An open letter to the President, Cyril Ramaphosa

 

Mr President

South Africa is on the verge of total socio-economic collapse. Nonetheless, foreign capital (in abundance) sits patiently at our borders waiting to invest—waiting for certainty to replace the clutter and chaos of political and economic disarray that currently permeates this beautiful country.  

We South Africans are also waiting.  We want common purpose, we want economic dignity and we want our national pride back. 

We need fundamental change, before it’s too late.

Your up-coming conference is an ideal time to introduce these changes. Present us with a clear vision at the next State of the Nation Address – a new way for things to be done around here, in our future, prosperous South Africa.

Here are my ten suggestions:

1. Cabinet: Re-constitute cabinet portfolios and ministries to reflect the new underlying drivers of our socio-economic renewal. Start with a clean page, clearly define the political roles and boundaries, listen to the future, appoint experience and merit, not popularity nor connections. Insist on it.

2. State Departments and State Owned Enterprises: Give real executive authority to duly appointed and experienced Directors General - they are the CEO’s of government departments. Agree explicit mandates and time frames, define courses, prescribe checkpoints, implement outcome based incentive schemes. Then get out of their way if they stick to the deal and replace them if they don’t. Re-constitute SOE Boards with industry experience and leadership. Independent, not politically aligned Chairpersons. These boards only need a minority of government representatives, but those should be armed with sufficient veto rights on matters of (pre-agreed) policy.

3. Foreign Direct Investment: Exempt all foreign direct investment from the prescriptions of the Public Finance Management Act which fall outside internationally accepted investment practices.

4. Public-Private-Partnerships: Pass legislation to enable and govern the formation of public-private partnerships. Allow for industry/entity specifics to prescribe structure, whilst preserving the roles/rights of the State, as may be necessary or appropriate.

5. Justice: Require and enable fast-tracking within the judicial process, through delegating certain final and binding authority levels to lower courts, without higher recourse. Adopt a policy of zero tolerance for incompetence or purposeful delays in the execution of justice.

6. Municipalities: Devolve certain decision making, capital funding authority and contractual capacity to municipal level to fast-track local needs. Do this in partnership with specialist operators and capital providers. Likewise for provinces.

7. Prioritise infrastructure projects: Allocate capital and expertise to the projects that will most enable our local economic growth and increase our export earnings. Obvious examples include ESKOM (energy more broadly) – cancel the debt, raise capital for new forms of energy – make electricity free (you’ll get it back in taxes); PRASA – our economic arteries have to function, efficiencies of rail over road are obvious, for people and cargo transport; LANDBANK – re-constitute functional, affordable, broad base access to reasonably priced, tailored term finance, which is essential for local food security and will enable vast international market opportunities … the list is long. Long term structural change must also be tabled for education, health care, personal safety, water security … another long list.

8. Social development: Change the focus, over a responsible period of time, away from social rescue and relief and towards development. The sooner and the more we invest in our youth, the less we’ll need to support them in old age. Move on from the notion that a nation made dependent will continue to vote for you, it won't.

9. BEE: Discard the BEE constructs that favour elite selection and enrichment. Move away from high level transfers of un-earned wealth towards bottom-up economic participation – jobs instead of shares. Impose transfers of knowledge and opportunity, not money. Capital ownership will follow as a natural consequence of outcome base deals between employees and capital providers. Create a new economic order rather than simply including more people in the old, divisive class of the obvious elite.

10. The State: Bring the full force of the State to create an exciting investment environment, which screams “Welcome to South Africa!”, to foreign and local capital. Use the full capacities of SARS, SARB, all state and developmental funding agencies, trade and industry, to make obvious the ease of doing business here – a Minister of Investment, perhaps? Simplify tax, do away with all taxes other than VAT, using differential and zero rating to balance the budget and cater for the needs of the poor.

For any of this to realistically be achieved in the short time we have will require our best women and men to be tasked and released to deliver it. They are all here, Mr. President, but they are not all in position. Appoint them. 

Make these changes, Mr. President, and we will rise from the ashes that otherwise await us. It will likely require a majority in Parliament – I would expect the right coalition to naturally emerge, driven by the common sense of it all. We want to move on from the past and embrace a better future.

We’d better get started, before the hour is too late. 

Respectfully. 

Mark Barnes

Barnes is a successful merchant banker and a wannabe postman.