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With a management team to match the Mandela/Mbeki era, President Ramaphosa, (should he or one of his ilk secure a second term), there’s a real chance of a return to a similar average 4% annual economic growth rate. That’s the take of economic and banking fundi, Pierre Faure, Professor Emeritus at Rhodes University where he’s imparted a lifetime of marketplace learning to hundreds of students. Triggered by the pragmatic reasons given by Constitutional lawyer, Pierre de Vos, for why NDPP Head Shamila Batohi has yet to charge any top politician or State-Capture-linked corporate chief, Faure calls for patience. Not a sitting-on-your-hands’ kind of patience. To save time and money and enable a faster return to economic growth, Faure suggests amnesty for the architects, agents and facilitators of State Capture. With non-negotiable conditions. Such as: Applicants fully disclosing their malfeasance and paying back all ill-gotten gains, plus all salaries earned while doing so. Suspects declining the offer must face the full weight of the law, as must anyone who fails to pay back. Every application must be overseen by an accountant and a lawyer. Helps Batohi immensely, saves millions and kickstarts the economy sooner. What’s not to love? – Chris Bateman
Please don’t despair, and another call for a corruption amnesty
By Pierre Faure*
Many South Africans are in a state of despair, for myriad reasons, including that the economy is moving ahead at a sloth-like rate, unemployment is rising further from an embarrassingly high level, corruption continues to dominate the headlines, and prosecutions of the corrupt are not happening.
Prof Pierre de Vos eloquently outlined the reasons. Surmised from this fine article is that a few decades will pass before all corruption, fraud, theft, etc, cases are brought to conclusion. Prof de Vos ended his article with “Patience is running out.” This is so, and it is accompanied by widespread despondency, social unrest and another wave of emigration of much-needed (in a thriving economy) skills. A review of fertility rates in English-Dutch-Flemish-German-speaking countries will reveal that they are all well below the replacement rate of 2.1 children per mother, making these countries hold out their arms to welcome South Africans of all shades.
It is perhaps opportune to be reminded of what can be achieved if the right team is at the helm of the ship. In a nutshell: the Mandela/Mbeki reign began with a poor economic legacy, but, by judicious management, raised the economy from the dead to achieve an average growth rate of 5.2% over the last four years of the reign (average rate of close to 4% for the full period). Unemployment fell, and rating agencies rewarded the country.
During the Zuma government reign, the ship did not have good people at the helm, and economic growth declined to achieve only 1% over the last four years of the reign (average of 1.8% for the full reign). Unemployment rose, and the rating agencies punished the country.
There are many reasons for this poor state of affairs, which are well known to South Africans, and much of the world. In respect of government finance, the narrative is unambiguous.
As at the start of the Mandela/Mbeki reign, the economic legacy with which the Ramaphosa reign began is dire. However, another parallel, but a positive one, is that the management team of the Ramaphosa era reflects the management team of the Mandela/Mbeki era. We need to be reminded that a fine team, which South Africa has in place now, can make for a better future, but it will take time. The numbers provided in the charts indicate this clearly. There are a number of positive developments and signs that a better future is pending.
A thriving economy, in a nutshell, is driven by the factors of production (natural resources, human capital, and physical capital) and a propitious production environment, which is the responsibility of government. Of these, human capital is arguably central, because it embodies entrepreneurship and productivity and brings together the other factors in production (GDP). Entrepreneurs are the most mobile and eschew a non-propitious production environment: they simply leave and create production and employment elsewhere. Thriving economies welcome human capital and do not tolerate xenophobia. Our team will recognise this.
Back to Prof de Vos’s article and conclusion: “Patience is running out.” It is opportune to again make a plea for a wholesale amnesty for those involved in corruption. Why? Because the production environment is compromised by uncertainty, anathema to business and entrepreneurs. One of the uncertainties is the lack of exposure of the perpetrators of corruption, and the time it will take to bring them to book.
South Africa urgently needs to expose the corrupt, and move on to critically-important economic matters. An amnesty must come with conditions:
- Ill-gotten gains are to be paid back.
- Salaries earned whilst engaged in corrupt activities are to be paid back.
- Those who do not admit to corruption, but are suspected of engaging in such activity, will be investigated and face the full weight of the law.
- Ditto those who admit to corruption, but are suspected of not paying back all the ill-gotten money.
- Each application for amnesty must be overseen by an accountant and a lawyer.
South Africans anxiously await the day when iniquitous corruption is a problem past, which will happen much quicker with an amnesty (and be substantially cheaper), and our fine journalists turn their attention to matters economic.
Please think longer term, and do not despair.
- Prof AP Faure, Professor Emeritus, Rhodes University.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.