I heard a story some years back about a European diplomat whose term of duty in South Africa had come to an end in early 1989.
As far as I can recall the details, his final report to his superiors was that South Africa was descending into civil war; neither the state nor the liberation movement could gain a definitive upper hand; the economic situation was approaching free fall. There was little inclination or the necessary imagination to find a way out. Brace for the worst, he warned, not just for South Africa, but for his own country’s interests in it and for the not inconsiderable expatriate community for which his government would be responsible.
He’d apparently been reassigned to his country’s mission in South Africa some 15 or so years later. While still an enormously challenged society, South Africa had defied his worst fears. Indeed, at that point, public finances were in decent shape, the economy was growing and there were solid grounds for optimism.
It’s interesting how things turn around.
I’ve been thinking about this over the last week. Readers of this column will know just how serious and severe the crises besetting South Africa are. At the time the abovementioned diplomat returned to South Africa, the notion of South Africa as a failed state could justifiably be dismissed as far-fetched alarmism. Now, it’s a real consideration.
But it’s not an inevitability. And in this respect some recent developments have caught my attention.
Rather under-reported but potentially highly significant was the release last week of the official strategy for professionalising the state, a document entitled A National Framework Towards the Professionalisation of the Public Sector. The notion that the public sector needs to be professionalised is itself an admission of the scale of South Africa’s governance mess; without that professionalism, the collapse of the country’s governance capacity will continue.
For any hope of ‘professionalisation’, the political capture of the country’s institutions has to stop. Since the late 1990s, this capture has been the unabashed goal of the ANC under the heading of cadre deployment. This was illegal and counter-constitutional from the get-go, but also an axiom of ANC governance. And it was particularly corrosive. Brian Pottinger, one-time editor of The Sunday Times, remarked of the practice: ‘Hardly had the edifice been crafted than it began to crack, as it inevitably would. The reasons were simple. The ANC did not have the skills base to control its own party efficiently, let alone the nation. Secondly, the deployment of inexperienced party figures into public-service offices led to a diminution of the offices themselves.’
Given the state of the ANC – an organisation that has been delinquent in its tax obligations and struggles to pay its staff – this has a renewed resonance.
So, it is eminently positive that the Framework calls directly for the abandonment of cadre deployment. It calls cadre deployment by its name, leaving no doubt as to what it is referring to. For the state to function, the party must relinquish the chokehold that it has exercised for over two decades. This is quite extraordinary for an official document. That it was approved by the Cabinet is equally so.
Then there was the Medium-Term Budget Policy Statement. There were a few intriguing points to note. One is that the government seems to be sticking to a wage offer of 3%. This was never going to be happily received by the unions – not least the ANC’s own allies – yet here we are, for the moment anyway.
Another, possibly more important, element was Minister Godongwana’s comments on procurement: ‘I must add the Constitution of the Republic of South Africa says it is the organ of state that procures. Every organ of state must have its own procurement policy, not be getting permission now and again from Treasury. We are giving you that authority, each organ of state to have its own procurement policies. No one will then say if I don’t deliver on time I’m delayed by Treasury.’
What he seemed to be signaling is that state bodies are not bound to a one-size-fits-all formula in procurement, and that they have the latitude to adopt procurement regimes that make economic sense rather than fulfilling collateral (and sometimes overtly ideological) objectives. One might even say that there is the implication that they should do so. And at issue here is the vexed question of preferential procurement – BEE policies in other words.
BEE has been a pillar of official policy thinking – not dissimilar from cadre deployment, although BEE was at least lawfully adopted. Its abuse is a matter of record, most recently in the report of the Zondo Commission. And while its defenders might try to make the case that the problem was not with the policy but with its misapplication, the Commission pointed to the ‘inevitable tension’ between the extension of preferences to the policy’s beneficiaries and the imperative of getting value for money for the public in the state’s spend.
Given the dire state of South Africa’s public finances, this is an increasingly urgent and unavoidable issue. And it appears that the Minister was holding the door open to go for value for money.
Meanwhile, Mteto Nyati, newly-appointed member of Eskom’s board, said in a hard-hitting interview that procurement and employment policies need to be rethought. Here again, there is some surprisingly forthright criticism.
Thus, he remarked: ‘Procurement rules are not as agile as they should be, including rules which say you cannot use suppliers that are not local. When the supplier of equipment is an international company … you have to use middlemen to satisfy the localisation rule. There’s no place for those kinds of practices now. We need to remove costs from the equation. We need to make sure we are connecting directly with the people who have the knowledge that will get us out of this crisis as soon as possible’.
He added: ‘These policies will need to be reviewed and changed where appropriate. The other area where we can help is around skills, and having rigid rules in place around who to employ in terms of equity targets. Right now we need to be focusing on who is the best person for the job, because those are the ones who should be fixing what needs to be fixed, regardless of how they look.’
That’s also quite extraordinary. To have these sentiments even expressed in public – by a board member of a State-Owned Enterprise, no less – says something about the extent to which South Africa’s Overton Window has opened. But then, the stakes involved in the Eskom imbroglio are extremely high.
Just for perspective, in 2018, then Minister of Trade and Industry Rob Davies said on the sidelines of a summit with European investors that ‘localisation is not something we will be able to renounce. Nor are we going to be able to renounce BEE’. These were prime concerns for those who had sunk money into the country, and prime disincentives for those who might consider it.
So, all of this could hint at some sort of change. Or rather that there is a shift in the Zeitgeist that could open the door to change. I hasten to add that we’re not talking about a change of heart, or an abandonment of ideology. These remain firmly entrenched. What we may be witnessing, though, is a pragmatic concession to reality. Reluctant, half-hearted, and probably loaded with hoped-for conditions. But a concession nonetheless.
It wouldn’t be without precedent. Think back to 1990. And it’s worth remembering that when former President De Klerk acted, there was a lot of finger-wagging that he acted out of pragmatism, not conviction. Well, as far as I’m concerned motivation is very much secondary to the action. I was glad he did what he did, and I’d be glad if the ANC would countenance some real reforms.
Nor, unfortunately, would walking back from a reform course be without precedent. Since the 1990s, the possibility of a more flexible labour market has been floated again and again. That has never really come to fruition. The New Dawn that President Ramaphosa supposedly rang in has been another caution against excessive optimism.
Indeed, as tantalising prospects of reform appear, we see the Expropriation Bill and amendments to the Employment Equity Bill awaiting the President’s signature. Neither will be propitious for growth. Quite the contrary, it seems to me. And following hot on the heels of Nyati’s comments, the Eskom Board pledged its ongoing commitment to racial empowerment and localisation. Davies’ emphatic words may yet be prophetic. This is hardly good news, although it’s useful to note that as societies descend into crisis, their institutions become increasingly inchoate. It takes time for entrenched assumptions to dissipate and for vested interests to be reoriented.
Am I optimistic? Not really. Am I sceptical? Certainly. But I am interested. I am intrigued. As I’ve said many times before in many contexts, I will be watching this very closely.