by Russell Pollitt SJ
There was little dramatic intervention revealed in the Medium-Term Budget Policy Statement (MTBPS) delivered by Finance Minister Pravin Gordhan a few days ago. It is no secret that South Africa finds itself in trying economic times. The global economy, the regional economy, drought and local politics are all contributing factors. The 2016 growth forecast for Sub-Saharan Africa has been revised from 3% to 1.4%. Big oil producers like Angola and Nigeria have been hard hit by this. He tried to be practical and satisfy stakeholders across the board, no easy task.
South Africa’s growth rate has been revised from 0.9% to 0.5%. Private investment has fallen across all sectors and capital formation is expected to decrease for the first time since 2010. Low confidence is one of the biggest obstacles to growth.
Delivering the MTBPS was never going to be easy. Gordhan was always going to have to make tough decisions because of the lower tax revenue collection, slow growth and the need to try and deal with the crisis in higher education. Moments before he delivered his speech, the Finance Minister went out onto the streets to listen to protesting students – more than any other government official has done in the last few weeks. Solving the question of free higher education, we have to face, is not going to happen anytime soon. While Gordhan was announcing his plans for funding higher education, ironically, police and students clashed outside Parliament.
Gordhan also moved the question of the controversial nuclear power deal into the hands of Eskom. He suggested that there would be closer monitoring of SAA, Post Office and SANRAL amongst State Owned Enterprises (SOE’s). There does, however, seem to be little political will to act on the money-gobbling individuals who run them – despite the Minister’s best efforts.
The Minister, speaking to journalists, said that economic growth will only improve if South Africa inspires “the right kind of political context, economic stability, policy certainty and the right collaborative and partnership approach”.
These all, right now, seem to put the Minister of Finance between a rock and a hard place. Does the Government, at this time, with the current leadership, have the ability to even begin creating the right political context, economic stability, policy certainty and develop right collaborative and partnership approaches to deal with the country’s ailing economy and growing unemployment?
Quoting Pope Francis in his address Gordhan said: “Human rights are not only violated by terrorism, repression or assassination, but also by unfair economic structures that create huge inequalities.” That, it seems, is key. Until those in leadership deal with the huge systemic inequalities that exist – instead of focusing on personal gain – one man alone will not be able to bring the desperate change the country needs.
Gordhan does seem to be the one man in South Africa, even though under immense pressure himself, willing to ask the difficult questions, engage the difficult people and come up with answers – however unsatisfying to some – that at least aren’t fluff. In other words: exercises in empty rhetoric and grandstanding for personal gain.