SA is reaping bitter fruits of years of mismanagement of economy

A protester swirls around a burning tyre during one of service delivery protests. The writer says political parties will need to convince voters next year on how they will turn things around.
A protester swirls around a burning tyre during one of service delivery protests. The writer says political parties will need to convince voters next year on how they will turn things around.
Image: Thulani Mbele

The effects of bad governance are biting South Africa hard. Much of the economic stagnation and contraction of the past decade can be accounted for primarily by wastage, mismanagement of government departments and state-owned enterprises, and the entrenching of patronage and corruption in the public service.

All of this has culminated in the technical recession announced this week by Statistics SA. Not only is the economy not growing, it is in decline.

Former president Jacob Zuma's years as head of government have been costly in their production of a near complete breakdown of governance across all levels of the state.

Leadership really does matter. It is for this reason that the ANC rushed to change the face of the presidency following its elective conference in Nasrec, Johannesburg, in December.

The subsequent inauguration of Cyril Ramaphosa into the highest office quickly resulted in optimism now popularly known as Ramaphoria, premised on the notion of a new dawn.

Although Ramaphosa has been swift to take measures that sought to clean out the rot that has taken root in critical state departments and entities, including at the SA Revenue Service, the National Treasury, and Eskom among others, and appointed a commission of inquiry into state capture, it will take far longer than a few months to not only uncover the extent of the damage, but to undo the mess as well.

Riding on the wave of enthusiasm following the resignation of Zuma as president of the republic, Ramaphosa made some lofty promises about growing the economy and attracting hundreds of billions of rand in investments.

Outside of the challenge of bad governance presided the real problem of inappropriate and incoherent policies that have not addressed and are failing to address the country's deep-rooted socioeconomic woes.

The bad governance of the last decade has only compounded the structural impediments to realising a more productive, inclusive and vibrant economy.

The days of higher growth under former president Thabo Mbeki did not necessarily mean SA did not face real structural challenges. Even then, the unemployment rate was high, income inequality was on the increase and, although poverty was receding, the number of people living under the poverty line was concerning.

Although SA has good competition law and the Competition Commission that looks into the overall competitiveness of industry, this has not begun to alter the oligopolistic nature of the economy. There is a high concentration of markets and the barriers to entry are almost insurmountable for new and smaller entrants.

This is the case across the majority of sectors and is a recipe for exclusion, a contradiction in a nation that espouses inclusion and equality.

Turning the situation around requires a combination of clean, efficient governance that is transparent, accountable and adheres to the rule of law, as well as the implementation of coherent policies that address the structural impediments to the economy.

The trouble in this country's highly contested multiparty politics is a lack of perspective and the tendency of political parties across the spectrum amplifying the weaknesses of governance at the expense of addressing fundamental problems with the socioeconomic structure of society.

The ANC's attempts at tackling structural questions such as land ownership and inclusiveness in the mining sector have been so haphazard they are only causing consternation about the governing party's competence.

There is no doubt that citizens are getting poorer as the cost of living is rising.

It is for this reason next year's vote is one of the most crucial since 1994. The ANC and opposition alike need to present the nation with concrete plans on how they will turn things around.

Stats SA announced on Tuesday, September 4 2018, that SA has plunged into a recession with a surprise 0.7% contraction in the second quarter of the year. What does this mean for SA and its people?

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