Time to decide on Tito’s plan — and all those other plans too
Finance minister Tito Mboweni is an unconventional minister in every sense. He said he did not want the job and was serving as a courtesy to President Cyril Ramaphosa and the ANC. Officials at the National Treasury whisper about how he has set up a private office on his farm in Magoebaskloof, Limpopo, from where he runs the country’s finances. Mboweni often takes to Twitter to attack colleagues. Ramaphosa had to intervene when Mboweni and Gauteng premier David Makhura exchanged blows on social media over e-tolls. So it was not surprising when Mboweni dropped an economic policy reform document for public discussion before taking it to the government, his own party, its allies, or Nedlac for discussion first. This move has made his document unpopular with some colleagues, alliance partners Cosatu and the SACP, and even some business leaders (see Telkom Group CEO Sipho Maseko on the opposite page).
But setting emotions and protocol aside, South Africans from all corners must have time to study the proposals in the paper, titled “Economic Transformation, Inclusive Growth and Competitiveness: Towards an economic strategy for SA”. Then, as a country, we can have an honest discussion on whether this is the tonic needed to resuscitate an economy that is in ICU.
It is understandable why the Left is irked by proposals that suggest partial privatisation of power generation, of the ports and some aviation assets. On Eskom, the paper proposes the sale of coal-fired power stations. The sale would include staff contracts, coal contracts and environmental obligations.
Eskom is an albatross and the state cannot borrow more to rescue it without risking a credit downgrade. If the private sector is willing to pay R450bn for Medupi,
Kusile and other coal-powered power stations and run them profitably, is that not a better path than one that leads straight to the International Monetary Fund and the World Bank with their intrusive structural adjustment programmes?
Cosatu calls this “backdoor privatisation of Eskom” and has vowed to fight it. Between limiting the fiscal and economic risk that Eskom poses — albeit with the unintended risk that some workers could lose jobs — and appeasing Cosatu, which is the lesser evil?
The labour federation is also upset by a proposal to exempt small and medium-sized firms from onerous bargaining council/wage regulations and the national minimum wage. It regards this as “a major attack on our collective bargaining system” and the agreements reached at Nedlac. Latest statistics show that we are grappling with a 30% unemployment rate. All countries that have grown their economies and reduced unemployment have done so by supporting and growing their SMME and informal sectors. Small businesses have cited our labour laws as one reason for not taking on more workers. Relaxing these laws would immediately boost the sector and its capacity to create jobs.
But the problem with Mboweni’s document is that it creates policy uncertainty, and investors, whom we badly need, hate policy uncertainty. As the Telkom CEO points out, Mboweni’s document blatantly contradicts the policy on high-demand spectrum that was gazetted by communications & digital technologies minister Stella NdabeniAbrahams in July. “When one department advocates for a policy which has already been withdrawn — sometimes even by another department entirely — it makes it difficult for business leaders to plan and prepare accordingly. Effective inter- and intra-government co-ordination is crucial for policy certainty. Policy certainty is crucial for investment,” Maseko writes.
We couldn’t agree more. Mboweni’s document makes solid proposals to grow the economy, but so does the National Development Plan and other economic policy proposals before it. Which one trumps the other? We and investors want to know.
Relaxing (labour) laws would boost the capacity to create jobs