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Sunil Shah is a thoughtful South African. An economist who was part of the brains trust at Coronation, this top rated money manager branched into writing and is now involved in bringing education to the under-privileged, Shah has never been afraid of expressing his perspective. His last Open Letter was a plea to the ANC Government to stop destroying English-speaking schools. It was extremely popular among the Biznews community. He’s followed it up with an even more pointed Open Letter – this time to President Jacob Zuma. A courageous approach, saying what many others are thinking but too afraid to express in public. – Alec Hogg
Sunil Shah’s Open Letter to Jacob Zuma and the ANC
Dear Honourable President,
I wish to bring certain things to your attention, in case you haven’t noticed.
South Africa is on the cusp of a vertiginous decline. You might have missed the recent statistics, given your lack of attention to detail, but as an economist, let me outline the economic state of the nation, in the first quarter of 2015 (courtesy of Nedbank Insights):
* GDP Real GDP expanded by an anaemic 1.3% q/q on a seasonally adjusted annualised basis, down from a base-inflated 4.1% rate in fourth quarter of last year.
* Manufacturing: In the first quarter, the main drag came from shrinking value added by manufacturing (down 2.4% q/q). Manufacturing, which accounted for 13.3% of GDP in 2014, was hurt by load shedding, low international commodity prices as well as moderate global and domestic demand.
* Construction: Worryingly, the recovery in construction activity stalled, growing by anaemic 0.8% from 3.5% in the fourth quarter. This suggests weak levels of fixed investment activity. Load shedding and the uncertain policy environment probably undermined capital expenditure by the private sector.
* Jobs: Labour disputes repeatedly disrupted construction activity at the major power projects, while the implementation of infrastructure projects elsewhere in the public sector remained slow. Given this sluggish environment, it is little wonder that the unemployment rate rose to 26.4% in the first quarter from 24.3% at the end of 2014.
* Exports/imports: The trade balance deteriorated further in April to a deficit of R2.51bn from a downwardly revised deficit of R9m in March (previously a surplus of R482.5m).”
First a word of advice: As a trained economist, I wish to highlight something VERY ominous. In every single instance in our history, when the rand has depreciated, the manufacturing sector has reacted by capitalising on the increased competitiveness of cheaper SA exports (and exporting more, thereby hiring more people). Sir, this will be the first instance where manufacturing has not responded. This harbours ominous signs for the future. Either due to the lack of confidence, or the increasing burden of employment your government has imposed (are you aware of the new requirements you have imposed on business) this will be the FIRST instance in history where manufacturing will not have taken up the slack of a devalued rand.
If I were you, I would be very worried what my government is doing to the underlying fabric of the country.
Second word of advice: you might not have the capacity to understand the economic plight of the people that these statistics embody, but I know you understand people; your compatriots are losing jobs. And there are no other jobs to replace the lost ones. Thus people and families are starving. Honourable President, I know you understand that. And I know you care.
I’m writing this because I want you to think about the legacy you are about to leave in your wake. The way things are going, in my opinion South Africa is about to suffer the worst destruction of an industrialised nation known to mankind. The jewel of Africa, the cradle of minerals and hope on the continent, is about to slide into anarchy, lawlessness, unbridled crime and violence that no one could possibly imagine.
Why? Because of the plight of your people. There is nothing to live for, nothing to look forward to, no place to pin one’s hopes on. Not one new job has been created (many have been lost); we are gripped in darkness without electricity, with utility bills going up faster than your matrimonial infidelities; companies are shedding labour, replacing people with machines or worse, leaving. Schools are disintegrating, roads are crumbling, hospitals don’t have basic supplies – just examine your figures on virtually every deliverable the government is required to make…Honourable President, we do not have a single occasion to feel proud that we are South African under your regime (need I remind you of the recent allegations around the 2010 World Cup); and all this while the ANC elite slurp shamelessly from the gravy trough.
Honourable President, I am willing to overlook Nkandla. I will accept that your swimming pool could be misconstrued as a firebreak -maybe you didn’t know all the detail, let’s leave it at that. But enough is enough.
Don’t mess with the constitution and the judicial system. Where is your integrity? Your self-esteem. You need to stop the blatant abuse of authority for your personal and the ANC’s gain. The public institutions you preside over (Judiciary, NPA, police, Scorpions…) were established to govern a complex industrial nation, and you need them. You need to hold your ministers accountable for the jobs they were appointed for.
Logic and accountability are not a White Man’s invention. (I happen to be an Indian born in Africa, the author of a book called ‘White Man’s Numbers’ , in which you will find a very endearing Zulu character called Jacob). They are a natural state of the world, as inevitable a law as water putting out a fire. When an ANC minister is blamed for incompetence (by direct logic and facts), it is not a white man’s conspiracy, but an area where you have to intervene, by pouring water over the fire. If that minister was taking bribes or being negligent, it is your responsibility to replace him. You have to put out the fire, and sow the seeds for future harvests. For your people. Honourable President, forgive me for stating the obvious, but it appears you have forgotten.
I don’t know how to alert you to the crisis are creating, other than to write this letter. Do you know there is a Department called the Red Tape Reduction Unit, whose sole objective is to identify and rectify dysfunctionalities within your government? Do you know that the Department of Home Affairs (DHA) ignores direct missives from the Red Tape Reduction Unit? Do you know the DHA is single-handedly killing the single industry – tourism – that might address the chronic unemployment in our country? And it’s doing this without any reference to global trends and practices! How can this be possible? How can it be possible if you and your ANC really care? Do you understand the sophistication of the SA economy and the accountability it demands as a non-negotiable prerequisite?
I have no idea what else is happening in your governmental departments, but I’m sure you do.
Honourable President, you have a choice. And that choice is now. Do you and the ANC want to go down in the annals of history as the government that presided over the steepest, ugliest decline in Africa? Do you want to preside over the regression of a proud industrialised manufacturing economy into a cesspool of nepotism, corruption, unemployment, despair and darkness? You (meaning you and your ANC ministers) could probably still survive the chaos and carry on slurping from the (disintegrating) gravy train. Yes you might be fine. But is this how you want to be remembered?
The ensuing chaos would be a significant event, worthy of history books way after your time. But is this how Jacob Zuma and the ANC want to leave their mark?
The choice is yours. We need you to act. Please act now, for the future of your people, before it’s too late.
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