President Cyril Ramaphosa is not wasting the opportunity brought by the Covid-19 crisis to restructure the South African economy.
When giving his address on Tuesday evening on the economic and social actions government is taking to tackle the crisis, he was short on specifics but said he will take the opportunity to push through much-needed economic restructuring.
“We are resolved not to merely return our economy to where it was before the coronavirus, but to forge a new economy, in a new global reality.”
There will be no going back to business as usual, as the coordinated efforts by institutions across the social and economic spectrum have laid the foundation for the country to go in a new direction.
“Our economic strategy going forward will require a new social compact, among all role players — business, labour, community and government — to restructure the economy and to achieve inclusive growth.”
Ramaphosa said the country would have to wait until Thursday for more details, but did lay out a broad agenda for South Africa post the Covid-19 crisis.
“Building on the cooperation that is being forged among all social partners during this crisis, we will accelerate the structural reforms required to reduce the cost of doing business, to promote localisation and industrialisation, to overhaul state-owned enterprises and to strengthen the informal sector.”
No going back
In a sense, this agenda is not new. Looking back at his State of the Nation Address in February, he had already committed to tackling several of the things in last night’s speech.
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The problem is that he never seemed to have the clout in his own ruling ANC to push through the much-needed changes.
Take South African Airways (SAA) for instance. Before the national lockdown grounded its fleet, Minister of Public Enterprises Pravin Gordhan had fought to keep the troubled airline alive, despite it going into business rescue.
With no cash coming in, Gordhan and SAA’s trade unions are clutching at straws. In a statement released just prior to Ramaphosa’s address, the Department of Public Enterprises said the government was “in no position to provide more capital to SAA and that all parties need to commit to a creative solution for SAA to avoid a scenario where the business rescue is deemed to have failed”.
Unlike Gordhan and the unions, the business rescue practitioners have skipped the bargaining stage of grief and gone straight to acceptance, as they proposed selling off SAA’s assets last week to pay severance packages to its 4 700 employees.
Though Ramaphosa has shown some remarkable fortitude when it comes to facing up to the difficulties brought by the Covid-19 crisis, his timidity has at times gotten the better of him, like when SAA’s business rescue practitioners said it would have cut jobs to keep the airline going. Ramaphosa publicly bulked at this, seemingly forgetting that there was nothing legally he could do to stop it.
There will be no going back on Thursday when he spells out his plan.
He can’t announce that he is setting the country on a new route but then backtrack because he did not think out all the consequences when starting out on the journey.
For now, we should be encouraged as he has shown some admirable resolve. It was not easy to extend the lockdown by two weeks, but he did it knowing the pain it would bring.
And although the recovery is still some way off, at least he has a vision for how the country will be once it comes to fruition.
“Our new economy must be founded on fairness, justice and equality. It must use every resource, every capability, and every innovation we have in the service of the people of this country. Our new economy must open up new horizons, and offer new opportunities to all South Africans.”