Ebrahim Patel, the economic development minister, hailed the new growth path document he released last week as a new dawn for the South African macroeconomy, but key stakeholders are treating it as a starting block for discussion rather than as set economic policy.
Departmental insiders said this week that the document had, in fact, been completed in July this year but a “back and forth” between the department and the National Planning Commission (NPC) and treasury delayed its release.
Although the document was adopted by the Cabinet in October, Patel was directed to spend more time discussing it with interested parties to win political and social buy-in before its formal release last week, a Cabinet insider said.
Zubeida Jaffer, Patel’s spokesperson, would not disclose the identity of those who helped Patel put together the nuts and bolts of the document but others close to the minister said it was an in-house team.
“In July the document was already drafted by technical people in the department,” said a source close to Patel.
“Then there was a lot of back and forth between us and treasury and the NPC, which is why it took so long. I thought it was never going to get done.”
The Mail & Guardian understands that Patel himself made detailed interventions.
Staffing issues
Other departments were asked to contribute on issues concerning them, but no heavyweight politicians were involved.
Last year Patel struggled to staff his department, with some new recruits packing their bags shortly after they started working for him.
This year he managed to almost triple the staff count to 54 employees, including new deputy directors general, chief directors and research staff.
But tensions between the department and the treasury have not been fully resolved. A treasury source said that treasury’s role in drafting the document was limited.
“It was very strange that we were not more involved, but you will have to ask them why,” the source said.
Jabulani Sikhakhane, the treasury spokesperson, said that the growth plan was part of “outcome four of the economic cluster delivery”, adding “within outcome four, national treasury is the lead department responsible for the achievement of a stable and competitive exchange rate, increased private savings, a monetary policy approach that supports balanced and sustained growth, a counter-cyclical fiscal policy and improved state procurement practices”.
No cake
Gill Marcus, the Reserve Bank governor, also weighed in on the lack of policy cohesion between the economic ministries. In an interview with the Financial Mail this week she said: “South Africa is forever talking about devising a new growth path, but the lack of policy cohesion among the economic ministries makes it a nightmare to craft. As a result, South Africa is forever mixing but never producing the cake.
“I think we can do it but we need to rebuild trust and confidence in each other and ourselves — and deal with the issues that are wrong.”
The growth plan also received a cool reception when Patel presented it to the African National Congress’s (ANC) economic transformation committee.
“I wouldn’t say the response was overwhelmingly positive,” said an ANC national executive member who attended the meeting.
“Patel presented and there were lots of questions, people were making proposals and people will still make contributions.
“The document was accepted as a basis to make meaningful intervention and we will respond to it at the appropriate time.”
Better communication
Another senior official in Patel’s department said criticism was inevitable, given that it was an economic document that would not suit everyone.
“But the process of communicating this should have been done better.
“You are not going to see other ministers issuing statements in defence of the document. You won’t find that.”
Although the Cabinet accepted the document in its entirety, the ANC and the Congress of South African Trade Unions (Cosatu) see it as a basis for discussion on macroeconomic policy designed to achieve the outcome of job creation.
Jaffer said the department was happy that the document “sparked debate”.
“The department believes that a real dialogue includes placing the difficult issues and trade-offs on the table, then identifying areas where rapid progress can be made with implementation and focusing energy in those areas.”
The fears and concerns on aspects of the proposed social pact had been voiced and would be discussed in the period ahead.
A departmental insider said the government was aware that in other economies such high levels of unemployment would not be tolerated.
“The focus of the document is the intent — what is to be done to reduce inequalities and joblessness,” the official said.