Priorities for South Africa’s new government in the first six months

Whatever shape the new government takes, it has to deliver some quick results.

Policy think-tank the Centre for Development and Enterprise (CDE) has identified five priority areas to arrest SA’s slide into chaos.

First, fix the state, starting with reorganising the cabinet and presidency and filling posts with the right people at senior levels. CDE executive director Ann Bernstein says one easy option is to trim the number of cabinet posts from 30 to 19.

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“We can’t get rid of cadre deployment in public service all at once, so let’s identify mission-critical jobs and ensure the best people fill them,” she adds.

The new president should resist the urge to create more positions than is required to ensure a stable coalition cabinet, with cabinet appointments decided on the basis of excellence and a commitment to reform.

“Negotiating a new governing arrangement for South Africa should not just be about power, politics and positions. These discussions need to go beyond what a new government will look like and include what this new government will do once in office,” says Bernstein.

“The state is collapsing around us, with skills, firms and capital leaving our shores in great numbers. The parties negotiating a new governing arrangement need to agree on an urgent reform programme centred on dealing with the country’s most pressing challenges.”

Bernstein was speaking on Wednesday at the launch of a new CDE project called Agenda 2024: Priorities for South Africa’s New Government.

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She says the five priority areas the government needs to focus on in its first 180 days in office are fixing the state, driving growth and development by freeing up markets and competition, building a new approach to mass inclusion, dealing with the fiscal crisis, and strengthening the rule of law.

“We cannot fix the state if we continue deploying people to senior public sector positions based on party loyalty instead of competence. There is an opportunity now to ensure that only the most qualified people are appointed to senior positions in the public service and state-owned companies.”

Drive growth

SA should take a leaf from the examples set by India and China in freeing up markets to accelerate economic growth as a way to create millions of jobs.

Public-private partnerships (PPPs) are a good way to attract private capital for the rebuilding of infrastructure, but they need a reliable and welcoming state partner that offers policy certainty and stops blocking private sector activities through over-regulation.

The second priority acknowledges the role that faster, market-driven economic growth can play in lifting millions out of poverty – as we have seen in India and China.

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“South Africa needs to become a welcome place for investors, who have many other options. Markets, competition and businesses can do so much more in meeting SA’s challenges, whether it is in energy generation, the aviation industry or logistics,” says Bernstein.

“Public-private partnerships are an important way to harness private sector capacity and capital for infrastructure, but they need a reliable state partner. Investors need a capable, welcoming state that offers policy certainty and stops blocking private sector activities through over-regulation.”

We need a new approach to mass inclusion

The existing approach to alleviating poverty has clearly failed, says Bernstein.

“Do we want to boast about the number of people on state support?”

The existing approach has made no dent on unemployment, now at about 33%, with youth unemployment approaching 70%.

“The best route out of poverty is job creation, and that requires a growing economy. But inclusion must not be an afterthought,” she says.

“We have a highly redistributive state that, when it works properly, helps the poor by providing quality services such as training, education, healthcare and transport.”

What’s needed is a new approach to mass empowerment that helps the poor instead of enriching the elite by incentivising low-skilled employment, which is SA’s most critical challenge. Funds need to be redirected from government to the private sector to expand opportunities for black entrepreneurs.

The fiscal crisis

None of the country’s economic challenges can be fixed without addressing a fiscal crisis caused by SA living way beyond its means and making populist promises that cannot be funded, such as the National Health Insurance (NHI) and universal basic income grant.

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Funds must be directed away from failed or ineffective programmes towards growth-enhancing activities. This includes addressing the performance and financial viability of state-owned companies and introducing best practice principles to fix the shortcomings of the procurement regime.

SA spends massively on education but for very poor outcomes, while public procurement legislation needs reform to curb wastage and fraud, a cost ultimately borne by taxpayers.

Strengthen the rule of law

The final priority involves strengthening the rule of law, which has become severely eroded over the last 15 years, says Bernstein.

The country needs to stop a parasitic elite feasting on the state while making communities safe.

“This means putting fear into criminals – at all levels in our society – that they will go to jail if they break the law.

“We need to reform our criminal justice system by implementing measures that strengthen the quality and independence of the judiciary through reform of the Judicial Service Commission. The NPA [National Prosecuting Authority] has failed to hold powerful people to account and needs reinvigoration and an infusion of excellent professionals and leadership.”

Among the laws that need amendment, Bernstein points to the NHI Act, which is unaffordable and will force many health professionals to leave the country; the Public Procurement Bill currently before parliament; and labour laws, which need to reflect the realities of a country with mass unemployment, especially among the youth.

Labour laws need to encourage firms to take on new employees, while government job programmes tend to be short-term.

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It needs to be easier to hire and fire staff. and collective bargaining agreements cannot be allowed to apply to those not party to those agreements.

“Arresting South Africa’s terminal decline requires a new approach for government,” says Bernstein.

“Hard choices must be made about people, about policies and about how best to get things done. Time is running out. The time for half-hearted and half-baked reform is over; the time for fundamental change is here.”

This article was republished from Moneyweb. Read the original here