SONA: Businesses should implement stateproofing strategies as government doubles-down on failed policy – Sakeliga

Sakeliga releases outcome-based presidential scorecard 

The dire state of the South African fiscus and economy required of President Cyril Ramaphosa to announce fundamental reforms in government policy. Instead the President recommitted his government to the interventionist role that has brought the country to the point it is at.

SONA 2020 also marks the debut of business organisation Sakeliga’s outcome-based presidential scorecard. The scorecard is a composite indicator of ten objective measurements, developed in order to distinguish real-world economic signals from political noise. According to the indicator, the Ramaphosa administration currently presides over a historically low level of 30 out of 100 and has failed to arrest the declining trend prevailing at his commencement of office.

Considering the lack of reform, Sakeliga expects its outcome-based presidential scorecard to remain at these historically low levels.

President Ramaphosa’s speech demonstrated two fundamental misunderstandings. First, he incorrectly diagnosed the cause of the dire state of the economy and the fiscus when he laid blame for it at the feat of corruption and state capture. However harmful, these were only contributing factors to the country’s problems, paling in comparison to the harm done by interventions such as high taxes, bureaucratic red tape, BEE, wasteful spending, competition policy and expropriation without compensation.

Second, President Ramaphosa failed to acknowledge that not bureaucrats and politicians, but businesses in market economies create wealth. This is demonstrated in his emphasis on “economic masterplans” and “social consensus” at the centre of his strategy for economic growth. In this vein, he also announced a sovereign wealth fund and a state bank.

Positive developments were few and far between. One example is his acknowledgement that it is better to accept rolling black-outs than to postpone refurbishment and repairs of Eskom’s power stations.

President Ramaphosa closed his speech by saying “A new age has begun.” This is incorrect. He has assured business and the public that his government is doubling down on its interventionist policies.

Sakeliga remains committed to interacting with government for a better business environment. However, given government’s unaltered course, we will increase our efforts to develop stateproofing initiatives to hedge not only our members, but the economy and public in general against the harmful effects of misguided politics.

For more information on Sakeliga’s outcome-based presidential scorecard, please click here.

Issued by Piet le Roux – Sakeliga CEO.