Ivo Vegter writes an opinion article that criticises South African President Cyril Ramaphosa’s recent State of the Nation Address. Vegter argues that Ramaphosa’s speech was filled with platitudes about hope and resilience that offered no real inspiration for a country plagued by problems, including a failing economy, poor infrastructure, and an electricity crisis. Accusations of Ramaphosa cherry-picking data and promises, and lacking the courage to address the real problems faced by South Africans seems to be the new norm. Vegter also criticises the government’s plans for more social handouts and state-owned enterprises, instead of real solutions. Find the article below.
SONA2023: ‘An extraordinary human disaster’
By Ivo Vegter
Ramaphosa probably gave the best speech he could have, given the circumstances, his ideological straitjacket, and his complete lack of spine. It didn’t inspire hope, though.
Right from the start, 47 minutes after the joint sitting of the House of Representatives and the National Council of Provinces was called to disorder, President Cyril Ramaphosa’s State of the Nation Address (SONA), rang false.
‘We are, at our most essential, a nation defined by hope and resilience.
‘It was hope that sustained our struggle for freedom, and it is hope that swells our sails as we steer our country out of turbulent waters to calmer seas.
‘Even in these trying times, it is hope that sustains us and fuels our determination to overcome even the greatest of difficulties.’
The temerity of the man knows no bounds. Here we are, economy in tatters, and Eskom no nearer to being fixed that it was a year ago, two years ago, or five years ago, when Ramaphosa first took to the SONA lectern (and failed to impress).
Here we are, with water infrastructure failing, rail infrastructure falling apart, port operations in disarray… we all know the litany of horror that is the state of South Africa in 2023.
Supposedly ‘honourable’ members of parliament, despite earning over a million rand a year to occupy their seats, screamed and shouted over each other with a complete lack of decorum, like disrespectful school kids, until they had to be forcibly removed from the building.
And all Rampahosa can feed us are platitudes about ‘hope’ and ‘resilience’.
‘Today our economy is larger than it was before the pandemic,’ he said. ‘Between the third quarters of 2021 and 2022, around one and a half million new jobs were created in our economy.’
That is how you cherry-pick data to omit the fact that more jobs than that were lost in the year before that, and in between, South Africa hit record highs in unemployment – the highest rate in the world, at that – and that neither the unemployment rate, nor the number of employed people – unlike the size of the economy – have recovered to pre-pandemic levels.
That is how you cherry-pick data to avoid the inconvenient truth that South Africa’s GDP per capita (PPP) is still 5% below its 2013 peak.
That is how you ignore the fact that gross fixed capital formation, which rose spectacularly and almost without interruption from below R300 billion per quarter in 1994 to over R800 billion per quarter in 2008, a level it nearly regained in 2013, has since then collapsed to about R660 billion per quarter.
That’s how you neglect to mention that consumers – even the middle classes – cannot keep up with the cost of food, fuel and electricity.
Bread and circuses
At least Banyana Banyana won the African Cup of Nations, and some locals won a Grammy. Proof of our ‘spirit of determination’, he said that is.
Well, that’s the circuses sorted.
For bread, he promised that because everyone is hurting, the government will just throw more money at them. Because they have so much of it.
Poor and hungry? Have some more social handouts.
Can’t afford food? Treasury will step in (one assumes either with subsidies or price controls, both of which are bad ideas).
Struggling to start or run your small business? We have billions for you, although all this largesse will take the form of loans, which in an economic landscape of big losses, depressed demand and rising interest rates will be well-nigh impossible to repay. But whether government financing finally drowns your business or not, one or two SONAs hence we can brag that we’ve ‘helped’ so many thousands of businesses.
‘The licensing of the PostBank will lay the foundation for the creation of a state bank that will provide financial services to SMMEs, youth- and women-owned businesses and underserved communities,’ Ramaphosa announced. ‘[It] can provide a viable and affordable alternative to the commercial banks.’
Oh, dear. Another state-owned enterprise to compete with the private sector. Top tip: if all these underserved communities were credit-worthy, the banks would have served them a long time ago. All a state bank will do is issue oodles of high-risk debt, based on political, not financial, criteria.
And this is the same PostBank that can’t even cope with social grant payments.
‘Through the Just Energy Transition Investment Plan, R1.5 trillion will be invested in our economy over the next five years in new frontiers such as renewable energy, green hydrogen and electric vehicles,’ he promised.
It hasn’t occurred to him that electric cars and green hydrogen require, well, electricity, and we don’t have enough of that to heat our kettles.
