The Civil Engineering Contractor January 2019 | Page 3
COMMENT
Eamonn Ryan - editor
[email protected]
M
ight South Africa’s own
economic revolution be in
motion already? Might we
be about to emulate the economic
miracles of China and India? We saw
some strange signals towards the
end of 2018: a flood of foreign
and local investment, and even hints
at the previously taboo subject of
privatisation. Yet, this is essentially
the same government that a year ago
unblinkingly oversaw the wholesale
looting of public money.
It is almost dizzying how
many major policy shifts we are
witnessing, but perhaps the most
encouraging was Finance Minister
Tito Mboweni’s maiden Medium-
Term Budget Policy statement in
which he said that the government
had taken a conscious decision
to reconfigure the state-owned
enterprises (SOEs). Ahead of his
statement, he held a press meeting
in which he went out of his way
to describe the example of the
failing Swissair, which the Swiss
government thereafter sold. The
analogy to South African Airways
wasn’t lost on anyone.
And even if it was lost, Mboweni
went on to spell things out: “Our
current challenges with SOEs
require us to demolish the walls
that exist between the private
and public sectors.” Most SOEs
have weak balance sheets, and
Mboweni suggested that proposed
restructuring would include
private equity partners and selling
www.civilsonline.co.za
some of the parastatals. That is an
abrupt U-turn.
South Africa’s investment summit
in October 2018, led by President
Cyril Ramaphosa, could be an
important step forward in reviving
economic growth in South Africa.
Ramaphosa has seemingly firmly
nailed his colours to the mast in
committing his administration
to the market economy, where
obstacles to private investment
would be removed as far as
possible. Ramaphosa, who became
a successful entrepreneur after he
left parliament in the mid-1990s,
has now signalled that he wants to
build trust between government
and business, even white-owned
businesses. This won’t be easy.
There are elements in the ANC that
still reject capitalism and others
who want to continue using the
term ‘white monopoly capitalism’
as a social battering ram.
Ramaphosa’s biggest challenge
is that after the misadventure of
the Zuma years, this country has
entirely lost credibility. To get an
idea of this, try read the comments
section on an article about South
Africa in a conservative online
British newspaper like the Daily
Mail. Ramaphosa and his advisors
will be asking, what can we do
to rebuild our credibility fast?
Unfortunately, that probably
requires getting the election
behind us ahead of schedule.
It may not even require big policy
reforms — significant incremental
shifts would most likely be
sufficient to engender confidence,
and what is an economy about
other than confidence? If one were
to look at the success stories of
China and India, milestones were
Witnessing an amazing
government U-turn
October 2018 may have been a defining
moment in South Africa’s economic
trajectory.
really small policy shifts towards
business-friendly policies, which
straightened out the previous
distortions of communistic social
engineering.
Most of Ramaphosa’s message was
aimed at reassuring business folk
about how safe their investments
and property are; about an
independent judiciary; and the
rule of law. Nonetheless, there
were some inviolable policies: land
reform and transformation would
both continue.
The most telling signal was an
apparently off-the-cuff remark
he made at an after-conference
dinner to scorn the concept of
‘white monopoly capital’: “We
have become accustomed to …
treating our entrepreneurs and
business people [badly] and called
them all sorts of names. We’ve
treated them like enemies and
… [called them] white monopoly
capital — that must end today.”
CEC January 2019 | 1