ON OR about the evening of November 23 last year, a large group of protesters approached a house near the wall of the De Hoop Dam near Steelpoort, on the border between Limpopo and Mpumalanga.
The dam, the only one built from scratch since 1994, is the 13th-largest in the country. Full, it contains about 350-million cubic metres and was built to supply bulk water to nearby mines and villages. It cost R3bn and was opened, after many delays, by President Jacob Zuma on March 24 2014.
I remember that because it was the last picture of Zuma I placed on the front page of Business Day as its editor. His presence there had cost his Economic Development Minister, Ebrahim Patel, much time and effort, particularly in persuading a national television channel to cover the rollout of the state’s infrastructure programme, which he oversees (an effort, you will remember, that would eventually cost e.tv founder Marcel Golding his job).
The man who lived in the house to which the crowd was marching was the dam’s sluice gate manager. In front of his family, the crowd kidnapped him and marched him to the wall, where they forced him to open the sluice gates. For seven hours, water poured downstream, damaging construction equipment still below and placing people in its path in danger.
I don’t know if anyone died. This story was first reported only by an Afrikaans news service. The protesters were from the villages that were supposed to have been supplied with water from the dam, but were still not connected nearly two years after Zuma had appeared briefly in their district. They could see the water. But they couldn’t get any.
It is just state incompetence. The sluice-gate incident is a fact. Why, is not so clear. The story I heard was that Eskom could not build a substation to power a pump that would draw water for a group of villages because the pipes supplied to carry the water from the dam to the pump were the wrong size. So the pump wasn’t in need of electricity, no doubt, until the pipes contract was sorted out — and, no doubt again, only after a long and expensive legal wrangle.
Whatever, it doesn’t have to be this way. If the state, or the Zuma administration, were able to get over its rank hostility towards the private sector and partner it in more projects like the De Hoop Dam, it would find it could do a great deal more, a lot more cheaply and a lot faster.
The construction of Eskom’s Kusile and Medupi power stations are behind schedule because of poor project management, which Eskom insisted on doing itself.
But the state cannot appreciate how, generally, much more efficient the private sector is at getting things done. It cannot conceive of a country that works much better than the one it has now. And in some of its leading ministers, it has people who actively do not want to harness the power of business to save SA. It threatens them. They have a better idea. Just give them another 30 years.
Fortunately, one of those ministers is not Pravin Gordhan, the finance minister. Last Friday, he met in Johannesburg with about 60 top CEOs, corralled there by Telkom chairman Jabu Mabuza for a discussion that had been a long time coming. What, he wanted to know from them, can we do to turn the economy around and avoid a looming downgrade of our debt to junk status?
Gordhan has just days to squeeze the beginnings of an answer into Zuma’s state of the nation address in Cape Town next Thursday.
Then, whatever he persuades Zuma to say, he has to dress it up and feed into his budget. Fail to do either, and our outlook is grim.
What Gordhan has to do is reverse the trajectory of our national debt. Nhlanhla Nene forecast in his three-year budget review last October that borrowing would increase in the later ("outer") years to very close to 50% of gross domestic product. That spooked the market. Gordhan has to find the money to make that borrowing requirement flatten or turn down, not up — and fast.
This stuff is easy if you’re a wage earner, a mom or a dad. You cut your spending or you sell some of your stuff, especially the good stuff people will pay for. You don’t take out another loan to pay off the ones you’ve already used up.
Gordhan is also taking his meeting of last Friday to the Presidency. Zuma will meet some or all of the CEOs for a lunch on Tuesday. Time is tight. It cannot be yet another stiff affair, strangled by protocol. People must speak their minds.
Zuma has to leave this meeting knowing not only how much trouble we are in, but that business really can help him (and the rest of us) survive and get stronger.
He must obliterate any political opposition to any proposition Gordhan and business leaders think would help shore up our finances in the medium term. This will be his only chance. A plea bargain on the waste at Nkandla is neither here nor there to the people we borrow money from.
There was talk last Friday of private money going into some of the state’s assets. South African Airways should no longer be a state problem, even if it’s just given away. Medupi and Kusile power stations should be sold off. Where possible, private-sector managers should be drafted into the state sector with broad mandates and good incentives to improve efficiencies and returns.
Government infrastructure projects should be owned and managed by the private sector. Some are really attractive. Business should be invited to assemble, and finance, a small advisory team to work inside the Presidency.
Does Gordhan have in his power anything business might actually want? In SA, the finance minister doesn’t run the economy, although Zuma might consider giving him an expanded role over some of the ministries that currently make economic policy (badly).
He probably can’t avoid personal tax increases and he can’t cut their electricity and transport costs. But he can get them a real foot in the door, and possibly save them further rand (and asset) depreciation, if they help him now. It’s a big opportunity.
I respectfully disagree with the analysts who insist it is misguided to focus too much on Zuma. The fact is that Zuma has become the system.
Nothing of any import happens without a flick of his wrist. So, this has to be Zuma’s moment. And if it works, he gets to open the next dam. He gets to be the hero, Nkandla or not.
Whatever it takes. We just can’t get downgraded to junk.