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If the coming election is to help improve the lives of all South Africans, all political parties have a responsibility to put forward clear, evidence-based policies that can be rationally debated, compared and implemented.
South Africans need to be able to make informed decisions based on social and economic realities, not on rhetoric and fearmongering that can be tweeted for short-term political gain.
No matter the ideology or political and economic theories, unless government programmes are underpinned by affordable, practical and sustainable policies, election promises will remain just that – promises.
South Africa cannot afford empty rhetoric, policy uncertainty, maladministration and corruption.
Last year, financial services employed a total of 158 000 people, banked 80% of adult South Africans, paid 30% of all company tax (more than R74 billion), and spent another R5 billion on social responsibility and skills development programmes.
We need South Africa to succeed.
But the economy is in a precarious state and it is estimated that low growth of less than 2% will continue in the next few years. It will remain stagnant until South Africa decisively tackles policy uncertainty and the crisis in state-owned enterprises (SOEs).
This cannot wait until after the election. Eskom and its financial crisis are a real and present danger to the economy, which threatens industries, jobs and the sustainability of the fiscus.
The damage has already been done; what is required now is a willingness to make hard decisions, which will most likely include electricity price hikes and recapitalisation, among other unpopular measures, and see them through in the years ahead.
A clear commitment to restructuring Eskom, increasing productivity and reducing its costs and debt is an important signal, but the state corporation must be decisively dealt with in the coming budget.
Beyond this, we expect the budget to be relatively low-key – with no economic expansion or fiscal space, all government can do is work to consistently improve the policy and regulatory environment, and ensure efficient and honest utilisation of the human and financial resources at its disposal.
Banks stand ready to assist with resources and expertise to help SOEs, which have a huge asset base that can be used to stimulate economic growth.
However, banks too often find that their attempts to assist are met by expectations of a “blank cheque”. Financial institutions hold the savings and investments of the nation in trust.
We cannot be asked to lend the savings of workers and businesses to loss-making, corrupted or badly managed SOEs, or any ill-conceived projects.
Therefore, we oppose the notion of prescribed assets, which may impede our ability to invest our customers’ savings to get the best return.
SOEs that have no clear purpose or mandate must be phased out, those with overlapping mandates rationalised and those that have good governance, management and a sustainable business case should be opened to investment from the private sector.
The Banking Association of SA (Basa) is unequivocal that the cancer of corruption in almost every corner of the state has seen South Africa’s prospects for economic growth diminish and large amounts of vital resources to uplift the majority of South Africans stolen.
A number of businesses and individuals in the private sector and other spheres of civil society have also been drawn into this vortex. As Basa, we have been clear that, where our members are in contravention of the law, they must face the consequences.
Unless South Africa’s leaders move fast to tackle the problems at the root of the country’s economic crisis – not “challenges”, not “constraints” or any other euphemism – we will continue to face the dire consequences of unemployment, poverty and inequality.
The spectre of credit rating downgrades and a bailout from the International Monetary Fund or World Bank can’t be ruled out if we don’t tackle our problems.
Those who have received a bailout from these global institutions warn that there are few things as humiliating for a country as being told to sit down and listen to what you can – or cannot – spend your money on.
South Africa needs leaders who can make the public service and local government responsive, accountable and skilled.
Despite the public sector wage bill becoming increasingly unaffordable, South Africa’s greatest malaise remains its inability to implement its laudable policies.
Promises to fast-track the release of broadcast spectrum, easing visa requirements for skills and tourism, and even something as basic as the provision of proper sanitation at schools simply take too long to implement.
South Africa needs leaders who will be consistent in protecting the mandate and independence of the SA Reserve Bank. While monetary policy is important for job creation and economic growth, it is not the only factor.
Other critical factors include policies that attract investment and social development policies, like an effective education system and a workable, sustainable land reform programme, which will include expropriation without compensation. These are the responsibility of government.
Ahead of the elections, we urge leaders to be aware that political rhetoric often has real and immediate economic consequences – for our currency on international markets, our credit ratings and our ability to attract investment.
Reckless rhetoric is bad for the businesses that create jobs and contribute to the taxes that pay for social security and other development programmes.
We ask them to be wary of making promises too easily as they are dangerous in communities riven by unemployment, poverty and inequality.
When promises fail to materialise into real benefit, they can lead to anger, social instability and violence.
Proclamations and manifestos in themselves will not change the lives of South Africans.
What is required is action to increase our competitiveness, rebuild local government, and create an effective and responsive public service.
We cannot afford another five years of empty promises.
Coovadia is the managing director of Basa. This is an edited version of a presentation to the general council of the SA National Editors’ Forum
