Dr Pali Lehohla dissects six key issues in South Africa which the government has failed to pay proper attention to
In Chinua Achebe’s book titled, ‘No Longer at Ease’, Obi Okonkow, a UK trained English graduate, discusses the notion of “Tragedy” with the Chairman of the Public Service. Okonkow’s definition of tragedy is a swift event with a sorrowful end. The chairman argues instead that tragedy, as he learnt from an old man in his village, a Christian convert, who suffered one calamity after another, is “life was like a bowl of wormwood which one sips a little at a time world without end. He understood the nature of tragedy.”
Recently, the Sunday Times hosted their 9th Annual Directors Event at Arena Holdings and was themed as ‘Building Sustainable Business for a Prosperous South Africa’. It occurred a day after business hosted an emergency meeting with the President of South Africa, Cyril Ramaphosa, to discuss yet another intractable series of emerging crisis. The historic crisis as captured in all government has been the triple challenge of poverty, unemployment, and inequality. But what the old man in Nigeria said is “life was like a bowl of wormwood which one sips a little at a time world without end” would be emulated by South Africa’s multiple crisis that continue to pile up, one on top of the other.
In the end, rarely do we hear of the triple challenge of poverty, unemployment, and inequality. In recent times, the July Riots of 2021, the burning down of parliament six months later in January of 2022, the cholera deaths of Hammanskraal in May this year and counting, and the sorry state of rail and road infrastructure represent a chain of tragic experiences impacting both the social, economic, and well-being of South Africa. The Thursday meeting with the President thus added to the list of active volcanoes. A crisis of energy, a crisis of logistics, and a crisis of crime. For each of those, business and government established a crisis committee. Little is heard of the longstanding crisis of jobs, crisis of poverty, and crisis of unemployment that are close to concluding a third decade.
I delivered a keynote address at this crucial function in our history. The organisers asked me for a crystal ball on six issues. These were about addressing:
The skills gap;
- High unemployment, especially amongst the youth;
- The role of small and medium business in addressing this crisis;
- What support should be given to SMMEs;
- Why young people hold the key to unlocking South Africa’s economic potential; and
- The importance of adopting sustainable and responsible business models in line with the UN’s Sustainable Development Goals (SDGs).
My assertion and conclusion were that these concerns are impossible to address under the current policy regime. They merely constitute and add to the list of what the old Nigerian man said about tragedy, “life was like a bowl of wormwood which one sips a little at a time world without end”.
I discuss each in turn.
Addressing the skills gap is confronted by an exhausted education system that continues to fail up to three quarters of the 1.2 million youths who either fail to sit for a matric exam or do not pass matric. Eight hundred thousand South African children, year in and year out, do not achieve a decent matric exit. So, they fail to achieve a policy position of completing a universal basic education. In an attempt to go to school, children confront flooded rivers. The rail that used to be the mode of transport for school commuters has faced the level of destruction that only its dismembered skeletal remains are visible. The destruction of rail infrastructure has rendered that cheaper mode of travel as impotent. At university level, far smaller percentage of blacks and coloureds who started a degree after completing matric complete the degree and at that on time. Several fall by the way side. With that kind of throughput in the 90% of the population, the requisite skill level remains yawning away from whatever target there might have been.
On the question of addressing high levels of unemployment levels, especially amongst the youth, gruesome evidence is observed in a comparison of youth employment between the years 2008 and 2022. Amongst those in the age group 15-24, 1.6 million of them were employed in 2008 compared to 1.05 million 14 years later. This is a tragedy of significant proportions in the context of a growing population. Similarly for those aged 25-34, 400 000 less were employed in 2022 compared to 2008, where then, 4.8 million were employed. This sad turn of events started in 2018 when the numbers of employed youth started to rapidly decline below the level of 2008.
On the question of the role of small and medium businesses to address the crisis, the situation is sadly that whilst this sector grew, it still constitutes 32% of turnover, whilst big business is at 68%. Across the world, the numbers are in reverse order. This reflects the serious concentration dilemma of South Africa. This condition of economics hardly addresses the crisis.
