Plagues, locusts and SA’s political R factor

Plagues, locusts and SA’s political R factor

The fiscal apocalypse outlined in Wednesday’s emergency budget was biblical in proportion and probably could add a new page to the Book of Revelation.

Instead of reminding us of the End of Times, which is certainly on the cards as the country careers off the economic cliff face, Tito Mboweni settled for the Book of Matthew. He reminded sceptics of the need for firm bedrock to meet the coming plague-induced storm. “The rain came down, the streams rose and the winds blew and beat against the house, yet it did not fall because it had its foundations on the rock.”

Pieter du Toit of News24 warmed to this theme by pouring cold water on it, advising that: “The house the ANC government has built is fast sinking into quicksand.”

Meanwhile, veteran Johannesburg stockbroker David Shapiro was unimpressed and observed: “When the minister of finance starts quoting from the Bible then you know we’re in deep trouble. Hope and prayer are great for religion but not for saving the economy.”

I actually thought Tito would have done better to quote another verse, on a like theme from the same Book of Matthew (12:25), with its ancient but timely warning that “the house divided against itself shall not stand”.

This striking inversion of marxist logic – despite so many communists in the government – tells us that it is the political structure on which the economic superstructure rests. And far from being rock-like, it is deeply fractured.

We know precisely, because he has shared his views so often, which political choices Mboweni favours: ridding the state of zombie SOEs, cutting drastically the gargantuan annual public service wage bill of R713bn, the biggest single item of government spend, and introducing a raft of other reforms outlined in the 2019 Treasury paper.

All these proposals were trailed well ahead of the Covid pandemic reaching these shores. None of them have been enacted.

Meanwhile, as the Book of Exodus reminds us, the locusts continue to feast, devouring resources, stealing money and, as Moses warned Pharaoh, they “cover each and every tree of the land and eat all there is to be eaten”.

If an update were needed to transport ancient Egypt to SA, it came in the plain prose of the auditor-general this week. He unveiled a tale of woe about the country’s ground zero for service delivery, or lack of it – local government.

He noted that only 8% of all municipalities achieved “clean audits” and a lot of dirty dealings and delinquencies were in the rest. His presentation opened with an apt and searing observation: “Not much to go around, yet not the right hands at the till. Or rather the wrong hands grasping for the contents in the till since, extraordinarily, in two provinces [the North West and Free State] there were no clean audits.”

Unless you have been hiding under a rock these past three months you will know that the novel coronavirus is upon us, shattering lives and upending economies across the world.

The critical metric in gauging the spread of this modern plague is the “R” number, the effective reproduction rate and the capacity of the deadly pathogen to spread. If the R factor is over 1, hordes will be infected, below 1 and the disease will peter out. SA’s R number is rising, hence the surge of cases.

Mboweni made it plain that on the economy he can lay out the numbers in unsparing detail. But he is powerless to take the measures needed to avoid the debt apocalypse of which he warned. His political party is simply too divided, and at odds over basic economic reality, to back him.

And so we are left with the political R factor: Ramaphosa. He has vast swathes of power to back his finance minister. He has yet to do so. But he too could remember the many verses on standing firm and being courageous. That is how the rock, not the quicksand, will form the foundations of recovery.

Leon, a former leader of the opposition, now chairs Resolve Communications.
@TonyLeonSA.

Featured in The Sunday Times

By |2020-06-28T08:14:12+00:00June 28th, 2020|Corona Virus, Finance Minister, Tito Mboweni, Uncategorized|0 Comments

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