GNU: The real work starts now

Amid the hope of a new government, we should not forget that the country is in deep crisis. What is required now is leadership and political maturity to keep the GNU intact, writes Ann Bernstein.

The government of national unity (GNU) could be a unique opportunity to turbo-boost reform and build a more prosperous and inclusive South Africa.

We now have a government which, on paper, believes in constitutionalism, the rule of law and an expanded role for the market in growing the economy and creating jobs. After so many wasted years, this is a development with enormous potential for our country.

However, amid the hope, we should not forget that the country is in deep crisis. The state is collapsing around us. Skilled people (black and white), firms and capital have left our shores in great numbers. We have world-beating unemployment and crime rates.

What is required now is leadership and political maturity to keep the GNU intact and, crucially, agree on a set of urgent priorities to deal with our country’s most pressing challenges. We cannot continue along the path that has led to economic stagnation, institutional decay and a catastrophic rise in poverty.

Bold catalytic action needed 

Since the beginning of the year, the Centre for Development and Enterprise (CDE) in collaboration with experts, business leaders, former public servants and academics, has been wrestling with the critical question facing South Africa: what can the new government do to get the country back on track after 15 years of decline?

If progress is to be made, a limited number of core priorities must define the GNU’s agenda during its first six months in office. A series of bold catalytic actions is required, driven by a clear vision, the right strategy, and effective leadership.

What all of us need — citizens, civil servants and investors — are bold signals that fundamental change is under way. These actions must reignite investor confidence, unleash pent-up energies in society and push South Africa on to a new path of increasing prosperity and new opportunities to get out of poverty.

In the CDE’s AGENDA 2024: Priorities for a new government initiative, we have selected five areas for action:

  • fixing the state;
  • freeing up markets and competition to enhance development;
  • building a new approach to mass inclusion;
  • tackling the fiscal crisis;
  • and strengthening the rule of law.

Rebuilding a capable state is a long haul. An important place to start is to streamline the centre of government so that it works more effectively. Operation Vulindlela should be strengthened and reconstituted as a delivery unit focused solely on the delivery of priority reforms; consideration should be given to bringing back the Mbeki-era Policy Coordination and Advisory Services (PCAS) unit in the Presidency with important roles, including making sure that proposals going to Cabinet have been thoroughly interrogated and costed.

Cadre deployment must go. It is vital that the best possible people are appointed to senior positions in public service and state-owned companies (SOCs). Wherever possible, senior officials in mission-critical positions should be asked to reapply for their posts and appointed only after rigorous recruitment processes.

Faster, market-driven economic growth is the only way of lifting millions out of poverty — as we have seen, for example, in India and China. South Africa requires a shift in attitudes and approach. The new government must focus on making the country a welcome place for investors, who have many other options.

Markets, competition and businesses can do so much more, whether it is in energy generation, the aviation industry, housing or logistics. Harnessing private sector capacity and capital for infrastructure is essential.

How can we incentivise employment? 

While government transfers to the poor are necessary when six out of 10 South Africans live in poverty, it is critical to recognise that the fastest route out of poverty is a job. South Africa’s current approach to poverty and inequality has demonstrably failed. Do we really want to be a country that boasts about the growing millions of people who depend on state welfare?

What we need is an economic strategy where mass inclusion is the central goal, not an afterthought. We should explore practical ways to incentivise employment at scale for low-skilled workers — the workforce we actually have. We should also redirect state funds away from ineffective government-driven small business programmes towards private sector-run initiatives and institutions to support black entrepreneurs.

The fiscal crisis continues to hold the country back. We have to restrain spending and not commit to unaffordable programmes, like the NHI and a basic income grant. The new government should redirect spending away from ineffective programmes that add little value and prioritise growth enhancing activities.

We need better value for money from state departments: health to education to policing. State-owned companies are a massive drain on the fiscus, which needs urgent remedy. Addressing the operational and commercial challenges of SOCs will require a radical rethinking of how the markets in which these companies operate will be structured.

The rule of law, including an independent judiciary, predictable and fair legal processes, as well as effective policing and prosecution capabilities, are vital for turning around the country’s economic performance and attracting increased investment, both locally and internationally. We have to stop a parasitic elite feasting on the state, and we must make communities safe. That means putting fear into criminals — at all levels in our society — that they will go to jail if they break the law.

Catalytic actions here include measures that strengthen the quality and independence of the judiciary, which requires reform of the Judicial Service Commission, and a renewed focus by law enforcement agencies on significantly reducing the murder rate. The National Prosecuting Authority has failed to hold powerful people to account and needs to become a wholly independent, reinvigorated institution. The Scorpions should be revived so that smart investigation and fearless prosecution work together.

Arresting South Africa’s devastating decline requires the GNU to act quickly and decisively. Half-hearted, half-baked reform will not change the country’s trajectory. The GNU needs to agree on significant and deepened economic and other reforms and then ensure speedy implementation wherever the capacity to do this can be found. So, while the dust may have settled  – for now – on the political front, the real work has only just begun.

– Ann Bernstein is the executive director of the CDE. This article draws on the CDE’s AGENDA 2024 project, which identifies urgent priority actions for the new government.

Article published by the News24

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