• "Reimagining" SA's economy requires powerful strategy, implementation and collaboration between departments.
• Old systems will need to be disrupted - and we should be prepared to let go of what's no longer serving us.
• This can only be done by a capable state.
• If government culture doesn’t change, there’s little chance of reimagining this economy. We’ll just continue looking to National Treasury for solutions.

So just who is the Director General of the Presidency? That was my thought when I thought of the practicalities of "reimagining" an economy as old as South Africa, something I’ve heard President Cyril Ramaphosa say in the wake of the Covid-19 pandemic. Someone has to quite simply lead the charge from the highest office of the land and it’s not necessarily the President himself.

A lieutenant in his office must corral the other departments and get them marching to whatever that final idea is of a reimagined SA economy. The idea excites me, because there’s so much of the old SA economy that exists today that should have long been disrupted in the early years of the experiment that is still the new SA. For one, we are a nation blessed with too many firms that hold tight to the moniker of "…too big to fail" and, as such, continually are afforded bailout packages when maybe it's best that they are left to the natural course of markets.

Now you may be thinking that I’m picking on the more 700 state-owned institutions inherited from a corrupted economy that have dominated our natural discourse for a decade if not more, but in the private sector there are many of these albatrosses that have and continue to attract capital that would have been better invested in transformative and innovative ventures.

Slow car crash

In the case of Edcon, the owner of Edgars, we’ve watched its death unfold like a slow car crash for maybe more than 20 years if we are honest with ourselves. Cheap Chinese imports just cushioning it from a harder crash towards the end of the nineties and in the early part of this century that helped attracted US private equity players in 2007.

oday, it’s in what a long overdue business rescue and finally on its knees. But as it employs some 17 000 South Africans, a significant number to add to an already long jobless line, I wouldn’t be confident enough to predict its final curtain call. Just who’ll be callous enough to blame that old savior of some of our old, ailing and decrepit business cases such as that of Edgars, the Public Investment Corporation if they once again came with a rescue package because of the pressures of state and unions.

We are blessed with many such cases, whose existential crisis has been brought forward by the Covid-19 pandemic. That’s the nature of a South African economy that has created some giants that may have gone on to compete on a global stage to varying degrees of success, but all the while have dominated the economic narrative in their home country. Established interests that anyone tasked with reimagining the state of us is going to have to battle.

How does one begin to reimagine an economy without first dealing with this elephant in the room? Whether it’s ArcelorMittal South Africa in steel, a British American Tobacco in cigarettes or our very long and illustrious list of state-owned enterprises that have stumbled along in the dark without a clearly articulated mandate for years.

These giants house thousands of employees in their large eco-systems and while they don’t overtly operate like big corporations in the US by funding lobbyists, they don’t really have to do anything. The danger of the closure of a town like Vanderbijlpark is enough of a threat to keep regulatory wolves at bay in the case of the Lakshmi Mittal-owned steelmaker that has more than 70% share of the market.

Reimagining and implementing a new economy is a massive job and one that can only be done by a capable state.

I can’t imagine the established interests doing much to disrupt an economy and finally embrace "inclusive" growth if it comes at their cost. Anyone who can remember the loudest noise about the initial rounds of black economic empowerment deals, remembers the complaints about its costs to existing shareholders because of the discounts afforded to black investors who for the first entered the realms of equity ownership. It told a story.

Which goes to the importance of the head prefect in the Presidency, who in my book should be leading the strategic thinking, coordination of the different ministries, business grouping and unions in the course of recasting our economy that we know is inequitable by design. If we are to set a different course for the state, his or her technical competence on its own won’t work.

Experience and, more importantly, strategic thinking, will weigh more than merely meeting the educational criteria, of which public servants are more geared towards.

While our ministers can strut about like peacocks proclaiming a new dawn for the SA economy in line with their boss, President Cyril Ramaphosa, we know the flying can only happen if their departments have such talent in their midst or allowed to develop.

And that’s where I have to wonder what years of instability at various departments has done to the orientation of the public servant. The problems are long-term in nature and were identified by the National Planning Commission’s first diagnostic report of government in the early years of President Jacob Zuma’s term. In the years that followed, his two terms would come with heightened levels of maladministration, corruption feeding into the instability.

The public servants, who shone brightest were those not orientated towards serving the people or working with civil society, business and labour. The state won’t change this economy by going it alone, it has to encourage problem solvers and strategists in its midst and recruit where necessary.

If government culture doesn’t change, there’s little chance of reimagining this economy. We’ll just continue looking to National Treasury, which has stood as an island of stability in government for more than 20 years, for our solutions. This even in matters, perhaps where it shouldn’t lead like reimagining the SA economy.

In a functioning state, the "reimagining" of the country’s economy shouldn’t be coming from Tito Mboweni’s office. It should come from Presidency and its head prefect that has to drive them through the various ministries. But amongst the host of what’s still a bloated Cabinet, its Treasury that holds the prized asset of credibility.

In the early weeks of the Covid-19 economic crisis, the department long derided by competing ministries for its "blue-eyed boy status" held a virtual press conference to detail its plans.

A crackling line with an automated voice ushering the entry of every journalist into the virtual press conference disrupted Minister Tito Mboweni as he laid out the department’s plans; a fitting chaos, I thought. Here stood a minister that was now expected to chart a course to stimulating an economy after delivering a budget after a couple months earlier that spoke of reduced spend.

The stuttering, crackling line helped hide one of his proposals about foreign workers at restaurants made that afternoon that could have been drawn on the back of a matchbox. Populist in nature, and something I’d expect out of economics practiced by a certain executive mayor of a city in the east of Gauteng.

But to be fair, no one can expect a growth play from a ministry whose focus has been on cutting expenditure for years. The President’s office has to propose this "reimagined" economy and drive coordination within the state as a whole.

If the office doesn’t have the capacity to lead, change the culture that has been allowed to prosper through the various departments over the "wasted nine years" as well as negotiate the path towards a more just economic system with the established interests of businesses "…too big to fail," then this idea that I cherish will amount to nothing more than words.

I began this piece by maybe unfairly asking who is the director general in the Presidency, and if you hadn’t googled it yet, there is one. He is, however, outgoing, and his role has been described as administrative in nature. Whoever comes after will have to be more empowered, and strategic in the manner in which they go about changing the business of government as a whole.

If the centre doesn’t lead, the allocation of resources of state will continue to be geared towards patching up business models of the establishment and placating ideologies of old.

Ron Derby is the editor of Fin24.