William Saunderson-Meyer
3 minute read
5 Jun 2021
2:07 pm

Ramaphosa needs an Mbeki-esque reality check

William Saunderson-Meyer

Whatever you may say about the Mbeki era, at least it had some kind of grasp of reality.

Former president Thabo Mbeki and George Bizos during the Nelson Mandela centenary celebrations at the former statesman’s Houghton home on July 18, 2018 in Johannesburg, South Africa. According to the Nelson Mandela Foundation chief executive Sello Hatang, Mandela’s house in Houghton will be refurbished and turned into a five-star hotel for tourists. (Photo by Gallo Image / Sowetan / Thulani Mbele)

In the early years, there was an effort on the part of ANC leaders to keep expectations in check.

There was also a willingness to compromise on ideological issues.

Whatever the hard-line blather, it was the party’s pragmatists who held sway. Thabo Mbeki and most of his Cabinet ministers recognised the importance of keeping some fix on reality.

Sadly, that has substantially changed.

It’s an irony that we now have a billionaire president whose preferred method of dealing with radical economic transformation is to appear to be the most radical of the radicals.

This is reflected in President Cyril Ramaphosa’s enthusiasm for a slew of disastrously conceived projects, including expropriation without compensation, National Health Insurance and now Trade Minister Ebrahim Patel’s dirigiste reindustrialisation plans.

This detachment from actuality is not only an ANC phenomenon. It is pervasive.

This week’s Stats SA figures show that official unemployment has reached its highest level in 13 years, with 33.6% joblessness. And despite a surprisingly strong economic revival from 2020, at least 1.4 million jobs have been lost.

Unemployment among the youth (the 15 to 34 age group) is 46.3%. That means at least 11 million cannot find work.

Job losses are inevitable when the economy is in trouble. Employment normally rebounds on the growth upswing. That’s not happening.

Employers are keeping payrolls as tight as possible. One of the reasons for this is our ridiculously pro-union regulatory framework and union militancy.

There appears to be no comprehension here, on the part of unions, that with growing unemployment, their power is steadily diminishing. And the unemployment time bomb has just started ticking.

Until now, all job shedding has been in the private sector.

But public service job security is becoming increasingly difficult for the government to guarantee.

This week, arms manufacturer Denel joined a growing list of state-owned entities that cannot pay their wage bills.

Denel employees have been paid only 20% of their May salaries.

PetroSA also had to send out a May Day signal.

The government has just coughed up an emergency R800 million cash injection because it, too, couldn’t meet the May payroll.

The SA Post Office (Sapo) has been inventive. A Sapo spokesperson admitted that for more than a year, the only way that Sapo was able to pay its employees was by illegally hanging on to their pension and medical contributions.

Sapo now owes these service providers R842 million and admits Sapo, too, is “technically insolvent”.

Organised labour suffers from the same reality gap as the government.

The public sector unions affiliated with the SA Federation of Trade Unions this week rejected the government’s 1.5% offer. They are adamant that they will accept nothing less than 7%, about double the rate of inflation and coming on top of a decade of above-inflation settlements.

Cosatu’s public sector affiliates want even more. They’re demanding 8.3%, as well as a 12% “Covid-risk” payment. These are obviously ludicrous demands but they are being pursued with flinty determination.

And in any powerful governing alliance, it’s easy for delusions to thrive unchecked.

At some stage, however, reality will kick in.

The rate at which events are running away from Ramaphosa signals that this might be sooner rather than later. When the crunch comes, Ramaphosa is going to need some of that Mbeki pragmatism.