Analyst JP Landman of Nedbank Private Wealth, said in November that President Cyril Ramaphosa “set himself two tasks: rebuild the ethical foundations of the state [reclaim it from state capture] and revitalise the economy.”
In his seventh month in office, Landman wrote, Ramaphosa announced an economic recovery package of 25 actions. “In our evaluation 11 of these have been done; five are in process; three have not been done [all three to do with extra money]; and on six we could not obtain hard data.
So not too bad.”
But Intellidex’s Peter Attard Montalto took a much more pessimistic view in his December tracker: “A lack of a large enough team of effective implementers or communicators around the President is meaning that what slow positive change is occurring is getting rapidly lost.
Similarly, negative reforms and delays continue to glue business sentiment to the ground. Loadshedding is similarly obscuring the slow progress [indeed offsetting it] whilst questions over the future of SOEs and the crisis around both SAA and Eskom and fiscal worries are similarly dampening the mood as attention focuses on the downgrade to come next year if progress continues to fall short.”
“Overall it seems not only is Ramaphoria dead [it was never alive] but the long arc of reform potential is being lost in the discourse. It is for precisely this reason that we have always argued reforms needed to be much faster. All this is causing business to increasingly give government and the president short shrift on social compacting navel gazing.”
This is all rather downbeat, but in recent events, specifically SAA’s really hard economic landing into business rescue, probably a short stepping stone to full liquidation, where we arguably see treasury finally managing to hold the line. This far and no further.
SAA came up with its own restructuring plan where about one-fifth of its jobs would go. Union Numsa did not like it and went on strike.
Unusually perhaps, since we are talking of the national carrier, and public enterprises minister Pravin Gordhan appealed for patriotic ticket buying, many South Africans saw the opportunity to help get rid of an expensive fiscal item, and declined.
Booking agents, corporates and insurers pulled out, taking SAA’s financial position from acute to chronic. Numsa, having sort-of secured a wage increase of 5.9% after an eight-day strike, lined up with Solidarity to put SAA into business rescue. Government as the shareholder, and the SAA board, beat them to it, applying to a court for business rescue, essentially as protection against themselves, as they will no longer run the airline.
We do not know the outcome at this stage. Will a pot replace the sieve? If it is a pot how big will it be? Or will the sieve go completely?