone, dropped by more than 50% and shed R7bn in revenue.

Flustered, the government promised, late in 2014, an inter-ministerial task force to sort out the matter. In the face of Gigaba’s intransigence, it was never convened. 

The promise was reiterated in Pesident Jacob Zuma’s 2015 state of the nation address. Gigaba simply refused to budge and nothing happened.

Derek Hanekom, Tourism minister of the time, spluttered his protest. Gigaba held firm.

Jeff Radebe, then minister in the Presidency, promised at the World Economic Forum meeting in Cape Town in 2015 that the regulations would be revised “as a matter of urgency” because of the disastrous “unintended consequences”. Gigaba sneered his defiance.

Now, after almost five years of paralysis, this reckless and destructive set of regulations has at last been dumped. Gigaba, the person who caused the chaos, however still sits in the cabinet, and is an important part of Ramaphosa’s “new dawn” team.

This is the challenge facing Ramaphosa. There is widespread consensus regarding the direction he claims to want to take SA, if for no other reason than after drifting aimlessly for a decade, almost any course is better than none. 

Yet, given the track record of the ANC at executing policies, rather than just drafting them, there is scepticism. The ship of state is still crewed by largely the same mutinous buffoons that sailed it into the doldrums in the first place.

Wash. Rinse. Repeat. It’s the same old flannel recycled endlessly and it's getting threadbare.

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