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The Centre for Development and Enterprise (CDE) today called on political decision-makers who believe in the constitution, the rule of law and deepening economic reform to put the country ahead of narrow interests.

South Africa’s political leaders are currently locked in multi-sided negotiations about who will form the next government. While CDE shares South Africans’ hopes and anxieties about this, we are convinced that the success of any new government will depend on its policies, not just on who is in power. 

“Negotiating a new governing arrangement for South Africa should not just be about power, politics and positions. These discussions need to go beyond what a new government will look like and include what this new government will do once in office,” said Ann Bernstein, executive director of CDE.

“The state is collapsing around us, with skills, firms and capital leaving our shores in great numbers. The parties negotiating a new governing arrangement need to agree on an urgent reform programme centred on dealing with the country’s most pressing challenges,” said Bernstein.    

Bernstein was speaking at the launch of a new CDE project called AGENDA 2024: Priorities for South Africa’s New Government. 

Over the past six months CDE has worked on identifying what a new government might do to address our many crises. This important project builds on collaboration with experts, business leaders and others across our society and makes the case for a policy agenda that is substantially different from what we have seen over the past 15 years.

CDE’S AGENDA 2024 identifies five urgent priority areas that the new government, once established, needs to focus on in its first 180 days in office:  fix the state; drive growth and development by freeing up markets and competition; build a new approach to mass inclusion; deal with the fiscal crisis; and strengthen the rule of law.

Fix the state   

Fixing the state must start with a reorganisation of the Cabinet and the Presidency, and getting the right people into the right positions at senior levels in the state.

“The new President should resist the urge to create more positions than is required to ensure a stable coalition Cabinet. We need a reorganised Presidency with a smaller, fit-for-purpose Cabinet characterised by excellence and commitment to a deepened reform agenda,” said Bernstein. 

“We cannot fix the state if we continue deploying people to senior public sector positions based on party loyalty instead of competence. There is an opportunity now to ensure that only the most qualified people are appointed to senior positions in the public service and state-owned companies,” added Bernstein. 

CDE will soon release its first report of the AGENDA 2024 series on how to reorganise the centre of government.

Drive growth and development by freeing up markets and competition

The second priority acknowledges the role that faster, market-driven, economic growth can play in lifting millions out of poverty – as we have seen in India and China. 

“South Africa needs to become a welcome place for investors, who have many other options. Markets, competition and businesses can do so much more in meeting SA’s challenges, whether it is in energy generation, the aviation industry or logistics,” said Bernstein.

“Public-private partnerships are an important way to harness private sector capacity and capital for infrastructure, but they need a reliable state partner. Investors need a capable, welcoming state that offers policy certainty and stops blocking private sector activities through over-regulation,” she added.

Build a new approach to mass inclusion

The third priority recognises that the country’s approach to transformation has failed, and we will recommend a new approach to tackle this generational challenge differently.

“The best route out of poverty is job creation, and that requires a growing economy. But inclusion must not be an afterthought. We have a highly redistributive state that, when it works properly, helps the poor by providing quality services such as training, education, healthcare and transport,” said Bernstein.

“South Africa needs a new approach to mass empowerment that helps the poor instead of enriching the elite. We need to incentivise low-skilled employment, which is South Africa’s most critical national challenge; and we need to redirect funds from government to the private sector to expand opportunities for black entrepreneurs,” she added.

Deal with the fiscal crisis

We cannot stop South Africa’s economic decline unless we tackle the fiscal crisis.

“Government needs to start living within its means and stop spending money it doesn’t have. We must not commit to unaffordable programmes like the NHI and a basic income grant, and we must moderate increases in average government remuneration,” said Bernstein.

“In the context of tight fiscal constraints, it is important to redirect spending away from failed or ineffective programmes towards growth enhancing activities. This includes addressing the performance and financial viability of state-owned companies, and introducing best practice principles to fix the shortcomings of the procurement regime,” she added. 

Strengthen the rule of law

The final priority involves strengthening the rule of law, which has become severely eroded over the last 15 years.

“Not only do we have to stop a parasitic elite feasting on the state, we have to make communities safe. This means putting fear into criminals – at all levels in our society – that they will go to jail if they break the law,” said Bernstein.

“We need to reform our criminal justice system by implementing measures that strengthen the quality and independence of the judiciary through reform of the Judicial Service Commission. The NPA has failed to hold powerful people to account and needs reinvigoration and an infusion of excellent professionals and leadership, ” she added.

“The political decision-makers at the negotiating table have a unique opportunity to change the course of the country for the better. Getting SA back on track has to be a story about markets and states, and how they can work together to perform miracles of upliftment. It must be a story of overcoming poverty and the routes out of it, of successful transformation, of the foundations for a successful democracy: sound finances and the rule of law. Most importantly, it must be a story about leadership and how destructive it is to appoint the wrong people in key positions,” said Bernstein.

“Arresting South African’s terminal decline requires a new approach for government. Hard choices must be made about people, about policies and about how best to get things done. Time is running out. The time for half-hearted and half-baked reform is over; the time for fundamental change is here,” added Bernstein.

CDE will be releasing reports on various catalytic actions within the five priority areas in the coming weeks.

Issued by Centre for Development and Enterprise