Ramaphosa talked about the electricity crisis as if it’s something new. He had the gall to explain to us the consequences of load-shedding, and then he blithely proceeded to repeat promises we’ve been hearing for 15 years.
‘Our country has, for many months, endured a debilitating electricity shortage that has caused immense damage to our economy,’ he said.
I can’t say that’s a lie, because it isn’t. We’ve endured a debilitating electricity shortage for close on 200 months, which is, indeed, ‘many’. I’d have added ‘very’, but, then, I have been accused of being a little prolix in my writing.
‘We are, therefore, focused on those actions that will make a meaningful difference right now,’ he droned. Bullshit, Mr President. You have never been focused on any actions other than those that served you and your party, and as a distant third, the National Democratic Revolution.
‘To fully implement this plan, we need strong central coordination and decisive action,’ the president said. ‘In a time of crisis, we need a single point of command and a single line of march.’
There’s his ideological straitjacket. He cannot conceive of any solution that doesn’t involve more central planning, with more totalitarian powers for his government.
Besides for the state of disaster, on which I and many others have already expressed opinions, he will also appoint a Minister of Electricity inside the Presidency.
That doesn’t improve central coordination. That adds yet another cook to spoil the broth. Electricity and energy policy will now be the province of the Minister of Electricity, the Minister of Public Enterprises, the Minister of Energy and Mineral Resources (who really must go), the Minister of Finance, to some extent the Minister of Environmental Affairs, and, since it now all falls under a national state of disaster, the Minister of Uncooperative Tyranny and Totalitarian Despotism.
Six ministers, and he talks about ‘strong central coordination and decisive action’.
Central planning is what created most of this chaos in the first place. ‘Master plans’ are the reason we pay far more than we should be paying for clothes and motor vehicles. ‘Master plans’ benefit only the crony-capitalists who run inefficient companies in uncompetitive industries. They don’t benefit the people of South Africa.
We don’t need more planning. We need much less of it. Unleash the private sector! Let decentralised companies, driven to success by their desire for profit, solve this and every other crisis we face!
He’s going to forge a ‘social compact’, he said. He said that last year, too. We don’t need a social compact. We don’t need everyone to agree with the government. We need everyone to disagree with the government, and do things differently from the government, who governed us right into darkness and despair.
‘The progress we have seen should give us courage as we look to a better future,’ he said.
Progress? What progress? We’ve just had the worst three months of load-shedding in Eskom’s history. This entire year to date, we’ve had only 11 hours without load-shedding, and that was on a Sunday when everyone was outside, braaing.
All the ANC has to show for at least the last three presidential terms is regress and deterioration. ANC policy before that wasn’t great, killed a lot of people, laid the legal foundations for a state that could easily be captured, and laid the regulatory foundations for economic stagnation, but at least they did roll out some basic services to millions of people who had hitherto been entirely neglected.
They cannot make the same claim about recent history. By almost every measure of quality of life and socio-economic progress, they’ve made things worse.
And now he talks about it as if this is all some unfortunate happenstance that external circumstances foisted upon us, but ‘if we all work together’ and hold hands and ‘stop moaning’, everything will be okay.
A stopped clock
A stopped clock is right twice a day, and Ramaphosa said two good things, by my count.
‘This year, we will take steps to unlock massive value for poor households by expediting the provision of title deeds for subsidised houses,’ he said.
The Free Market Foundation and its liberal allies has been telling him to do that for 30 years. Imagine the empowerment that could have been achieved if tenants of the state in townships and squatter camps could have owned, and traded, and developed, their properties, for the last three decades?
‘Eskom will procure emergency power that can be deployed within six months to close the immediate gap.’
That almost certainly refers to Karpowership’s floating gas-fired power stations, in whose defence I have written before. I can’t think of any other source of power they could conjure up within six months.
On balance, Ramaphosa’s speech was filled with hot air, misdirection, stale promises, a failure to take responsibility and a failure to produce new ideas. It was barren, impotent; an insult to the long-suffering people of South Africa.
To cap it all, he has the temerity to quote Nelson Mandela, who is too dead to stand up and berate the ANC for the dire straits to which it has driven South Africa.
‘“Out of the experience of an extraordinary human disaster that lasted too long, must be born a society of which all humanity will be proud,”’ Ramaphosa quoted.
Come to think of it, that’s another thing he got right. Just like Nelson Mandela fought to overcome ‘an extraordinary human disaster’ created by a previous government, we must now overcome an extraordinary human disaster wrought by this government.
I’m glad Ramaphosa was able to concede that it really is that bad.
Last time, we changed the government. What will we do this time?
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