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28 September 2020 | Story Andre Damons | Photo Pexels
Dr Trevor Manuel, Chairperson: Old Mutual Limited and former minister of finance (top left), Ms Ann Bernstein, Executive Director: Centre for Development and Enterprise (CDE) (top right), and Mr Mondli Makhanya, Editor-in-Chief: City Press (bottom left), were the panellists at the University of the Free State’s (UFS) second Thought-Leader Webinar for 2020, which focused on the economy. Dr Max du Preez, Editor: Vrye Weekblad (bottom right), was the facilitator.

The state is broken, and the country cannot move forward unless the state is fixed and bold, tough decisions are made.

This is the opinion of panellists who took part in the University of the Free State’s (UFS) second Thought-Leader Webinar on Wednesday (23 September), which focused on the economy. This webinar is part of a series with the theme ‘Post-COVID-19, Post-Crisis.’  Dr Trevor Manuel, Chairperson: Old Mutual Limited and former minister of finance, Ms Ann Bernstein, Executive Director: Centre for Development and Enterprise (CDE), and Mr Mondli Makhanya, Editor-in-Chief: City Press, were the panellists. Dr Max du Preez, Editor: Vrye Weekblad, was the facilitator.

Country needs reform

Both Bernstein and Makhanya said that the state is broken, with Bernstein saying that the state is corrupt, and government decision-making bandwidth is much weaker than it used to be.

“The country is in a very serious situation and cannot do more of the same. We have to reflect honestly on what got us into this terrible situation, and then COVID exacerbated all our problems. What got us into it and what we have done previously has to change.”

“The country needs reform and it is my view that we will not move forward unless government’s credibility as a reformer is establish, and two and a half years of promises and very little action of any significance has undermined that credibility. I think you have to start from that,” says Bernstein.

According to her, bold choices must be made if we are to save what growth we have, if we are to expand growth, to expand more labour intensively. 

“South Africa has all the potential to be a great African economy, with all sorts of strengths that we could build on. But we keep disappointing.”

Building a capable state

Makhanya said going forward, a good starting point is to fix and build a capable state. “The fundamental thing of the NDP (National Development Plan) – a plan that can take us forward – was the part about a capable state.” 
“The state is very broken, and there is no way we can move forward while the state is as broken as it is now. This is what we saw during lockdown, when it was so easy for certain elements to steal from very essential funds that were meant to save lives. It was a classic example of a broken state.”

Another thing we absolutely need to do, is to have one message and one conversation.  

“Tough decisions should be taken. It was frustrating again to find us as a country talking about where to find R10,5 billion to fund our ailing airline. Why is this a priority? We know what our priorities are. We know Eskom is a priority, we know food security is a priority, unemployment is a priority. Why is it necessary for us as a country to have this hectic debate about having a national airline?” 

“Decisions need to be taken around the health of the fiscus, decisions around the public wage bill, around issues of freeing up enterprise, and about reforms. The decisions will take a long time to make and some of them will be unpopular, but they need to be taken,” says Makhanya.

According to him, President Cyril Ramaphosa needs to take these decisions. He also needs to tell himself that he would be happy to serve one term, and that he does not need friends to vote him back as leader of the ANC and as President of the country in 2024. President Ramaphosa needs to do things now, knowing that he will leave a legacy of having fixed a country, and importantly, having fixed the economy.

Announcement of hard lockdown saw the economy hurtling down a cliff

Dr Manuel said the hard lockdown announced at the end of March saw the economy hurtling down a cliff. This happened after three successive quarters of contraction. “We find ourselves at the base of this ravine, having tumbled down. How do we extricate the South African economy from where we are given the geography of where we are?”

According to him, the country has fewer options than we would like to imagine. 

“I think the 51% contraction in the second quarter must introduce a sense of urgency and focus the mind. We are not alone. But we need to be rigorously honest about where we are. And we need to also ask ourselves tough questions of whether we have the wherewithal to reconstruct the economy,” says Dr Manuel. 

According to him, the $3,4 billion borrowed from the IMF is unlikely to be sufficient, and there is a growing consensus that the full-on standby facility from the IMF will probably be needed.  

He says while the RFID has no obvious conditions, it is important to pay attention to the fine print. “In the letter of intent, which was jointly signed by the Governor of the Reserve Bank and the Minister of Finance, we committed to take action to revoke the upward trajectory of the debt-to-GDP ratio, and also a commitment to remove the structural impediments to growth. So, it is quite important to understand what we committed to and against what we will be measured.” 
“The IMF, in accepting those commitments, also warned about the urgency and the sequencing of the series of policy measures to prevent – in their words – the risk of social unrest. They also raised a series of red flags that are important in the context. The first is the growth of the public sector wage bill, something that is in the public domain and about which NEHAWU is threatening to strike. The second issue is the scale of transfers to state-owned enterprises. Thirdly, the risk of the curtailment of infrastructures.”

There has also been a flurry of policy writing and discussions. The National Treasury, Business for South Africa, and the ANC have written their own papers on reconstruction, growth, and building an inclusive economy.  According to Dr Manuel, however, the question is how to get things done. 

“The concern I have about these papers is that there is inadequate attention to public finance, which sets a frame for all economic development that needs to take place. And it is basically an equation – what you have to spend is the sum of what to tax and what you can borrow.”

What the country needs right now is clarity on the trade-offs, and not even the social partners paper deals with trade-off clearly enough. If you put money into an airline, it has to come from somewhere else. Your ability to govern and exercise choices is therefore severely limited.

