29 November 2021 | Story Dr Nitha Ramnath

Panellists at the University of the Free State (UFS) Thought-Leader webinar, titled: Looking through a crystal ball – predictions for 2022, felt that the ineffectiveness, lack of skills, and incompetence of the government forced communities to change their attitude and start doing things for themselves. Eskom is considered a major obstacle to growth and those responsible for corruption will not be held to account, according to the panel.

The panel comprised Dr Pali Lehohla, Consultant: Oxford Poverty and Human Development Initiative and former Statistician General, South Africa; Dr Ina Gouws, Senior Lecturer: Governance and Political Transformation, UFS; Ms Amanda Kotze-Nhlapo, Chief Convention Bureau Officer, South African Tourism; and Mr Dawie Roodt, Director and Chief Economist: Efficient Group.

This was the sixth webinar in the series, which is part of the Free State Literature Festival’s online initiative, VrySpraak-digitaal

This year is better than next year

“In South Africa, there is the absence of policy systems with no leadership in the country at all levels,” said Dr Lehohla. The Treasury promises nothing for South Africa in terms of the future. Although South Africa can still reach 5,3% growth, which is reasonable, the elephant in the room is the macro reforms. The apartheid regime had a master plan in terms of how things were designed and developed – the current administration does not have a master plan, nor does it have good leadership, according to Dr Lehohla. If we do not have sound technical skills and the support of science, we will not move forward. We need competent people to drive the state, and the current government does not have these skills. This year is better than next year, according to Dr Lehohla.

People are ready to come back

The tourism sector is seeing signs of recovery. “South Africa is working on recovery – first on a domestic level, national, and then international,” said Kotze-Nhlapo. South Africa has the business events and conventions sector, and there is the need to get people to meet. South African Tourism is focusing on and targeting specific markets to build confidence in South Africa. “Twenty-four markets are being looked at as potential tourism gains for South Africa,” said Kotze-Nhlapo. The meeting industry, which looks good, will be prioritised and will trump leisure travel, according to Kotze-Nhlapo. She said tourism could be a catalyst to improve the broader economy of South Africa. Specific projects, such as Africa’s Travel Indaba, are looking at helping with the recovery in order to bring buyers back, as well as participation in international travel expos – people are ready to travel again, to meet, and to come back, according to Kotze-Nhlapo.

Listen to recording below: 

An incompetent government cannot implement a bad idea

The three important aspects that ensure basic economic growth are private property rights and private property rights protection, free trade, and sound money. It is difficult to trade if there is no property rights protection and money, according to Dawie Roodt.  “In South Africa, private property rights protection is under threat, free trade is being limited, and the reality is that South Africa has lost 99% of the value of its currency,” said Roodt. South Africa is experiencing significant supply chain disruptions, with high global inflation. In 1994, South Africa generated more electricity on a per capita basis in relation to the rest of the world, and today we generate less than 65% – without electricity the economy cannot grow. As an emerging economy, our fiscal debt levels as a percentage of the GDP are extremely high and unsustainable, according to Roodt. 

While we have a corrupt government, the lack of effectiveness causes more damage to the economy. The ANC was the biggest loser in the local government elections, not in numbers, but in confidence. Coalitions and instability are in the pipeline – the ANC will lose its absolute majority in the 2024 elections, according to Roodt. 

In South Africa, twelve million people are without jobs and 14 million have jobs. We have two million civil servants plus 18 million grant recipients – in total, 20 million people receive income from the state every month, plus grant recipients of ten million odd. In SA, 33 million people receive an income from the state every month. Only 12 million people in the private productive sector are paying for 30 million people who are recipients from the state in one form or the other.
Roodt projects that in terms of the budget, we will see less money being spent on the 30 million people over the next couple of years, because money will run out. “If less money is spent, we will see an increase in social and political tension, because money will be taken away from 30 million people,” said Roodt. 

“We are seeing an increase in privatisation, because the government is one of destruction and collapse,” said Roodt. The private sector is taking over – the police is privatised, with an increase in private security that is three times more than the police; electricity is being privatised, with the allowance of 100 megawatt for the private sector; and a third of the railways can have the private sector as partners, according to Roodt.  “The good thing about an incompetent government is that it cannot implement a bad idea, and therefore the NHI will not happen; we will have to cut back on grants as this is not affordable,” said Roodt.

Expropriation, import duties, and minimum wage undermines growth, coupled with Eskom, which is a major obstacle to economic growth. However, within this, an incompetent government has created opportunities in technology, education, electricity, and many other areas, according to Roodt.

 A darkness hovers over our nation

We find ourselves on the other side of local government elections, where the results at local level have not been seen before. The economic hubs of our country are now being governed by minority opposition parties. “A darkness is hovering over South Africa and it is no longer possible to conceal it with empty promises and excuses from those in charge of creating better ways,” said Dr Gouws. We need service delivery to attract investment and to stop relying on government grants. The current national administration has no interest in creating an environment for entrepreneurship, and people are tired; they are expected to care about everything without seeing changes in their daily lives, according to Dr Gouws. The run-up to the recent elections illustrates that communities have started to change their attitude; in a few pockets, communities have shown that differences are an asset in solving their problems, where they have to rely on each other as opposed to the politicians. “What made the difference was the necessity and realisation that people cannot rely on government, but only on themselves as a community to bring together what they can on the foundation of ethical leadership and integrity,” said Dr Gouws. 

The insistence on integrity in the way that people live their lives, and in their communities, really matters.
“Looking to the future, the new communal solidarity and local focus on fit-for-purpose solutions may be the only hope to prevent a complete collapse while national government sorts itself out,” said Dr Gouws. People are tired of having to bounce back and finding ways to cope with situations they are presented with or find themselves in. People want to be able to predict a problem, mitigate a crisis, or prevent the impact altogether, according to Dr Gouws.

Complete distrust exists between government and communities, and there is the need for government to approach communities and partner with them. Communities should be given the opportunity to show what has been done in communities, what has been achieved, and where they are going; there is insistence on this now. “The national government will remain as paralysed as it was, and the president will not make changes, especially to hold the corrupt to account.  Relying entirely on national policies and unexecuted plans should be avoided by local communities desperate for better lives,” said Dr Gouws. The expectation of investment to grow the economy and create the growth that people will feel on ground level will not happen until the next leadership conference, according to Dr Gouws.

Listen to a recording of the webinar below:

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