Nathan Oliphant argues that the ANC policy document on economic transformation does not go far enough to radically altering the shape of the economy, omitting key interventions such as the creation of a state bank and a state infrastructure company
A Sunday at midday. The media had gathered at Luthuli House for a press briefing. The president had finally made his cabinet reshuffle after a prolonged period of speculation. It was the story of the weekend and even more so, members of the ANC’s top 6 had broken ranks, they had spoken out. This is what media was after.
Yet they were not going to get what they came for. Instead they were presented with the Battle of Ideas discussion document, presented by Jackson Mthembu, chairperson of the NEC’s subcommittee on communications.
Though Mthembu is a media darling, calling at one stage for the entire NEC to resign, but himself refusing to resign, the media gathered that Sunday lunch-time were not interested in the battle of ideas. They never are; their editors want the battle of persons. True to form, Mthembu gave his blurb at the end. Even he couldn’t resist the temptation of being in the headlines again.
What the media found as newsworthy, the ANC found as a non-event. As the media was engrossed with the personality clashes of politics, ANC structures across the country were discussing documents in preparation for the National Policy Conference, scheduled for the end of June this year.
Yet the loud echo coming from ordinary people across South Africa, and members of the ANC as well, is one calling for radical economic transformation. After twenty-two years of freedom, it is time to taste the fruits of freedom, the people say.
As some of us are aware, the Indian economist Amartya Sen suggests that it is only through development that we are able to attain freedom. When we are unfettered by the chains of poverty, unemployment and inequality, only then will we be able to enjoy even political freedom.
Even if we were to practice democracy in its most minimalist approach, through elections, questions could be raised at just how free and fair they truly are. What is the standard we use for “free” and “fair”?
When the conditions in which people vote are so vastly different we must be able to ask whether our elections are free and fair. uGogo has to walk kilometres to the nearest voting station which is in a tent and which probably has to use a generator for electricity. She really has to be convinced to go and vote when the weather is not good because it will affect not only her walk to the voting station but the voting station tent as well. Inevitably she will also have to contend with standing in a long queue, in the rain.
In the suburbs, John, who has just turned eighteen, travels in one of his family cars with one of his parents. He has an option, either to go early with mom or later with dad. He could walk but the voting station, in the well-equipped municipal hall, is a street or two away. No queues, and if he is lucky, John will get a biscuit with the hot coffee served at the station.
Invariably, our democracy, even in its minimalist form, suffers because the majority of people, who are poor, no longer come out to vote.
Unfortunately, there is hardly anything radical about the proposals made in the economic transformation discussion document put out by the ANC subcommittee headed by Enoch Godongwana. In fact, social media commentary focused on his dismal performance in presenting the uninspiring document.
Godongwana is anything but radical and certainly represents the ANC brand that has been protecting the apartheid structure of our economy up until now; twenty-three years into democracy.
Land. A subject which is almost on every South African’s lips and which holds the potential of unlocking economic transformation radically is given a recycled paragraph. Not much different proposed even after twenty-three years of land reform failure in South Africa. Inroads were made but not as fast as the people want.
The proposal of a state bank, made at Mangaung, is conspicuous in its absence. If we have learnt anything from the South African Social Development Agecy (SASSA) saga, or SASSA non-saga, then it is the need for a state bank.
A over a half a trillion Rands has been budgeted for social grants in the next three years. R1.5 billion went unspent in the last financial year because those who were meant to apply for grants did not. In other words, there are some South Africans, at the brunt of the interface between poverty and unemployment, who are falling through the cracks. No shouting about this by the chattering classes.
SASSA should be paying attention to this gap but while SASSA gets its house in order it qualifies Social Development as one of the major departments for underspending.
Needless to mention, the other advantages that a state bank could hold for especially the poor of the country. The infrastructure, in the form of Postbank, is there with the bank reporting that it has more Mzansi account holders than any other bank in the country, including the four major banks. Currently, there are approximately 13 million grant recipients. The largest commercial bank in South Africa, Standard Bank, has near to 12 million accounts.
In 2013, the World Bank in its Global Financial Development Report, noted the important role that state-owned banks played historically in the development of certain sectors of society. Often these advantages would include long term credit, infrastructure and financing small to medium enterprises. During the global financial crisis in particular, specific countries used their state-owned banks to support private commercial banks. These countries included Brazil, Russia, India, China and Mexico.
Dare we add that a state-owned commercial bank will therefore only be able to turn down clients under very strict conditions and not pursue a biased approach to some individuals or families as we have seen in the last few years.
Another proposal, mooted a number of times but ignored by Godongwana, is the establishment of a state infrastructure company. The Presidential Infrastructure Coordinating Commission cites nearly a trillion Rands of infrastructure investment over the next three years in South Africa.
The economic transformation discussion document of the ANC itself speaks to the large investments into infrastructure in order to stimulate the economy and to create jobs.
Given the major infrastructure budgets of various departments one could understand the need to prevent collusion, as we saw in the construction industry, and the state taking on the responsibility of building infrastructure itself.
The largest benefactor from a state infrastructure company will be, no doubt, the department of human settlements. For only the next three years, it is estimated that that department will spend over a half a trillion Rands on building human settlements; not only houses but roads and other infrastructure to create integrated communities.
The department of basic education, for example, is currently sitting with an infrastructure backlog of R2 billion, which means that schools are not being built. The department of police currently spends an estimated R734 million on building leases; they need their own buildings.
This department joined the other top four departments in underspending, in the 2015/2016 financial year: Cooperative Governance and Traditional Affairs, Social Development and Basic Education. Four of the top priority areas of government, given our challenges with local government.
ANC national conferences at Polokwane and Mangaung recognised the need to embark on a restructuring of the economy. For the last decade, we have heard of debates on the second phase of transition, nationalisation and radical economic transformation. Already ordinary people have labelled this as mere rhetoric as things continue to remain unchanged.
The Constitution has been labelled irrelevant and out of touch with the majority of South Africans. Sentiments such as these will gain momentum and thus our democracy is under threat unless people like Enoch Godongwana realise that the ANC must bring about real economic change.
Oliphant is a senior public servant in the North West. He writes in his personal capacity.