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Now is the ‘it’ moment for government to act on SA’s energy crisis

Limited understanding about economics and the role it plays in moving a country forward emerged during and after Sona.
The members of the political elite prefer the present as this is where they are important and have assured income and perks, says the author. Image: Shutterstock

I have painstakingly looked for something positive to extract from the State of the Nation Address (Sona) delivered by President Cyril Ramaphosa last Thursday.

I did however welcome his admission that “the recovery of our economy has stalled as persistent energy shortages have disrupted businesses and people’s lives”.

South Africa’s energy crisis has me thinking about the term ‘time preference’, mostly used in economic literature to mean the present is preferred over the future. It has a double and counterfactual meaning – the first being that if you prefer the present, you will spend money to indulge your desires with little care about the future; the second being that if you prefer the future, you will starve your desires and save money for the future so you can indulge later.

By the same token, the incessancy of load shedding, the crisis mode and the several failed plans to solve it, make me wonder if the present situation is better than the future may be, or will the future be worse?

Lack of conviction

The president spent a lot of time talking about Eskom in his address, but he didn’t have the conviction of a man who is on top of the crisis. Certainly, the International Monetary Fund and rating agencies didn’t think so; of all factors that could lead to a further economic downgrade, Eskom currently poses the highest risk.

To restore confidence – not just for agencies and international organisations, but more importantly for the business sector – government (and by that I mean National Treasury) must show what it can decisively do if the handicaps are removed….specifically, the handicaps that seek to represent a party’s position in relation to how Treasury must operate and take action.

This year is it. A year that might show whether the decision on Eskom and most state-owned entities is informed by preference of the present over the future.

The energy crisis and other issues such as the uncertainty surrounding the national health insurance, the ongoing contestation of the mining regulatory framework and the behind-schedule infrastructure plans (such as the building of dams) has reduced the country to a point of advancing stagnation.

SA is punching well below its diminishing real potential.

Together, these elements have arguably made any economic recovery aspirant because the insufficiency of the touted solutions to them is glaring and made unworkable by party politics.

The behaviour and the utterances of politicians from all parties during and after Sona revealed parliament as the latest playhouse, filled with an elite who have no care about the future.

Expectedly, many limited understandings about economics and the role it plays in moving a country forward emerged.

Opportunity cost

The world economy does not wait for a country, and a country seldom recovers from opportunity cost.

The recent state visit by German Chancellor Angela Merkel gave us a glimpse into what the German private sector thinks of SA. To them, their investment in the country hinges on the solving of the energy crisis. German multinationals with operations here are not announcing anything beyond what had already been planned. Any plans to expand operations were already in place. To assume they are new indicates a lack of awareness.

It doesn’t matter how many pacts or promises we make, unless there is tangible evidence of stability in power generation, they simply will not invest. Would you?

Among the problems South Africa has is a political elite that is frightened by the idea of no longer being in government.

They prefer the present – where they are important, have assured income and perks, and are assured of pension for the future. For them, the present is the ideal time. They prefer it over the future because their time will be done and who will remember them then?

The real motives

As democracy matures, it has become clear that the real motives of the government class at present – including the past 10 years – are not focused on providing stimulus to the economy. It has been purely about indulgence, in particular the transferring (looting) of future resources to the present (by facilitating state capture) and saying ‘We don’t care about the future, let them starve’ because many won’t be there.

Moreover, there is the angering notion that many will not be called to account.

The incessancy of load shedding is the ‘it’ moment for Treasury with regards to the coming budget speech – and for anyone in government who prefers the future to act. For Finance Minister Tito Mboweni, this, then, is the chance to take a powerful decision, one that might have negative political outcomes for him.

Doing nothing does more harm because it signals a preference for the present indulgence and a future of starvation or total economic collapse.

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COMMENTS   25

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‘make me wonder if the present is better than the future, or will the future be worse?’

Huh?

Hahaha
Mweb quality jurnos surely a reflection of something..

“The incessancy of load shedding requires bold action”

NO S#$T Sherlock? the fact that this is found novel to be reported is an indication of the problem in SA..

Lol, woops. I love statements like these.

