THE dramatic events this week which saw the removal of finance minister Nene and his replacement by former reserve bank governor Tito Mboweni arrived not a moment too soon.
With the ruling ANC on the ropes after state capture revelations at the Zondo Commission. Nene’s departure signals the demise of Zumanomics and hopefully the re-introduction of the pragmatic, consensus-based policies which gave rise to the boom period under Mandela and Mbeki.
Anyone appreciating the opportunities in the bond market as many analyst did, may find it painful to digest other facts surrounding the South African economy, currently in its longest slump since 1945 .
Economic stimulus plans announced by President Ramaphosa will come to naught unless there are serious policy reforms.
Reforms which can only happen if the entire economic paradigm and political economy of the country is shifted, from big government for the sake of big government, to household responsibility and individual freedom.
The country recorded a surplus last quarter, a factor of the currency, which also has an effect on consumer prices.
Getting South Africans to work, requires entrepreneurs and individuals ready to create jobs, thus the politics of the Zondo commission is revealing in what it shows of the opposite trajectory under Zuma. Ergo the clandestine leftism of the former President’s associates, all squaring state capture and the Gupta’s with a ‘dictatorship of the proletariat’ and other Marxist mantras, best understood by dashiki-wearing economics students sipping chai lattes while quoting Fanon and Frere.
The business environment in the country is said to be hostile, a result of ‘ideology getting the better of pragmatism’. A series of blunders involving populist rhetoric on land reform and property rights, and inability to deal with parastatals, in other words, State-owned Bureaucracy, has hobbled Ramaphosa’s government.
Under the last administration, cabinet posts almost doubled, as bureaucracy took its toll on productivity and individual freedom.
Ramaphosa has yet to pronounce on any constructive changes to policy in this regard.
South Africa’s unions must take some of the blame in driving a one-sided narrative, a wedge between the state and business, that has shifted the party from workers rights to political intrigues that saw the Guptas rise to power amidst BRICS neo-colonial ambitions.