Government can’t shuffle out of its mess

Jacques Moolman, president of the Cape Chamber of Commerce and Industry

The cabinet reshuffle is a further stark illustration of government’s inability to deal with our current economic crisis.

A few cosmetic changes at the top will do nothing to address the stark reality of a shrinking economy, massive unemployment, and an energy crisis now etched into the fabric of daily life.

The best we can say about the reshuffle is that it is at least honest – government is indeed shuffling, rather than taking decisive action needed to avert further disaster.

No amount of shuffling will obscure the fact that South Africa has one of the highest unemployment rates in the world while being shackled by policies and leadership that offer little hope of redemption.

The new cabinet appointments would appear to confirm that the president is more concerned with shoring up political support than making the bold moves required to effect change – or even to instill confidence in the taxpaying public.

Despite a worrying economic contraction in the fourth quarter of last year, government continues to stifle economic growth with business-unfriendly decisions. The cost of indecisive leadership continues to mount; this week the long-term failure to lessen the impact of load shedding prompted a credit rating downgrade from “positive” to “stable” from S&P Global, an American credit-rating agency.

In their assessment, the rating agency said: “Reforms to address infrastructure shortfalls and to improve governance and performance at state-owned enterprises (SOEs) are slow, weighing on growth, while contingent liabilities from SOEs pose continued downside risks to South Africa’s fiscal and debt position.”

A damning assessment indeed.

Another example of “shuffling” is the new National Land Transport Strategic Framework, a big-picture five-year plan for road and rail. Under current circumstances, with the road and rail network in a shambles, one might expect a radical departure from the last Land Transport Strategic Framework.

Instead, the new iteration is more of the same, thereby illustrating the broader government policy stalemate frustrating the business community.

A common thread to all the shuffling is government’s reluctance to implement urgent pro-business policies.

It is common cause that the current trajectory of propping up defunct state-owned enterprises – such as Transnet and Eskom – is counterproductive and not in the national interest.

What is abundantly clear, now more than ever, is that the disastrous state of energy and transport infrastructure can only be resolved by private sector-led growth. Government cannot reshuffle itself out of the mess it has created.

As a chamber, we reiterate our call on government to implement decisive and meaningful economic reform to help arrest economic decline.