In an act of conspicuous national self-destruction, the ANC has set the scene for the ejection of the DA from the GNU, writes Tony Leon.
Circa 1899, the father of psychoanalysis, Sigmund Freud, developed the idea of “screen memory”. This suggested that one memory can function to hide another, typically, unconscious mental content.
Perhaps only psychologists today can explain why US President Donald Trump is blowing up the world economy with his version of disaster capitalism – laced with malice toward all (friend and foe alike) and conspicuously self-harming the number one economy on the globe, his own homeland, the USA. And visiting devastating and collateral damage on most countries and on all international arrangements in place for 70 years.
Here at home, we are not simply ill-prepared for the economic fight of our lives, unmatched since the Rubicon economy of 1985, but with far worse currency and bond yields. But in an act of conspicuous national self-destruction, the ANC (or factions within it) has set the scene for the ejection of the DA from the GNU.
Exactly eight years ago, in April 2017, Nomvula Mokonyane infamously shouted, in her staunch defence of embattled Jacob Zuma, “Let the rand fall, we will pick it up.”
She has been heavily implicated, with a slew of gifts from Bosasa, from an Aston Martin to braai packs, by the Zondo Commission. Like her promise to pick up the currency, nothing further has been heard from the National Prosecuting Authority, which was instructed to investigate her for corruption.
But since then, Mokonyane has fallen upward to a top position (deputy secretary-general) in the “renewed and reformed” ANC. Meantime, the ZAR is in its sharpest descent in the recent and volatile past.
Mokonyane is also part of the circling hyena pack determined to devour the economic carcass of the country by expelling from government the DA, one of the remaining buffers against financial profligacy and populist predations.
Expect rand to fall further – economist
Just how much further the rand can fall in the event of a DA exit was spelt out by Investec chief economist, Annabel Bishop.
Our currency’s downward spiral, the worst performing among emerging markets, could – according to her – soon get a whole lot worse:
The rand is likely to weaken past its prior weakest point of R20/$ on a DA GNU exit. It is likely to head towards R21/$ immediately and then weaken to beyond R22/$ depending on the new partners of the GNU, with the sudden shock to financial markets and worries over a left-shift in economic policy.
In other words, in the event of a DA exit, every growth projection and borrowing estimate in the current budget will be consigned to the Department of Wishful Thinking – perhaps in a special and newly created ministry Ramaphosa will fashion soon enough.
Back to Freud, as good a guide as any for these extraordinary and terrifying times.
There are several “screen” reasons for the ructions now rocking the GNU, whose arrival last June saw an upsurge of investor and consumer confidence in the country and its prospects – not a bad thing when we rely on the bond markets to fund our R6-trillion national debt.
On its face, the argument between the DA and ANC on the Budget impasse is about the VAT tax hike and the issue of economic policy, and the real meaning of power sharing. All of these are factors in the fight. But they disguise other issues that lurk in the background or in the hidden spaces where the dark arts of politics are often practised.
Sunday Times editor, Makhudu Sefara, shed light on one meaning of this, hidden behind the screen of the ANC councils. But it was thrown open by a leaked audio from one such gathering last week.
He wrote on the weekend: “While many are focused on whether the DA will survive the NWC [ANC national working committee] meeting… a proxy battle is under way within the ANC for about the direction the party must take.”
Paul Mashatile
And leading one section of this proxy battle, alongside others such as Mokonyane, is ANC deputy president Paul Mashatile. He might be a failed provincial political grifter with an amateur grasp of geopolitical realities and an even worse understanding of the entropic economic forces engulfing us. But he gets power and is eager to grasp it for himself (and his cronies and enablers).
As Sefara elaborates: “Mashatile is ready, but perhaps desperately and amateurishly over eager to take over from [Cyril] Ramaphosa. Behind the scenes… he directs and enthusiastically pushes for the DA to be expelled.”
On News24, editor Adriaan Basson echoed this view, noting how Mashatile has in past few days ended his long national silence, beyond bald banalities of inconsequence on most topics.
Mashatile cannot hide his excitement at the prospect of the DA being ejected from the GNU. There is no way to sugarcoat this: he never wanted the DA inside GNU and would have preferred to co-govern with the EFF.
And, as Basson notes, this will move forward “his breathless ambition to succeed President Cyril Ramaphosa”.
Nothing much hidden behind the screen here. Except for the fact that absent hard economic reforms and spending cuts and reprioritisations – of the precise type suggested by the DA – a wasteland beckons. Whoever is left holding the ring, it will be in debased and debauched currency with unsustainable borrowing needs and costs. And leading a country into a debt trap that will close on it when the cost of borrowing to meet ever-expanding spending sprees chokes off all over government programmes.
Hidden behind a screen, or cloud of misinformation and selective leaks from the ANC duly parroted by several commentators and media outlets, are the actual demands of the DA for its continuation in government and support for the current Budget.
Writing in Currency this week, veteran financial journalist Tim Cohen revealed them for public display.
Cohen writes that the DA, contra the energetic disinformation campaigns, did not use the Budget impasse to remount its opposition to a raft of growth crushing (and worse) legislative instruments from the Expropriation Act to NHI. To these unmentioned demands – in current context – the ANC and its media echoes labelled the DA as “unreasonable” and “overplaying its hand”.
Rather, the DA “demands” were a relook at the Public Procurement Act, which has opened the sluice gates to corruption and overspending, a say in the operations of economic reforms housed at Operation Vulindlela (not to take it over as Mashatile egregiously and wrongly suggested) and a detailed spending review to plug the yawning fiscal gap in the Budget.
Cohen notes on these mild “demands”: “But the ANC doesn’t want its boondoggles constrained and the political will to constrain them has never been apparent, which is why the DA feels that it needs to be part of the process. This is not ‘arrogance’, it’s just realism.”
The precise “realism” to boost growth and dent unemployment which caused the DA to sign up for government last year.
There is a final screen which uses hollow words to vaporise essential meaning to mask a dissociation from reality. This was evinced in Ramaphosa’s newsletter to the nation this week. He claims the contested Budget, yet to be finally enacted, “reflects the strategic priorities of the government of national unity, inclusive growth and job creation, reducing poverty and tackling the high cost of living…”
No agreement
It is blatantly obvious there is no agreement at the heart of the GNU on ‘strategic priorities’ hence the discord between the largest and second largest GNU parties.
As for the achievement of growth and jobs? Moeletsi Mbeki – using the statistics of SA Revenue Services and IMF noted , “63% of revenue is spent on salaries (for government workers) and 21% on debt service costs. Thus, 84% of revenue collected by SARS is spent on two items, public sector salaries and debt service charges.”
The 42% of working-age South Africans who can’t find work live outside the magic circle of state employment. And the Trump tariff effect (which will devastate several economic, job rich sectors here) is going to throw thousands more South Africans out of work . A declining currency and bond yield spike-will inevitably drive up the 21% currently consumed by debt service costs.
We are currently, to borrow a phrase, in ‘a perfect storm of worsening dilemmas.’ But things could soon, depending on outcomes of ANC conclaves, worsen even more.
Amid this there is much not to like about the current GNU, which often resembles a pantomime horse – the front and back legs moving in opposite directions.
But removing the one of those legs, the party with at least a credible commitment to some growth and tamping down on dubious (and worse) wasteful spending will sharply worsen matters.
Why, then, does Ramaphosa seem to act – at best – as an interested bystander in the unravelling of his signature achievement, the current GNU? And possibly – in the process – hasten his own political demise? Perhaps Dr Freud has an answer.
–Tony Leon is chairperson of a communications company and former leader of the official opposition.
