Tito Mboweni sells us paralysis when the economy needs leadership

Finance Minister Tito Mboweni.
Finance Minister Tito Mboweni.
Image: Esa Alexander

So, we are informed that among China's key success paradigm is the sequencing of the word People before the word Republic - that is the People's Republic of China - so that people come first at all times and if you serve in public governance structures, your commitments are to the people of the republic.

We have the Republic of South Africa, with little emphasis on the people.

Using this premise it is not surprising that the National Treasury's economic policy unit found it acceptable to pen a policy paper aimed at ticking their requirement box in lieu of addressing key impediments to the country's growth potential.

From where many of us are situated, we are "dead with diagnostic constructs" and we are fatigued by the intensity of such diagnostic diatribe.

The purported economic strategy paper is nothing but an insult to the majority of citizens.

Where does the paper identify the how of the short- term strategies? Mentioning strengthening network industries is not a short-term objective. However, maintaining network infrastructure is a key priority and can be achieved within 12 months.

Roads, dams, railways, electricity infrastructure and ports have proven to be responsive in the short term and can be massively labour intensive. Our road network needs intensive capital maintenance, let alone rural road infrastructure.

Why? Because infrastructure is a massive enabler.

To rhetorically identify the possible sale of old Eskom power stations is akin to wanting to consume an elephant in one go! What are the economic benefits of the sale of power stations in the short term? None.

The country has unsustainable public debt of more than R3-trillion, meaning that the country is "bankrupt", just like state-owned companies. The country has no financial wherewithal to honour its debt should lenders call in their debt.

At over 60% of GDP, government debt is increasingly diverting economic resources into spending on interest payments. The latter has overtaken education spend as the fastest-growing expenditure item in our budget.

Having an independent transmission company that will purchase generated electricity from all generators, including independent power producers (IPPs), is far-fetched.

First of all, the government - through the National Treasury - has fully guaranteed power generation by IPPs.

At last count, more than R140bn was spent on IPPs' generation. How will you ensure competitive bidding for generation when one block of generators is heavily subsidised? IPPs take no risks at all but are heavily dependent on the government.

The options to sell electricity back to the grid by households and corporates alike, is not a short- term solution but a business- destructive outcome in the long term. The behemoth called Eskom will cease to exist should the sell-back be allowed, because it'll be destructive instead of being well controlled and managed.

Evidently, we do not have a lack of policy initiatives but suffer from a gross deficit in government leadership and policy consistency!

Infrastructure development investment is key and pivotal in revival of any economy, and ours is no exception.

In telecommunications, failure to introduce set-top boxes as part of the digital migration process that would ease the cost of doing business is nothing short of an embarrassment due to lack of leadership.

On transport economics, there is just no will to stimulate the transport infrastructure to unlock transport commerce.

Borrowing from the offering of the Chinese ambassador to SA, Lin Songtian, there are three critical interventions that the government can implement without soliciting parliamentary sittings or new policy persuasions.

The first is to reduce the level of crime and restore investor confidence. With the resources we have in the security cluster, we could strengthen resources and tighten judicial processes - from policing and prosecutions to correctional services.

Secondly, have 12-month achievable policy targets that can be measured and monitored.

This includes completion of rail infrastructure, electricity infrastructure, ports, roads, schools, housing, dams and bridges.

Thirdly, whatever resources we have, efficiently use those resources as they are the only resources we have at our disposal.

Use what you have to the best of your ability. Otherwise the strategy as proposed is only regurgitating what is known already.

We are tired of diagnostic paralysis.

*Mandla Maleka is an economist

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