An opportunity missed

That there was no core theme or thrust was telling of just how vacant Zuma is as a leader and of whether he should continue leading the nation until 2019.

Just like many of his other speeches of the past, his latest did not project the president as a man in charge of his country, as one who grasps the pain felt by many South Africans due to the economic decline, the drought, unemployment and persistent poverty.

The events preceding the delivery of this particular address heightened the expectations of many – perhaps now the man would be repentant. Perhaps now he would use the speech to set the country on a new course.

Just two days earlier was the Constitutional Court challenge, mounted by the Economic Freedom Fighters. It has already succeeded in forcing Zuma to recognise the validity of the public protector’s findings on the non-security upgrades at Nkandla after running away from taking responsibility for these upgrades for the past two years, despite the personal benefits gained.

Zuma’s dramatic announcement ahead of the court hearing that he was willing to pay back some money and his proposal that the National Treasury and Auditor-General should determine the amount took many people by surprise.

Whether this was a heartfelt commitment is doubtful – it is not consistent with his character. Possibly it was a ploy to forestall further damage to his image at the Constitutional Court.

A declaration from the court forcing the president to comply with the public protector’s findings would unmask Zuma as a leader with little respect for the constitution or the institutions that support it.

Apart from the Nkandla issue, which has damaged the credibility of the ruling party in particular, and government in general, there were other grim developments that hung like a cloud over Zuma ahead of Thursday night’s speech.

Chief among these was the dismissal of finance minister Nhlanhla Nene in December that sent the rand plummeting downward, further accentuating policy uncertainties and heightening the prospects of a sub-investment downgrade by credit rating agencies.

Such a downgrade, which appears likely, will raise borrowing costs, worsen the country’s debt situation, induce capital outflows and place the country on recession alert. This will make the employment outlook even bleaker.

Against this gloomy background, much was needed from Zuma’s state of the nation address.

But instead of animating the nation about the future, the president devoted a considerable amount of time to passionately invoking history and rekindling the raw issue of racism. This was clearly intended to use the genuine pain of black South Africans for narrow political ends and to deflect attention from government’s abject failure to manage the economy.

The large space allotted to history gave the impression of a president seeking to stoke nationalistic passions to make up for a lack of substance and direction on the economy.

While Zuma highlighted the importance of a fast growing economy as a necessary condition for broadening the tax base, increasing the social wage and providing free basic services, there was little that was fresh in the framing of this issue or on the concrete steps that government needs to take to tackle it.

Since 2010 there have been many dire warnings from international institutions, including the International Monetary Fund in their Article Four macro-economic assessment process, the World Bank economic updates and the periodic surveys of the Organisation for Economic Co-operation and Development.

These have all, in different ways, flagged the risks for social instability if the socio-economic challenges of today are not attended to.

They have also stressed the need for the South African government to undertake bold structural reforms, check the country’s public debt levels, restructure state-owned enterprises, deal with rigidity in labour and product markets, support small and medium enterprises, and improve the overall competitiveness of the economy.

For Zuma to regurgitate what has been known for half a decade about the economy without suggesting any credible action plan, signifies an overwhelming failure of leadership and an absence of fresh ideas.

Even Zuma’s analysis of what is wrong with our economy was an incomplete formulation. In his speech, as on many other occasions before, Zuma put the emphasis on the external environment, including the economic slowdown in emerging economies and weak commodity prices.

No acknowledgement was made of government’s policy failures in throttling the growth of the economy. But the reality is that policy uncertainty and hostility to the private sector has weakened the country’s investment climate, damaged tourism and discouraged investors from committing to South Africa for the long haul.

Failure to make an admission about policy failures and government weaknesses was a huge omission from Zuma’s reflections on the economy.

There was also not a word said about why Nene was fired, which clearly suggests Zuma still does not grasp the foolishness of this decision and the extent of the damage it has wrought on the economy.

He also made no mention of how South Africa was doing in its supposed campaign to position Nene for the Brics Bank or how this would benefit the country’s economy. So now we know, it was all presidential subterfuge. Indeed Zuma looked very weak and disconnected from the economy.

One would certainly have expected some serious attention being given to the mining sector – something particularly important for the Eastern Cape which historically has been a source of labour and remittances.

Since 2012 the mining sector has shed 47000 jobs nationally and it is currently going through a painful restructuring process that will result in yet more job losses and aggravate social tensions. But little was forthcoming from the president.

Still on the economy, measures such as creating a one-stop shop for foreign investors – as announced by Zuma – may look good on the surface, but these are unlikely to improve the country’s competitiveness if no fundamental shifts in policy are made to improve conditions for doing business. One-stop shops that are successful are underpinned by transparent policies built on the idea that a country is open for business, that entrepreneurs are supported and that government champions foreign invest ment.

Yet less than two months ago, in December, Zuma signed into law the Promotion and Protection of Invest- ment Bill, which requires foreign investors to jump many hurdles before they can operate in South Africa.

Finally, on the subject of cutting waste in government, the president importantly reinforced the importance of this and underlined actions to be taken. However, it is not clear what the targeted savings are going to be.

It should also be remembered that it was the former and now current Minister of Finance Pravin Gordhan who, in 2013 announced a slew of measures to reduce spending on official trips, conferences and entertainment by government departments. As such, there was nothing new in Zuma’s latest pronouncements. And even if they had been new, they were not the kind of big bang measures needed to restore health to our fiscus.

Even Zuma’s emphasis on the “urgency” on taking a decision to rationalise the two political capitals – Cape Town and Pretoria – to cut the expense of members of the executive and their staff having to commute is motivated less by fiscal reasoning than an urge to punish the Western Cape government.

Rationalising the two capitals is a necessary discussion, but one that needs cool heads and sound reasoning and a process that is phased in over time. In this regard one of the issues that must be considered is the broader economic impact of such a move and what measures will be put in place to limit possible socio-economic fallout.

Of more immediate importance than removing the legislature from Cape Town is the need to look at the size of government, including the provincial governments and the diplomatic missions abroad.

The cabinet can be reduced significantly. With 35 ministers and 38 deputy ministers, plus the president and his deputy, it totals 75. Our cabinet is corpulent in comparison with the rest of the Brics countries (Brazil, Russia, India and China) which have a far bigger GDP and deeper social problems.

The state council of China for example, has 25 members, which sits at 34 if the nine politburo members are counted. Brazil has 28 ministers, with an additional 13 members from various secretariats, notching a total of 41. Russia has a total of 31. India has 26 cabinet ministers – 65 if junior ministers are included.

South Africa’s bulky public service is further overlaid by a diplomatic presence that spans 124 countries, draining over R5-billion from the fiscus.

If Zuma had any grasp of what was at stake he would have made dramatic and massive cuts to government as a signal that it was no longer going to be business as usual.

In this way, it would have been far easier for the rest of South African society and the business community to play their part in contributing more taxes and implementing initiatives that support government’s efforts to revitalise the economy.

The state of the nation address was a false start and missed an opportunity to offer hope for economic and social renewal. What is left now is to ponder whether Zuma is fit to lead the country until 2019.

Mzukisi Qobo is associate professor at the Pan-African Institute, University of Johannesburg