Time’s up, the ship is sinking

It is said that when King Boabdil received the news of the fall of his city of Alama in 15th century Iberia (now Spain), he killed the messenger. The country’s reaction to Finance Minister Tito Mboweni’s medium-term budget policy speech was akin to Boabdil’s: some unions which are less ideologically inclined to the minister’s thinking would rather kill the messenger proverbially through making sure his ideas do not come to fruition.

What Mboweni did was what we’ve always been afraid to do: look in the mirror and see ourselves for what we are, warts and all.

It is no secret that Eskom has been a black hole through which billions have been wiped off the fiscus. Administration after administration has thrown good money after bad simply to keep the country’s lights on.

And because all the technocrats at the utility know how integral Eskom is to this country’s survival they have never run it profitably.

They have always known that however much money disappears through bad management and shady deals there is more where it came from.

When the suggestion is made that Eskom be privatised, the unions threaten the country with a blackout. What is really sad is that the said unions are the biggest opponents of institutions like the IMF and the World Bank lending money to struggling economies because “they are instruments through which the West take over African countries”.

By opposing the unbundling and privatisation of Eskom, unions are doing exactly what is required for South Africa to end up in bed with the IMF and the World Bank. No amount of leftist ideology will turn around Eskom. Only sound business practice, which is sorely lacking in state-owned enterprises, can do that.

How ironic that those ideologically opposes to IMF control are paving the way for such control through their day-to-day actions.

The last ratings agency to keep South Africa just above junk status, Moody’s, has issued a warning following the finance minister’s speech that South Africa “runs the material risk of not being able to arrest the deterioration of the country’s finances”.

It matters not whether the unions or political parties agree ideologically with the existence of ratings agencies or not. What matters is when those agencies have given their ratings, investors act in accordance with those ratings.

South Africa must avoid junk status by Moody’s because it will make economic recovery an impossible task.

The time has come for bold leadership for South Africa. The bloated civil service cannot continue as it is.

Difficult decisions have to be made now to avoid a situation where Eskom, SAA and others drain all the money and government cannot pay its employees.

The infuriating thing about South African leadership is that they are aware of what needs to be done.

The minister of finance put it plainly: the ship is sinking; we cannot wait anymore.

The business of endless bailouts to badly run SOEs has to stop. Ramaphosa knows what needs to be done. Will he do it or will he pander to the demands of those who supported his shaky rise to power in the ANC?

The country demands decisiveness on his part. He must make unpopular decisions now to stop things from becoming worse than they are.

Sydney Majoko.

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