đź”’ Alec Hogg: SA doubles down on Development State

Last night’s cabinet reshuffle sent a clear message to South Africans: president Cyril Ramaphosa has doubled down on his Developmental State ideology.

For rational minds, this means last month’s rock-bottom was indeed one of sandstone rather than granite – a new soft base rather than one the country will bounce off. It is now clear the ANC leopard will not change its spots. Until this government is replaced at the ballot box, the country will continue to plumb ever lower depths.

In the immediate aftermath of July’s anarchy, many were hopeful that Pretoria would finally realise the ANC’s destructive economic policies had fuelled to the chaos. They believed an out-of-touch so continuously “shocked” Ramaphosa would emerge from the disaster with a fresh appreciation his party’s outdated and failed ideology needed to be replaced with pragmatism.

Instead, Ramaphosa accepted the often-tendered resignation of the last rational economic thinker in the economic cluster and last night replaced him with a buddy from their trade union years. With Tito Mboweni now gone, the SA economy’s key departments – Finance; Economic Development; Mining & Energy; State Enterprises; and of course the Presidency  – are 100% staffed by former trade unionists and/or communists, all staunch devotees of the Developmental State ideal.

Immediately after last night’s announcement an already weakened Rand dropped 20c from its pre-cabinet reshuffle level.

The currency is being supported by the commodity price boom – an artificial stimulant which, for the moment, is papering over the desperate position of an economy where misguided economic policies will ensure unemployment keeps rising, fixed investment stays on strike and the financial burden on a small and shrinking tax base keeps growing.

As opposition politicians Herman Mashaba, Helen Zille and more recently John Steenhuisen keep telling us – the only way out of SA’s downward spiral is by replacing the ANC at the ballot box.

For rational minds, the fragile promise in Ramaphoria is over. The president has very publicly renewed his political vows. He remains wedded to a position which puts party above country; cadres above competence; power above prosperity.

The YouTube video of Niemoller’s Open Letter to Ramaphosa has now been watched by 170k people. But not by the president. Obviously.

Ramaphosa and his allies dream of replicating the China Model. That’s a scary thought for two big reasons.

The first is brilliantly articulated in this WSJ piece. The second was shared by the new IRR head John Endres in our interview this week – in a Constitutional Democracy, the application of Beijing’s approach to economic policy ushers in the worst of all worlds. There are none so blind as those who will not see.


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