News Archive

Media: Sunday Times
2006-05-20

Sunday Times, 4 June 2006

True leadership may mean admitting disunity
 

In this edited extract from the inaugural King Moshoeshoe Memorial Lecture at the University of the Free State, Professor Njabulo S Ndebele explores the leadership challenges facing South Africa

RECENT events have created a sense that we are undergoing a serious crisis of leadership in our new democracy. An increasing number of highly intelligent, sensitive and committed South Africans, across class, racial and cultural spectrums, confess to feeling uncertain and vulnerable as never before since 1994.

When indomitable optimists confess to having a sense of things unhinging, the misery of anxiety spreads. We have the sense that events are spiralling out of control and that no one among the leadership of the country seems to have a definitive handle on things.

There can be nothing more debilitating than a generalised and undefined sense of anxiety in the body politic. It breeds conspiracies and fear.

There is an impression that a very complex society has developed, in the last few years, a rather simple, centralised governance mechanism in the hope that delivery can be better and more quickly driven. The complexity of governance then gets located within a single structure of authority rather than in the devolved structures envisaged in the Constitution, which should interact with one another continuously, and in response to their specific settings, to achieve defined goals. Collapse in a single structure of authority, because there is no robust backup, can be catastrophic.

The autonomy of devolved structures presents itself as an impediment only when visionary cohesion collapses. Where such cohesion is strong, the impediment is only illusory, particularly when it encourages healthy competition, for example, among the provinces, or where a province develops a character that is not necessarily autonomous politically but rather distinctive and a special source of regional pride. Such competition brings vibrancy to the country. It does not necessarily challenge the centre.

Devolved autonomy is vital in the interests of sustainable governance. The failure of various structures to actualise their constitutionally defined roles should not be attributed to the failure of the prescribed governance mechanism. It is too early to say that what we have has not worked. The only viable corrective will be in our ability to be robust in identifying the problems and dealing with them concertedly.

We have never had social cohesion in South Africa — certainly not since the Natives’ Land Act of 1913. What we definitely have had over the decades is a mobilising vision. Could it be that the mobilising vision, mistaken for social cohesion, is cracking under the weight of the reality and extent of social reconstruction, and that the legitimate framework for debating these problems is collapsing? If that is so, are we witnessing a cumulative failure of leadership?

I am making a descriptive rather than an evaluative inquiry. I do not believe that there is any single entity to be blamed. It is simply that we may be a country in search of another line of approach. What will it be?

I would like to suggest two avenues of approach — an inclusive model and a counter-intuitive model of leadership.

In an inclusive approach, leadership is exercised not only by those who have been put in some position of power to steer an organisation or institution. Leadership is what all of us do when we express, sincerely, our deepest feelings and thoughts; when we do our work, whatever it is, with passion and integrity.

Counter-intuitive leadership lies in the ability of leaders to read a problematic situation, assess probable outcomes and then recognise that those outcomes will only compound the problem. Genuine leadership, in this sense, requires going against probability in seeking unexpected outcomes. That’s what happened when we avoided a civil war and ended up with an “unexpected” democracy.

Right now, we may very well hear desperate calls for unity, when the counter-intuitive imperative would be to acknowledge disunity. A declaration of unity where it manifestly does not appear to exist will fail to reassure.

Many within the “broad alliance” might have the view that the mobilising vision of old may have transformed into a strategy of executive steering with a disposition towards an expectation of compliance. No matter how compelling the reasons for that tendency, it may be seen as part of a cumulative process in which popular notions of democratic governance are apparently undermined and devalued; and where public uncertainty in the midst of seeming crisis induces fear which could freeze public thinking at a time when more voices ought to be heard.

Could it be that part of the problem is that we are unable to deal with the notion of opposition? We are horrified that any of us could be seen to have become “the opposition”. The word has been demonised. In reality, it is time we began to anticipate the arrival of a moment when there is no longer a single, overwhelmingly dominant political force as is currently the case. Such is the course of history. The measure of the maturity of the current political environment will be in how it can create conditions that anticipate that moment rather than seek to prevent it. We see here once more the essential creativity of the counter-intuitive imperative.

This is the formidable challenge of a popular post-apartheid political movement. Can it conceptually anticipate a future when it is no longer overwhelmingly in control, in the form in which it is currently, and resist, counter-intuitively, the temptation to prevent such an eventuality? Successfully resisting such an option would enable its current vision and its ultimate legacy to our country to manifest in different articulations, which then contend for social influence. In this way, the vision never really dies; it simply evolves into higher, more complex forms of itself. Consider the metaphor of flying ants replicating the ant community by establishing new ones.

We may certainly experience the meaning of comradeship differently, where we will now have “comrades on the other side”.

Any political movement that imagines itself as a perpetual entity should look at the compelling evidence of history. Few movements have survived those defining moments when they should have been more elastic, and that because they were not, did not live to see the next day.

I believe we may have reached a moment not fundamentally different from the sobering, yet uplifting and vision-making, nation-building realities that led to Kempton Park in the early ’90s. The difference between then and now is that the black majority is not facing white compatriots across the negotiating table. Rather, it is facing itself: perhaps really for the first time since 1994. Could we apply to ourselves the same degree of inventiveness and rigorous negotiation we displayed leading up to the adoption or our Constitution?

This is not a time for repeating old platitudes. It is the time, once more, for vision.

In the total scheme of things, the outcome could be as disastrous as it could be formative and uplifting, setting in place the conditions for a true renaissance that could be sustained for generations to come.

Ndebele is Vice-Chancellor of the University of Cape Town and author of the novel The Cry of Winnie Mandela

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