Ramatrends: 2018, a year of receding high hopes
Ramaphoria has been somewhat muted as the year now draws to an end
The year is drawing to a close and since it’s the era of listicles, here is my five-point list of the outstanding trends of the year in SA:
Ramaphoria: economic disappointment. At the start of 2018, economists, the Reserve Bank and the IMF were all predicting economic growth of above 2%. But in fact, growth is likely to come in below 1%, and SA surprisingly slipped into (and out of) recession during the year. Expectations were partly driven by the idea that SA has been lagging emerging market economies in general, hence SA is bound to “catch up”. They were also driven by Ramaphoria, the idea that SA was returning to a political framework that loosely coincides with modernity. Not for the first time, SA’s economists and political analysts laboured under the false notion that a reformed ANC under new leadership will naturally create a successful economy.
The result of the continuing economic decline is that public and private finances are under strain and SA’s social problems are getting worse. SA’s overall poverty rate was dramatically declining until 2011, but since then it’s edged upwards. Investment rates have just been decimated and investment by SA companies outside the country has just exploded.
Yet some positive signs remain. Confidence in the ANC as a sound manager of the economy all but evaporated during the Zuma years, but aided by Cyril Ramaphosa’s well-conceived investment conference, it is slowly beginning to return. This year was supposed to be the year the economy turned around; there is still a chance that SA can at least rebound to performing 50% worse than most emerging market countries.
Ramapython: SA’s gradual institutional rebuilding. The popular news events of 2018 focused to a large degree on the gradual rebuilding of SA’s key institutions, and a kind of replay of the Truth and Reconciliation Commission as the extent that SA’s key institutions were hollowed out by putting halfwits and duces in charges of key institutions. The surprise, in a way, is not the new approach but how long it has taken to implement. Almost a year after it became clear that the SA Revenue Services (Sars) was in the maw, of the illicit tobacco industry for example, it has only recently formally managed to oust former commissioner Tom Moyane. Yet Ramaphosa has been content to proceed with the reforms in a slow and steady way, gradually suffocating his opponents. But at least SA now, also after a year, has a new head of the national prosecuting authority in Shamila Batohi.
Ramamargarine: state-owned enterprises still on the slippery slope. As noted above, the process of renewal at public institutions continues apace, and one of the grand highlights of 2018 was new boards and/or CEOs at Eskom, Transnet, Denel, SA Airways and so on, making for the hope of a return to a state of normal panic. It’s a measure of the new standards that apply to SA that an ordinary crisis is now considered a big relief.
The problem is Eskom, which is so large and whose problems are so entrenched that a mere board change is really not going to cut it. Hence the debilitating prospect of power outages has returned. Just to measure the scale of the disaster, R21bn in irregular expenditure announced at its recent results is two-thirds of the value of Telkom. The scale of the Eskom disaster puts SA’s public finances at risk and constitutes SA’s most pressing single issue. Yet Ramaphosa, typically slippery when it comes to difficult issues, seems happy to stay with the existing structure of Eskom and neither he nor the ANC seem particularly inclined to self-critically examine what went wrong.
Ramabuffalo: the land issue looms. The land has been the standout political issue of 2018, fairly obviously. The dynamic is beyond dangerous since it involves the EFF and the ANC engaging in a pissing match about who is the most determined and most righteous about land reform. In the process, the chances that political promises will be made that cannot be kept will escalate exponentially. Parliament has formally suggested that the constitution be changed to “clarify” that land can be expropriated without compensation for land reform purposes. Ramaphosa has charged this measure in a transparent attempt to ensure the EFF does not have a distinguishable electoral platform with which to beat the ANC over the head in the elections in 2019. But crucially, the dynamics of how the measure will work remain guesswork.
Ramadan: political realignment. Ramadan is the Islamic month of fasting and contemplation, intended to bring believers closer to Allah (God). Likewise, political parties are contemplating being brought closer to voters in the 2019 elections, and the political jockeying typical of these periods has already begun. The ANC has apparently strengthened in the polls, but to me it’s interesting not how much, but how little, progress the party has made. In the latest Institute of Race Relations poll, the ANC was projected to emerge with 59% of the vote, the DA with 22% and the EFF with 10%, based on the most likely voter turnout of 69%.
The headlines of the story suggested this was a big increase for the ANC and calamitous decline for the EFF and the DA, based mainly on the outcome of the previous poll. This may be true, but on a longer-term outlook that result would put the ANC below its 2014 electoral victory, the DA unchanged, and the EFF up substantially.
The big challenge now lies with the opposition parties, which will have to find new ways to connect with voters.
• Cohen is Business Day senior editor