The ANC government’s “anti-growth strategy” for South Africa has made economic growth in the country collapse through bad policy, catastrophic governance, and a lack of leadership.
This is the view of Centre for Development and Enterprise executive director Ann Bernstein, who told 702 that South Africa has an “anti-growth” strategy that has caused economic growth to collapse.
Before the country can start to fix what is wrong, it needs the “correct diagnosis”, which the President and government have yet to give.
“What can we do to get growth going again? We came to this very depressing conclusion, which is that the essential precondition of growth in South Africa today is that you can’t start to rise until you’ve stopped falling,” she said.
The government must focus on only a handful of things at once to turn the country around rather than developing “laundry lists of how to fix everything all at once”.
Bernstein explained that this is particularly prevalent in South Africa, where the state is very limited in what it can accomplish, especially in a short period.
She suggested three priorities that South Africa’s government has to focus on.
Firstly, the state must improve security and the rule of law. The “deepening penetration of organised crime into a rising number of economic sectors is a big break on growth”.
The government must, therefore, build its capacity to resist mafias that are making economic growth increasingly impossible.
She explained that the government needs to build society’s capacity by protecting itself from corrupt members of the political, bureaucratic and economic elites.
The second priority is addressing the energy and logistics crisis.
“We must stop delaying what we need, which is to move away from monopoly provision in both energy and, importantly, in terms of rail and ports, and get competitive markets working,” she said.
The third priority is stabilising public finances. Despite the National Treasury articulating the need to reduce the deficit and stabilise the country’s debt ratio, “far too little has been achieved”.
“And now they are requesting all institutions throughout the state to cut back because we’re running out of money,” she said.
“This is a terrible signal if you want to get growth going because investors will be really worried. This is a risky situation. Will my taxes go up? Will there be a fiscal crisis?”
She said there is only one true way to stabilise public finances – cutting expenditure.
Getting the basics right
Bernstein said it is “hard to see how the current leadership and the way in which the country is being led can actually deal with these three priorities”.
The three priorities are like the basics of the social contract that we have between the citizens and the state, and it’s not working.
“Leadership is a very big issue, and we can’t continue with people in the cabinet who really can’t do their jobs,” she said.
The country cannot recover if the ANC government’s priority is the party and not the national interest – a “critical issue” under the current regime.
Bernstein said one of the big problems with the reforms the government currently has in place is that they do not have end-points, which means the country is always in “crisis response”.
“We go round and round because we don’t have a proper diagnosis because we won’t speak the truth about the cabinet, which is that, in many respects, it is not competent to run a modern society,” she said.