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  • Writer's pictureAndile Khumalo

Decisive Moments at which Ramaphosa Must Not Yield

Over the past week, SA has found itself plunged into a chaotic civil war involving economics, statistics and politics. First, another CEO of a bankrupt state enterprise resigned. In his letter, Vuyani Jarana made it clear that the forced intersection between politics and governance has not only paralysed SAA but will continue to do so unless drastic reforms are initiated.

A week earlier, the Eskom CEO also tendered his resignation, and though the issues that led to his exit were not as well articulated as Jarana's, the parallels are well known: high debt levels, poor revenue streams and cost structures that cannot be altered without the blessing of politicians and unions. Such a mixture of constraints - particularly for SAA, which has serious competition - requires the type of operational autonomy and strategic flexibility that is denied to the CEOs of state-owned enterprises (SOEs).

To compound the national misery, Stats SA released GDP figures that showed a quarterly decline of 3.2% in economic activity. Such a decline, the highest in a decade and coming soon after the release of depressing employment data, provided the most acute indication of the prevailing economic crisis.

Naturally, this requires fundamental economic and political solutions. But rather than adopting a line of march aimed at assuring citizens that there is indeed an understanding of the issues, the government plunged itself into a civil war reminiscent of the ANC's factional battles of 2017 when secretary-general Ace Magashule said an ANC lekgotla had resolved to nationalise the Reserve Bank, amend its mandate and initiate steps towards exploring quantitative easing.

For Cyril Ramaphosa, the problem is that he derives his political legitimacy from the ANC itself, so its resolutions - however impractical they may turn out to be - are regarded as key performance indicators by the party. Unilaterally disowning them is not on the cards for him.

This dilemma has led to a paralysis where his voice has been absent from the discourse. The vacuum was filled by market speculation, incoherent press releases and contradictory tweets.

While Ramaphosa battles with the dual responsibility of calming the ANC's internal ructions and fixing a state and an economy living with the consequences of the ANC's style of governance, he may do well to read about author Amanda Ripley's "survival arc". In assessing how leaders react to a disaster, Ripley refers to an arc that includes phases of denial, deliberation and decisive moments.

For far too long we have been in denial about the nature of the crisis. The cosmetic changes implemented - a jobs summit, adding the word "employment" to the ministry of labour - have done little to address the structural issues underpinning our stagnant economy.

In the deliberation phase, the nation at large needs to acknowledge that the prevailing paradigms under which such conversations have been contained - primarily the tense alliance between business, labour and the state - are no longer fit for purpose.

But it will be in the decisive moment that the fate of the country will be sealed. If Ramaphosa is able to leverage his skills to force all social partners to stomach the painful medicine and implement the right reforms, his legacy as a statesman will be elevated. If he continues yielding at the decisive moment, allowing his in-house opponents and their allies to break down the remaining barriers of accountability and autonomy at the Reserve Bank in particular, and the unions to dictate the fate of SOEs, then ours is a doomed nation living at the mercy of the ANC's fractured factions.

This article first appeared in The Sunday Times on 9 June 2019.

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