A Mandela Day of reckoning
Last Monday, our firm, like so many other businesses in South Africa, celebrated Mandela Day, a tribute to the country’s revered former leader and distinguished international statesman.
I chose to sit this one out. Not because I didn’t admire the great man, but rather because I couldn’t rekindle the hope and joy we experienced in the nineties. Back then, we had a country that was the toast of the world, with a head of state whose principles and values set new standards that other governments wanted to emulate.
The economic prospects of the country’s Rainbow Nation were limitless. Businesses around the globe scampered to invest in and trade with us.
A quarter of a century later, the dream of being the torchbearer of a revitalised African continent lies in tatters, sullied by lawlessness. We have an administration that put self-enrichment ahead of fighting crime, caring for its people, and delivering services vital for the functioning of a thriving economy.
The signs of financial and moral decay have been evident for ages. It’s not something that materialised overnight.
Fearing that opposing the rot in our system would elicit a political backlash or meddle with our comfortable lives, we pretended it didn’t exist.
We recoiled into the sanctuary of our homes and holiday retreats, hoping that when we resurfaced, the mess would somehow have disappeared. The outcome of our inaction is now clear for us to see.
South Africa is facing immense political, social, and economic problems that aren’t self-healing, and unless we tackle these realities, we stand to squander everything we and our forebears have built over generations.
The good news, though, is that members of the ruling party are finally accepting their failure to deal with issues ranging from unemployment and poverty to inequality and lawlessness.
In a rare admission last week, former president Thabo Mbeki, talking at a memorial service for African National Congress Deputy Secretary-General Jessie Duarte, rebuked the current administration for its poor performance. He said he feared that this could spark violent protests similar to the Arab Spring.
Finance Minister Enoch Godongwana, speaking at a municipality summit in the Eastern Cape recently, was even more brutal in his attack on municipal leaders. He accused them not only of mismanaging their budgets, but also of lacking the technical skills to maintain critical infrastructure.
Factories and small businesses were closing because they couldn’t rely on the timely delivery of electricity and water. The rule of law was crumbling because police stations were understaffed and under resourced. And hospitals that couldn’t afford to hire nurses and doctors were stretched to breaking point.
Our private sector is well known for its resilience and ability to work around a multitude of challenges brought about by the administration’s ineptitude. However, even so, the government’s ongoing failure to invest in basic services and infrastructure is taking its toll on economic growth.
In their recent results, mining companies Exxaro, Thungela, and Kumba reported that they had been forced to cut production in buoyant markets because of the state’s dysfunctional railway network.
And last Thursday, the governor of the Reserve Bank, in a sombre mood, forecast that gross domestic product in 2023 and 2024 would be a miserly 1.3% and 1.4% respectively, considerably lower than previous projections.
Though higher oil and food prices are a worldwide worry, South Africa has had to deal with the additional constraints of falling commodity prices, elevated electricity tariffs, and increasing public-sector wage demands.
The world economy has endured a harrowing six months. Our nerves are frayed. Yet, history has taught us that downturns are seldom, if ever, long-lasting, and like all other previous crises, this too will pass. Signs are appearing that sentiment is changing for the better, but financial markets remain on edge. Only when investors are confident that inflation has peaked and that interest rates in the United States have reached levels that won’t restrain growth, will equity, bond, and property markets turn up.
Comedian Jackie Mason always joked how people whispered when conveying bad news. For too long now, we’ve spoken in a murmur about our government’s inadequacies.
Conditions globally will start improving soon, but if we want this country to keep pace with the rest of the world, it’s time we raised our voices.
- David Shapiro is a veteran stockbroker, market commentator, and deputy chairperson of Sasfin Securities.