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Road to Nasrec: A rapid, credible economic turnaround is possible, but...

2017-12-06 14:12

As the country anxiously awaits the outcome of the ANC elective conference in December, it remains to be seen whether the year ahead will usher in new leadership, and with it a possible change in direction for South Africa.

A panel of prominent South Africans from business, academia and the media convened at the Gordon Institute of Business Science to consider what 2018 may hold as political uncertainty and economic paralysis continue to grip the country.

State capture and the political year ahead

2017 has been a year of unprecedented revelations of corruption and state capture, and institutions in both the public and private sectors have suffered irreparable reputational damage.

Investigative journalist and author of The President’s Keepers, Jacques Pauw, told the forum that criminality had blossomed in South Africa under President Jacob Zuma.

The destruction of the capacity of law enforcement agencies to investigate has resulted in the shielding of criminality and a purge of dedicated civil servants. Pauw said it would take a long time to rebuild these institutions and improve the capacity at state institutions such as the South African Revenue Service, as well as political will to arrest those responsible for corruption.

“Our immediate future looks extremely bleak,” Pauw said. He believes that if Dr Nkosazana Dlamini-Zuma wins the ANC presidency at the elective conference in December “very little will change. It will be dire if she comes to power as she is relatively weak and is compromised.” With Dlamini-Zuma as ANC president, the country might enter into a nuclear deal “and then we are starting to look at corruption in the trillions,” he added.

Head of Goldman Sachs’ investment banking division for sub-Saharan Africa, Colin Coleman, said the ANC had created an organised shadow state, a network of patronage designed to keep the party in power.

Senior researcher at eNCA, Angelo Fick, said: “South Africa’s short term future is messy, awful and disastrous, but precisely the dynamics of a young country where the majority of people are under the age of 35.”

He said the national election in 2019 would be “the last grandstand of the old men in this country. So regardless of which faction wins in 2019, things in the medium term look very different” as the youth reach voting age.


The role of business

The state capture project has been enabled by organisations that were previously held in high regard, chief executive of IQbusiness, Adam Craker, told the forum.

“Audit and legal firms clearly overstepped the line. But this is not only a local issue and it would be foolish to think their actions are restricted to this region.”


Chairperson of Massmart, Kuseni Dlamini, said corruption was on an “industrial scale. We should all be ashamed that it happened in our midst.”

The past year has shown that when governance fails, it opens the way up for evil elements to manipulate state institutions and shareholder resources.

“We have to be wide awake every day in 2018. All of us must be activists against corruption and against wrong doing,” he added.

Dlamini said whistle blowers should not only be protected, but also rewarded for the work they do.


The judiciary, an independent media and civil society were the three pillars preventing South Africa’s descent into a gangster state, Pauw asserted. He added that business must become a fourth pillar by bringing wealth to ordinary people.

“It is the only thing that will save our country in the end. We cannot afford to sit still anymore and wait for something to happen.”

Coleman said the problem of structural inequality underlay our deepest problems and allowed state capture to exist. While Dlamini-Zuma’s vision of Radical Economic Transformation was to “redistribute the current pie,” Cyril Ramaphosa wanted to accelerate both growth and transformation.

“There is no transformation that can take place in a context of no growth,” Coleman said.

Leadership and a way forward

Ratings agencies are all underpinned by the principle of credible structural reforms and medium term economic growth prospects, Coleman explained.

He said the 90-day stay of execution granted to South Africa by Moody’s before downgrading the country’s local currency rating to sub-investment grade “hinges on political leadership choices in December and their policy positions.”

“We could have a rapid, credible economic turnaround. However a business-as-usual approach and a nuclear programme is a recipe for downgrade, it is entirely within our grasp. If we choose the right leadership, we can turn it around.”

Dlamini said he believed the country would “emerge from this year very strong, and enter 2018 in clean up mode.”

“The ANC knows the stakes are very high if it continues on the path of corruption. It has to decouple itself from the corruption narrative and regain the trust and confidence of the public.” He felt certain that the country would be in a better space by 2019, but that it would “require us all to engage with the issues that confront our country.”

“We need champions of an inclusive society, and prominent people to agitate for transformation. We need inspiring and inclusive leadership and must make the space for them to emerge. We must make South Africa the winning nation I believe it can and must be.”

City Press is a media partner of the Gibs forums.

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December 17 2017