Heads I win, tails you lose.

ok better so, Mamokgethi edited the article a bit according to some comments..

Unfortunately the captains of SA never read or cared about any previous calls to such urgent action..

When you have a leading party that just refuses to put a stop to the theft of electricity or the non-payment for this and other services, this is what it gets to. The pot runs dry.

A party whose central premise rests on “DEMANDING YOUR VOTE, BECAUSE WHO ELSE YOU GONNA VOTE FOR?” displays an arrogant display of entitlement and lack of competence that DESERVES to be immediately kicked to touch!

A party’s electability must stand on the superiority of what it offers. Not on just pointing to the faults of its opponents.

And the arbiter of who is doing that best, is me the voter, Not some jerk do-nothing politician caring only about his own electability and parliamentary pension.

Like it or not, the DA are the only party in South Africa with a track record of something that can be recognised as good governance.

It is obviously an enormous and extremely bitter for any ANC follower to swallow, but even if you don’t like the DA, you’re going to have to vote for them for South Africa to improve in any way.

Over the past 25 years, the ANC have brought nothing but looting and destruction.

No, I am not going to vote DA.

They lost my vote and will not get it back.

They do not represent me.

They are a spent force, and circling the drain in ever-dwindling circles.

If you do not vote DA, flawed though it may be, you will get the government you deserve.

as long as the ANC rules…we all know the answer!

we have to take bold action

don’t be part of the problem

rather late than never

if you can’t take the heat, stay out of the kitchen

now is the time not to be afraid

monday morning first thing

—————————
OK, I have done my part for the day in the talking section
now back to work, to earn more to pay more tax
so that the people in charge can do the talking
——————————

The only bold things in SA are State looting and cash in transit heists.

Mamo, “SA is punching well below it’s diminishing real potential”.
I think there is a typo there Mate, it should be “pinching” not “punching”!!

No amount of anc bold action will help SA. Politics is not the answer to South Africans problems either. We need to get rid of the Party System and only allow independent candidates to run for the top job in the country through a elevated voting system.

No money, no advertising only true community selection of candidates.

With the best constitution in the world every economic indicator is pointing downwards and this has been the case for more than 15 years.

Very true as “anc bold action” means steal more, more desperately as the trough is running empty.

Next year voters will have a clear choice in the municipal elections: between water and electricity or the glorious ANC.

“As democracy matures, it has become clear that the real motives of the government class at present – including the past 10 years – are not focused on providing stimulus to the economy. It has been purely about indulgence, in particular the transferring (looting) of future resources to the present (by facilitating state capture) and saying ‘We don’t care about the future, let them starve’ because many won’t be there.”

Exactly … and a view expressed daily in columns like MW’s for many years; so how does change materialise other than through violent revolution?

“Limited understanding about economics” – this author, simply the most massive understatement in the history of homo sapiens. Then again, par for H Naledi

Given that the crisis started 12 years ago I ask ‘Why now’ for the moment to act?

This is actually a great article – thank you. It highlights the problem spot on.

How do you appease both an expectant greedy Capitalist economic model and your voters mired n poverty and joblessness? This is CR’s dilemma. It’s a tough one. If he errs too hard on the side of one, he loses on the other side.

It’s almost an impossible balancing act. Almost!
Perhaps he should start by convicting those that are part of the unraveling of Madiba’s Dream?

He does however have a card up his sleeve in the form of our Platinum/Palladium/Rhodium reserves…why do you think that Merkel, Trump, Putin, Goldman Sachs etc are paying us so much attention. Do you really think that Bill Hates came here just for a game of tennis? I don’t!

Apologies …. Bill Gates.

Those people who complain about the EFF’s disruption of Parliament imply that Parliament is relevant.

For many people in this country Parliament is making absolutely no difference in their lives.

The EFF is portraying this lack of relevance of Parliament, without realizing it.

Totally agree with you, Groen!

If they all went home (BOTH sides!) – and stayed there – nobody would know the difference.

The DA in Parliament have lost touch with the electorate,and have become just talking heads in an expensive navel-gazing circus.

The real power, and influence, of an opposition when it does not have the majority in Parliament lies instead in the provinces and towns where it does traction.

End of comments.

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