Sunday, August 13, 2017

SA’s economy simply cannot afford the destructive ANC for two more years

A woman holds a photo of late anti-apartheid

A woman holds a photo of late anti-apartheid activist Ahmed Kathrada as she takes part in a protest in Johannesburg calling call for President Jacob Zuma to resign.  PHOTO |FILE 

By Dawie Roodt

President Jacob Zuma has survived yet another vote of no confidence, but don’t despair, they say, because we may just be able to get rid of him some other way.

There are a few looming court cases that may start the process, or maybe some political developments can eventually result in Zuma getting the boot.

Maybe, and this is a very BIG maybe, the ANC suddenly realises what good governance means and puts the country first at their electoral conference. So, don’t despair, they say, there’s still a chance of getting rid of Zuma and then all will be ok. Well, they are wrong!

For even if we somehow do get rid of the embodiment of incompetence, corruption and mismanagement, the fabric of the ANC has been polluted and no new leader, no matter how competent, can prevent a further deterioration in the lives of most South Africans.

This government has simply caused enormous damage to our economy and has lost most of its legitimacy. No leader from the ranks of the current political elite can replace Zuma and be strong enough to implement the required changes.

Only an extremely strong leader will be able to dislodge the evil grip of the established rent seekers.

Nearly all levels of “government”, local, provincial, national, many other state-related institutions and state-owned enterprises have been compromised. Nearly all important indexes, rankings and ratings are pointing to a country in anguish.

Even the state’s own watchdog, the auditor general, has become a hoarse barking. We are in deep, deep trouble. What needs to be done is easy to understand, but politically it is only possible with a very strong electoral mandate. Additionally, doing what is right is likely to lead to even more suffering before things get better. No Zuma replacement will have the power to do it.

What needs to happen is to get rid of incompetent [and often corrupt] civil servants, everywhere! And only an extremely strong leader will be able to dislodge the evil grip of the established rent seekers. As soon as it becomes clear that a cleanup has started, massive resistance from the ineptocracy will halt the process.

The next leadership will be faced with the tremendous task of rebuilding the South African economy. Or imagine this new leader starts selling state assets, or actually reducing the army of civil servants, or liberalising labour legislation, or expects good quality education and health services. Just imagine how the ANC’s alliance partners will react.

Just imagine how senior politicians and bureaucrats will react when they realise we do not need a department of tiny businesses, or a department of children, the weak and women, or two education departments or even a department of sport. What on earth is the function of the department of sport?

Does anybody really believe a new president will be able to do these things? Of course not, which means we will have at least two more years of ANC destruction ahead of us before a general election gives a new mandate to new leadership.

And even with a new mandate, the next leadership will be faced with the tremendous task of rebuilding the South African economy. This task is likely to take at least 10 years before the economy is back on the growth trajectory it was on before the great destruction.

South Africans should expect further increases in unemployment and poverty.

And during the first few years of the new [hopefully competent] administration, the economy will go through a very painful adjustment phase as state spending is cut, state-owned enterprises’ balance sheets are fixed and useless civil servants forced on to the streets. For that, you need a strong political mandate.

In the meantime, expect the economy to remain on a growth trajectory of around one percent -– if we are lucky. Expect further increases in unemployment and poverty. Expect more social tension and protests and little investor confidence. Also, expect those with assets to be rational and to diversify their portfolios abroad, expect a weaker currency, higher inflation and even more social tension.

Getting rid of Zuma will be a great start but the difficulties this economy faces can only be dealt with by a new political mandate.

That is why we need an election. (The Huffington Post, SA)

Dawie Roodt is chief economist of The Efficient Group