A disaster of our government’s own making

Jacques Moolman, president of the Cape Chamber of Commerce and Industry.

The latest state-of-the-nation address (Sona) by President Cyril Ramaphosa signals a government largely devoid of solutions to the nation’s most pressing challenges.

What is clear from Mr Ramaphosa’s underwhelming address is that, as the president stated, under the current leadership we have become a nation of “hope and resilience” rather than one of success and development. Action and results speak louder than words, and the president’s address was sadly lacking in performance indicators that show the true state of the nation. Rather than take us into his confidence by confirming what most South Africans already know – that we are not better off now than before Covid-19 – the president attempted to persuade us that we are well on the way to recovery. We disagree.

The fact is our now officially declared state of disaster is self-created. The president would have done better to declare a state of disgrace, for, unlike a disaster which generally describes something beyond our control, our current predicament was avoidable.

Of particular concern is the attempt to gloss over some of the most glaring challenges with “billboard” interventions such as a new minister of electricity, as well as a new state-owned entity to oversee other state-owned companies. As a Chamber, we are convinced that the less the state has to do with energy provision, the better in terms of overcoming the current crisis: creating more government posts to resolve a crisis largely caused by a bloated bureaucracy is a recipe for even more disaster.

Instead of public service jobs propped up by taxpayers’ money, we urgently need private sector and market growth. We have a roadmap to fix public enterprises, but where is the roadmap to new markets?

Mr President, we agree with your sense of urgency, we do not share your sense of direction.

The president would have us believe that government is doing well under trying circumstances. In our own assessment this is untrue. Our own analysis suggests we as business need to demand a lot more of the current administration.

Here are some of the figures you did not hear from the president:

• To date, Eskom has been provided with over R136 billion to pay off its debt with a further R88 billion to be supplied until 2025/26.

• The company continues to rely on government guarantees and equity injections to finance its operations. The company received R31.7 billion equity support from government during the 2022 period, but its liquidity remains constrained because of unsustainably high debt servicing costs.

• The debt assistance is supposed to help Eskom perform better and allow it to invest more in its ageing infrastructure. However, though the company has already received a part of its bailout from government, the percentage availability of South Africa’s total installed capacity of 53.7 gigawatts at the end of 2021 fell to below 60% in October 2022 as its coal-fired power stations continued to break down, resulting in power cuts.

To his credit the president did at least highlight several serious shortcomings, such as the dismal performance of local government and state-owned enterprises. Figures obtained from the Treasury’s website reveal what he did not tell us about the extent of the problem:

• Allocations to the Department of Public Enterprises have increased during the past decade from R23.7 million in 2013 to R23.9 billion in 2022.

• State-owned companies’ governance assurance and performance budget allocation also increased by 155% between 2013 and 2022, from R23.8 million in 2013 to R60.7 million in 2022.

The president was outspoken about government’s determination to root out corruption, but consider these stats taken from National Prosecuting Authority annual reports:

• Since 2018, the NPA’s conviction rates in complex commercial crime have decreased from 95% to 90.5% in 2021.

• The number of finalised cases has also been on the decrease (800, 649, 307 and 380 cases were finalised from 2018 to 2021, respectively), while statistics from SAPS show that reported cases of commercial crime have been increasing with figures showing a 41.6% increase from 20 834 cases in the third quarter of 2018 to 29 516 cases in the third quarter of 2022.

Also the president mentioned corruption cases going to court. That’s not the same as telling us about the conviction rate. Having a trial that goes nowhere because no-one ends up in jail is not helpful.

The president also waxed lyrical about efforts to stamp out crime. He should have mentioned some of these stats gathered from SAPS publications:

• Year-on-year third-quarter crime statistics have been increasing since 2018, with total contact crimes rising from 150 420 in the third quarter of 2018 to 162 518 in the third quarter of 2022.

• The increase in crime statistics does not complement the increases in the budget allocations for the police services, which have been increasing on a year-to-year basis since 2005 from R31 billion in 2005 to R111 billion in 2022, representing a 258% increase over 18 years.

For all these reasons – and many others too numerous to detail here – we fear a descent into a deeper state of disaster if government fails to involve the necessary social partners in resolving our most critical challenges.

Government has failed to control critical expenditure, has failed to make our business environment more globally competitive, and has contributed to the soaring cost of living by failing to effectively manage state-owned enterprises.

As the president rightly pointed out, we deserve more from our government. Yes we are a resilient nation. But we would also like to be a successful one.