On the assertion that young people hold the key to unlocking South Africa’s economic potential, the fact is that this is a longstanding elusion of a demographic dividend. The point is dividends emerge out of investment. Poverty amongst the youth is driven by the fact that 35% of them achieve low education outcomes, 10% of them are in neither employment nor education institution, and 16% are in households where none of the members of the household are working. Thus, 50% of the poverty of the youth is explained by manmade barriers, so demographic dividend is a dream of grandeur.
As regards the importance of adopting sustainable and responsible business models in line with the UN’s Sustainable Development Goals (SDGs), the issue is that of racial concentration of businesses. In comparison to the rest of Africa, businesses in South Africa are not only large shop outlets, but they are also concentrated along racial lines whereby whites actually own the big chains and blacks and coloureds are in small spaza shops and selling from pavements.
My crystal ball suggested that South Africa is indeed a failing state where anything and everything is a crisis. Societal expectations are high from the government, but societal levels of satisfaction are very low. In fact, society expectations of delivery from the government because of persistent failures are lowering as the cholera outbreak in Hammanskraal in this day and age demonstrated. Under such conditions, where expectations are low and delivery is low, South Africa will have entered the noble status of a failed state.
There is no doubt that these deplorable conditions are manmade by people who occupy positions that are beyond their capability of leading. In fact, at the heart of it is poverty of empathy and the prominence of pomposity and crass materialism on the part of these people who are in the position of leaders. They have infested society with levels of such trust deficit that the country is in immobility and unease. Business has once more in three years convened a crisis meeting with the President on matters of energy, crime, and logistics.
The last time three years ago it was about the crisis of COVID-19. Then business had emerged with a plan with clear targets on employment generating up to eight million jobs by 2030, growth was projected at 5.2% per annum, inequality would slump to 0.43, poverty and debt to GDP ratio would be 60%. These targets were the most ambitious that a caring government would have grabbed with both hands.
On their part, the government had targets that were simply not only laughable but had severe gaps. This illustrates the degree of malnourishment and deplorable state of thought in those who basically have become passengers whilst pretending to be in the driver’s seat.
In my analysis of the inputs, the Applied Development Research Solutions (ADRS) was very close in its ambition to those of B4SA. What was lacking, however, in B4SA in its laundry list of a thousand pages was the econometric analysis and path of how to achieve the said targets.
On their part, the government has no tools of systematic analysis that follows the laws of motion of economics with which they could analyse and aggregate B4SA proposals. So, in this circus of trying to deal with a crisis of COVID-19, the bride had taken the position of the groom and the groom still wanted to be the groom but without the rings. The marriage could not be consummated and became a simple vat-en-sit where everything and everything became permissible.
A conscious president and caring government would have embraced the targets of B4SA and instructed as offered that they should be achieved come what may. But the president and the government dropped the ball and opted for a pick and choose strategy that forgot the targets. No sooner had we traversed the path, other tragedies as in the Nigerian story struck as “life was like a bowl of wormwood which one sips a little at a time world without end”. B4SA has gone raising back to the shrine and the clairvoyant has burdened them with three crisis committees. Applied Development Research Solutions had in response to a request from Indlulamithi Scenarios 2030 used its 12 000 simultaneous equation model of South Africa Linked National Provincial Macro Household to systematically quantify the Indlulamithi Scenarios. The results of this were presented in different fora, including the government. Business often asked, “What does government say in respect of these results?” Of course, the answer has been, the government had nothing meaningful to say except regurgitating the normal tired line that we appreciate the presentation, and we will come back to you—a polite way of saying shut the door behind you.
What is clear in the current crisis is that rather than create crisis committees, there is value in the government going back to the B4SA proposals and injecting the tools of scientific foresight and future proofing from ADRS. This will consummate proper marriage than a vat-en-sit arrangement that B4SA and government haplessly entered into three years ago and their hurried return to another crisis just demonstrates the futility of the fanfare three years ago. Matters of state require science and not common sense. This should constitute the way forward. And that can bring hope and cohesion to the nation on the six questions I was assigned to answer, rather than the ailing state tagline of “life was like a bowl of wormwood which one sips a little at a time world without end”.
Dr Pali Lehohla is the director of the Economic Modelling Academy, a Professor of Practice at the University of Johannesburg, a Research Associate at Oxford University, a board member of Institute for Economic Justice at Wits, and a distinguished Alumni of the University of Ghana. He is the former Statistician-General of South Africa.
