Introduction

On the 9th of December 2015, President Jacob Zuma pressed the “red button” and dropped what amounted to a “nuclear bomb” on the economy in South Africa.

The decision to fire the Minister of Finance, Nhlanhla Nene, turned an economic downturn into an economic crisis, and unleashed a firestorm, which destroyed investor confidence in South Africa.

We are now in deep economic trouble. We are on the brink of a recession. We have spiraling inflation. We are staring at a fiscal cliff. We are facing a debt mountain. And we are at risk of a ratings downgrade.

We have 8.3 million people who do not have jobs, or have given up looking for jobs, and who live without dignity, without independence, and without freedom in South Africa.

“Doing things differently”

And so, the State of the Nation Address was an opportunity for the President to inspire the nation, to give hope to the nation, and to lead the nation.

It was an opportunity: to set out a decisive response to the economic crisis in South Africa.

It was an opportunity: to set out a decisive response to avoid a ratings downgrade in South Africa.

It was an opportunity: to give hope to the 8.3 million people who do not have jobs, or have given up looking for jobs, in South Africa. 

And, it was an opportunity: to do so with passion, and with conviction, and with urgency.

We got off to a good start.

A frank assessment.

A “turnaround plan”.

“Doing things differently”. 

I thought: this is it.

This is the moment.

But, then: nothing.

No inspiration. No passion. No conviction. No urgency. No hope.

And, most important of all:

• no decisive response to the economic crisis in South Africa; and
• no decisive response to avoid a ratings downgrade in South Africa.

Yes, there was a “turnaround plan”. But, the “turnaround plan” did not contain any new economic policy.

What the “turnaround plan” did contain: was economic policy that had not been implemented.

The Presidential Review Commission on State-Owned Enterprises was completed three years ago. Its findings have never been implemented. And, it is hard to believe that its findings will ever be implemented.

And, what the “turnaround plan” did contain: was economic policy that had been implemented, but had failed.

The “cost containment measures” are important but they were largely symbolic, targeting R25 billion, and saving a mere R2 billion, or 0,2% of total expenditure in 2015/16.

What the turnaround plan did contain: was one-step-forward, one-step-backward economic policy contradictions.

We want to encourage investment. But, then we want to prohibit foreign land ownership. Which will discourage foreign investment.

And, we want to phase out state-owned enterprises. But, then we want a state-owned pharmaceutical company.  Which will crowd out private sector investment.

In the end, the “turnaround plan” only served to illustrate:
that the Minister of Finance, Pravin Gordhan, has very little policy space in which to manoeuvre ahead of the budget;
that business leaders were listened to but were not heard; and
that economic policy is tied up in an economic knot, that will never be undone, because of the political knot inside the ANC/SACP/Cosatu Alliance.
The fact is a ratings downgrade is now more likely this week than it was last week.

“Actually doing things differently.”

But, it’s not too late.

It can be done.

But, then we, actually, have to do things differently.

And, to, actually, do things differently the President should consider announcing the following, during his reply in the State of the Nation Debate:

“Honourable Members:

I have listened carefully to this debate and understand we need decisive action to deal with the economic crisis in South Africa.

I have, therefore, decided to amend the “turnaround plan”, based on your inputs, as follows: -

First, to ensure there is no policy uncertainty on the economy I have decided to appoint the Minister of Finance, Pravin Gordhan, (1) to head the economic cluster in cabinet, (2) to take full responsibility for the development of economic policy, (3) to conduct impact assessments of all executive legislation relating to the economy and (4) to take full responsibility for the implementation of the economic policy outlined in the National Development Plan.

Second, to boost economic growth and create jobs I have instructed the Minister of Labour, Mildred Oliphant, to immediately table amendments to labour legislation so as to ensure that (1) collective bargaining agreements reached between big business and big unions are not imposed on small businesses; (2) to enforce secret balloting before calling a strike; and (3) to exempt small businesses, which employ a small number of workers, from complying with the labour legislation, to encourage them to employ more workers.

And, I have instructed the finance minister to implement a real Youth Wage Subsidy to help young people find jobs and gain work experience.

Third, to raise revenue I have instructed the finance minister to dispose of non-strategic state assets, including government’s stake in Telkom, which could raise an estimated R 11 billion in revenue. 

And, I have instructed the Minister of Public Works, Thulas Nxesi, to begin disposing of non-strategic state assets, including land and buildings, which also has the potential to raise billions of rands in revenue.

Fourth, to cut spending I have instructed the Minister in the Presidency, Jeff Radebe, to reduce the size of the cabinet to 15 ministries, which will save an estimated R 4.7 billion per year.

I have also instructed the Minister of Defence and Military Veterans, Nosiviwe Mapisa-Nqakula, to terminate the acquisition of my VIP jet, which will save an estimated R 4 billion.

And, I have instructed the Minister of International Relations and Cooperation, Maite Nkoana-Mashabane, to immediately begin closing all non-strategic foreign embassies, high commissions and consulates, saving a significant proportion of R3.5 billion per year.

I have also instructed the finance minister to table a detailed quarterly report on spending for each department on non-core goods and services - including spending on travel, catering, entertainment and consultants - in this Parliament.

Because, we know, transparency is the most cost-effective method of preventing wasteful expenditure.

And finally, to improve the performance of state-owned enterprises I have instructed the Minister of Public Enterprises, Lynne Brown, to immediately begin implementing a programme to privatise, or part-privatise, state-owned enterprises, beginning with the privatisation of South African Airways.”

Conclusion

Mr President: it can be done.

But, only if we, actually, do things differently.

And, we must, actually, do things differently, to give hope to the 8.3 million people, who do not have jobs, or have given up looking for jobs, and who live without dignity, without independence, and without freedom, in South Africa.

Because, in the end, South Africa will never “belong to all who live in it” as long as millions of people without jobs simply live-to-die in South Africa.

It can be done.

But only if we, actually, do things differently.

It’s up to you.

And so, over to you, Mr President.