5 things South Africa urgently has to get right – and the clock is ticking

 ·13 Jun 2024

Once the seventh democratic government has been established, there are broadly five urgent priority areas that it needs to focus on in its first 180 days in office.

These include:

  1. Fixing the state;
  2. Driving growth and development by freeing up markets and competition;
  3. Building a new approach to mass inclusion;
  4. Dealing with the fiscal crisis; and
  5. Strengthening the rule of law.

This is according to independent policy research and advocacy organisation, the Centre for Development and Enterprise (CDE), who identified these priorities as part of a new project called ‘AGENDA 2024: Priorities for South Africa’s New Government’.

The CDE said that over the past six months, it has collaborated with experts, business leaders and others across society on identifying what a new government might do to address the country’s many crises.

Ann Bernstein, executive director of CDE, said at the launch of the project that “negotiating a new governing arrangement for South Africa should not just be about power, politics and positions.”

“These discussions need to go beyond what a new government will look like and include what this new government will do once in office.”

“The state is collapsing around us, with skills, firms and capital leaving our shores in great numbers – [thus] the parties negotiating a new governing arrangement need to agree on an urgent reform programme centred on dealing with the country’s most pressing challenges,” said Bernstein.

CDE executive director Ann Bernstein.

Below is a brief overview of the CDE’s findings:

Fix the state

The CDE said that fixing the state starts with a “reorganisation of the Cabinet and the Presidency, and getting the right people into the right positions at senior levels in the state.”

“The new President should resist the urge to create more positions than is required to ensure a stable coalition Cabinet,” said Bernstein.

This means a “Presidency with a smaller, fit-for-purpose Cabinet characterised by excellence and commitment to a deepened reform agenda,” she added.

Bernstein said that the state itself cannot be fixed in any way, shape or form “if we continue deploying people to senior public sector positions based on party loyalty instead of competence.”

The argument is that there is now an opportunity to ensure that the ‘most qualified candidates’ are appointed to senior positions in the public service and state-owned companies.

Drive growth and development by freeing up markets and competition

The second priority outlined “acknowledges the role that faster, market-driven, economic growth can play in lifting millions out of poverty.”

“South Africa needs to become a welcome place for investors, who have many other options. Markets, competition and businesses can do so much more in meeting South Africa’s challenges, whether it is in energy generation, the aviation industry or logistics,” said Bernstein.

This was echoed in an interview with Business Unity South Africa (BUSA) CEO Cas Coovadia, who said that BUSA’s preference is for a government “that promotes a free-market economy and recognises the importance of partnerships between the private sector and government.” 

Bernstein furthered on this, saying that “public-private partnerships are an important way to harness private sector capacity and capital for infrastructure, but they need a reliable state partner.”

“Investors need a capable, welcoming state that offers policy certainty and stops blocking private sector activities through over-regulation,” she added. 

Build a new approach to mass inclusion

The third priority “recognises that the country’s approach to transformation has failed,” and a new approach to tackle this generational challenge differently is desperately needed, said the CDE.

Bernstein said that the best route out of poverty is job creation, which ultimately requires a growing economy.

“But inclusion must not be an afterthought – we have a highly redistributive state that, when it works properly, helps the poor by providing quality services such as training, education, healthcare and transport,” said Bernstein.

“South Africa needs a new approach to mass empowerment that helps the poor instead of enriching the elite,” added the CDE executive director.

For this, the CDE says that the country needs to “incentivise low-skilled employment, which is South Africa’s most critical national challenge.”

Berstein calls for funds to be redirected from government to the private sector “to expand opportunities for black entrepreneurs.”

Deal with the fiscal crisis

The CDE said that South Africa’s economic decline cannot be reversed unless the country’s fiscal crisis is tackled.

Current and future predictions of South Africa’s debt-to-GDP ratio. Graph: EY

“Government needs to start living within its means and stop spending money it doesn’t have – we must not commit to unaffordable programmes like the [National Health Insurance] and a basic income grant, and we must moderate increases in average government remuneration,” said Bernstein.

The CDE argues that in context of tight fiscal constraints, government should redirect spending away from “failed or ineffective programmes,” and towards growth enhancing activities.

“This includes addressing the performance and financial viability of state-owned companies, and introducing best practice principles to fix the shortcomings of the procurement regime,” said Bernstein.

Strengthen the rule of law

The final priority outlined by the CDE involves strengthening the rule of law, “which has become severely eroded over the last 15 years,” it said.

“Not only do we have to stop a parasitic elite feasting on the state, we have to make communities safe. This means putting fear into criminals – at all levels in our society – that they will go to jail if they break the law,” said Bernstein.

Bernstein said that South Africa needs “to reform our criminal justice system by implementing measures that strengthen the quality and independence of the judiciary through reform of the Judicial Service Commission.”

“The NPA has failed to hold powerful people to account and needs reinvigoration and an infusion of excellent professionals and leadership, ” she added.

The call for strengthening the rule of law as a priority of the incoming administration has been echoed by business leaders, including Busisiwe Mavuso of Business Leadership South Africa.

“Business critically depends on the rule of law, without which it cannot commit substantial investment… the new administration must commit to bolstering the rest of the system, particularly the police and its investigating and intelligence units,” said Mavuso.

Going forward

“The political decision-makers at the negotiating table have a unique opportunity to change the course of the country for the better [by g]etting South Africa back on track has to be a story about markets and states, and how they can work together to perform miracles of upliftment,” said Bernstein.

“It must be a story of overcoming poverty and the routes out of it, of successful transformation, of the foundations for a successful democracy: sound finances and the rule of law [and] most importantly, it must be a story about leadership and how destructive it is to appoint the wrong people in key positions,” she added.

The CDE said that to stop the country’s “terminal decline requires a new approach for government,” where hard choices need to be made about people, policies and how best to get things done.

Read: Big shake-up for provinces in South Africa is coming

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