Quick take: On President Ramaphosa’s economic advisor saying naysayers should stop talking the economy down
Trudi Makhaya – President Ramaphosa’s economic advisor – wrote a prickly op-ed in Business Day this week. In a very elaborate way, she basically accused some in our public discourse of being unduly negative about our economic policy, management and prospects. This negativity, she posits, depresses sentiment among potential foreign investors and partners, as well as business and consumer confidence.
An excerpt (highlighted section in bold):
“The world has become impatient with SA. The hard economic facts are beyond dispute. But homo narratives that we are as a species, these facts are wrapped into crude, essentialist narratives. When we are considered at all in global platforms, we are spoken of as a nation slipping into post-liberation dysfunction. Too many South Africans aid and abet this narrative. The assumptions, conspiracies and prejudices that fuel doomsday narratives in the radical trenches or in cloistered boardrooms wear down business and consumer confidence.”Trudi Makhaya. ‘Flawed narratives about SA’s economy have real effects’. Business Day. 07 February 2021
I found this extraordinary.
Firstly, we are not even slipping into it, we currently are in post-liberation dysfunction. A 13-year and counting electricity crisis. Rampant corruption, even over the procurement of PPE in a pandemic. ANC politics continuing to take precedence over national interest in government policy and implementation.
Yes, “too many South Africans” are tired of these still unaddressed problems which their well-paid public representatives continue not to solve.
Secondly, this is terrible timing, self-indulgent and defensive. President Ramaphosa has been in office for three years. Confidence is low because we are tired of promised action, we want decisive action and outcomes. She should be detailing economic achievements. Tell us progress on key reforms, even if the impacts on economic conditions are still to come.
We are in a double crisis – the pre-pandemic economic crisis on top of the pandemic economic crisis – and President Ramaphosa has little to show for his time in office besides talks, processes and summits. And you have the s’bindi to write an op-ed telling us that it is naysayers that are the problem?
You should be too busy driving through reforms to write such op-eds. You should be sitting on Minister Mantashe’s shoulder pressuring him to unblock private energy generation. You should be sitting on Minister Ndabeni-Abrahams shoulder to auction telecoms spectrum which government has been promising for years.
Thirdly, Makhaya sidesteps valid critiques of the ERRP. She focuses on the most radical proposals, such as those arguing we should apply MMT and print money to finance massively increased economic stimulus. What about other critiques? To name but three:
1. The ERRP falls into the same trap as the NDP and other plans, it is big and complicated and does not acknowledge government’s limited capacity. When pressed, government tacitly acknowledges that we don’t have a capable state, so surely we should focus on a few high-impact priorities and reduce items which depend on government planning and rule-setting (like product localization targets)
2. While the plan does include export promotion, it fails to center export-led growth as the core of our economic strategy.
3. Makhaya dismissed those who point to poor implementation as being too wedded to the Washington Consensus. A look at energy policy easily disproves this. Energy is the lifeblood of the economy. Government had good policy (the 1998 Energy white paper) which called for the state to usher in private generation from mixed sources, which it didn’t fully implement. In three years, President Ramaphosa has been unable to resolve the electricity crisis when it is the single biggest constraint limiting growth and holding down confidence. In part because his Minister of Energy, Gwede Mantashe, is slow-walking liberalization of energy for political reasons. Imagine if President Ramaphosa was able to say in this week’s SONA that load shedding was a thing of the past? Rather than make the inevitable promises that it will be resolved – definitely this time – in the coming year.
Ramaphosa and his team look increasingly out of touch.