By Pali Lehohla
JOHANNESBURG – South Africans are not short of ideas. During times of panic they rise to the occasion.
Except that they do so as though it is a momentary dance for a song. We witnessed this in the past.
The rise to democracy raised hope and was accompanied by major strides of South Africa as a destination and a citadel of hope yet this sadly could not be sustained.
We also witnessed in the 2010 World Cup how South Africa rose to the occasion as a good host, although as a competitor a lot was left to be desired.
Again here the forlorn song of nostalgia for the 2010 remains fossilized in our fault lines.
Four years ago we witnessed resistance to state capture and how that culminated into the Zondo Commission.
But with the pandemic, South Africans have gone into overdrive on corruption, also cursing it. What is very significant though this time around is that for the first time, business in the name of Business For South Africa (B4SA) has come up with a document which from its impact statement cannot be ignored and should not be ignored.
Trevor Manuel raised a profound concern that we know the price tag of what we pay, but we do not ever care to ascertain the value of what we pay for.
The document of B4SA raises the all important targets and value of what we buy. This is projected over the ten year period against a detailed list of the price tag of inputs.
This should resonate well with Finance Minister Tito Mboweni’s stated intention contained in the August 2019 National Treasury Paper titled: Economic Transformation, Inclusive Growth And Competitiveness.
In the paper Mboweni specifically implores our attention to “Quantifying the impact of the proposed growth reforms”.
B4SA in their document “A New Inclusive Economic Future” addresses the impact of their intended actions.
They contend that their development strategy and interventions will achieve an economic growth of 5.2 percent per annum, create 6-8 million jobs, reduce unemployment by 50 percent to 15 percent and reduce inequality by 0.26 percentage points from a Gini coefficient of 0.69 to that of 0.43.
In their medical arsenal, they also have a vaccine for the dreaded Treasury disease of debt to gross domestic product (GDP)ratio.
As regards this, they will in the ten years reduce this plague to 60 percent of GDP. The document, however, received criticism from many commentators.
Economists Thabi Leoka and Isaah Mhlanga were the most vocal. Leoka argued that there was nothing new that B4SA were raising as all that they raised was already contained in the Treasury document.
Mhlanga argued why South Africa was always obsessed with looking for what else is not in there instead of working with what is already there. In that way you could add, but also discard that which does not work, he concluded.
In fairness to B4SA, the criticism by Leoka and Mhlanga is rather harsh.
This is in that the criticism does not attach value in what the Treasury document pointed out to on articulating and “Quantifying the impact of the proposed growth reforms”, which is a point B4SA so elegantly paid attention to.
Secondly, in their criticism they did not compare the vast difference in both the number of indicators and the quantum of difference between comparable indicators of B4SA and Treasury’s impact proposals.
For instance, Treasury’s targets are a mere 2.3 percent annual GDP growth and a pithy one million jobs created in the ten year period. Treasury’s paper is silent on inequality and debt-to-GDP ratio.
Ignoring this and suggesting that the Treasury paper had already covered the field without critiquing Treasury’s impact assessment of their own interventions cannot represent good scholarship and practice.
This is especially when these results of Treasury’s intervention cannot address the scourge of unemployment, inequality and poverty while B4SA is unequivocal on their targets on this score.
Their silence on targets, in particular those of Treasury, suggests that they have paid scant attention even to the document of Treasury.
If they did, they would have realised that that paper is a road to extinction.
In fact, not much has changed from the paper even in the context of the Coronavirus.
Save to point out from the latter consortium paper using the Social Accounting Matrix (SAM) on how bad things will be and the need for austerity. By the way the SAM is an accounting framework not too well suited for looking ahead, but looking backwards on what has just happened.
Perhaps the important question to ask B4SA‘s intervention is rather this: What is the roadmap and the attendant science through which they address the reform issues raised in the Treasury paper that enable them to achieve such vastly different impacts compared to the pithy targets which the Treasury gets?
At least the Treasury used the Computable Generalized Equilibrium Model to come to their low projections.
What was it that is a blind spot on the Treasury tools, which is so glorious in the B4SA?
Ivan Fellegi, the Chief Statistician-Emeritus of Canada, has important advice for anyone attempting to transform systems.
He argues that, “Whenever I said that we need to do something, I never preached about it because that is useless. Exhortation doesn’t get you anywhere …one has to dream up techniques or tools or prods that make people behave the way you hope they would behave.”
Unfortunately for South Africa, it is these policy techniques, tools and or prods, including human competencies, that the government so lacks to plan policy implementation and pre-audit its outcomes.
How else could we account for Treasury’s paper with hopeless targets whizzing through the ANC, the National Planning Commission, the DGs forum, Cabinet and ultimately, Parliament, during the Medium-Term Budget Policy Statement (MTBPS) in October 2019?
Even the pleas and protestations of Professor Ben Turok, a man who was 30 days to his grave, could not be heard. Perhaps the pangolin and the bat will be heard.
Dr Pali Lehohla is the former Statistician-General of South Africa and the former head of Statistics South Africa. Meet him at www.pie.org.za.