Unintended consequences?

24th May 2024

By: Terence Creamer

Creamer Media Editor


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It is highly unlikely that South Africa would have made the progress it has in stabilising electricity supply and setting in place initiatives to halt the collapse of the country’s freight-logistics system had it not been for government’s decision to collaborate with the private sector.

This is not to say that these strangleholds on growth, development and the psychological wellbeing of all those who have been navigating both extreme loadshedding and dangerous road congestion in certain freight nodes have been entirely loosened.

To be sure, without ongoing efforts to improve operational efficiencies, address maintenance backlogs and open these two crucial network industries to new investment (in a context where the dominant State-owned enterprises are lacking the financial firepower to do so) there is still a threat of backsliding.

Nevertheless, the progress is both visible and undeniable.

In many ways, the reforms pursued in these two areas also represent the best of President Cyril Ramaphosa’s first full term – one that has been severely disrupted by the devastating social and economic fallout from Covid, ongoing State capture-linked political infighting, and the associated steep declines in the performance of Eskom and Transnet.

While turning to the business community has definitely not been universally welcomed within the governing African National Congress (ANC), or among its alliance partners, which are deeply suspicious of the associated reforms, there is no knowing how bad the two crises would have become had it not been for that decision.

Likewise, the progress has been made possible only because business was a willing partner; a decision that some see as having been driven purely by self-interest, while others believe it has unjustifiably saved the ANC from the electoral punishment it truly deserved.

In the event, business chose to open the door to collaboration, probably because the immediate risks posed by the intensifying electricity and logistics crises were so extreme that they posed a long-term existential threat to sustainable business operations.

Whatever the motives, the outcomes have surely not gone unnoticed by registered voters.

It was, thus, somewhat jarring for Ramaphosa to move ahead with signing a piece of legislation in the crucial area of health that is so incongruous to reforms under way in the electricity and logistics sectors.

Now, it is difficult to argue against the intent of the National Health Insurance (NHI) Act, which seems to be in line with the spirit of the country’s rights-based Constitution.

However, South Africans are justifiably wary of this new State-led monopolisation, given the devastating failure, and deep corruption, that has been on such repugnant display in just about every other State monopoly. These misgivings will, no doubt, be ventilated in the various legal applications against the NHI.

A more immediate unintended consequence, however, could be to resurrect the trust deficit that had seemingly narrowed in recent months. At best, this could lead to a slight slowing in improvements under way at Eskom and Transnet. At worst, it could entirely disrupt all reform momentum.

Edited by Terence Creamer
Creamer Media Editor



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