Impact SA

The real numbers: How the sand is shifting under the economic pillars of SA

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The sand is shifting under the long-held notion of good macro-economic pillars of South Africa.

Former trade and industry minister Rob Davies once argued that unless we disabuse ourselves of that notion, the microeconomic and trade policies are going to be suffocated by the macroeconomic rigidities.

Key macro-economic measures are mostly about the relationship between growth, prices, employment, aggregate demand, and the productive capacity of the economy.

Governments use such tools to manage the interactions of these variables while national treasuries and central banks are primary rights holders for the governance of their healthy equilibrium.

The Overton window of political possibilities is based on a theory that what is remotely possible, seen as not achievable in policy, often becomes possible over time. The impossible suddenly becomes the inevitable.

The Covid-19 pandemic seems to be steering us in that direction and rapidly so towards the Overton theory. Between 1996 and 2008, South Africa’s economy grew north of 5 percent, resulting in momentary budget surpluses, a low debt to growth domestic product (GDP) ratio and the expansion of social services. Unemployment eased from around 30 percent to 22 percent – the lowest on average under democratic rule – despite polarised economic policy debates.

On Wednesday, the Indlualmithi 2030 Scenarios hosted a policy discussion on the country’s options for the future.

The discussions centered around six documents on economic policy – from the National Treasury’s Economic Transformation Inclusive Growth and Competitiveness, Business For South Africa’s New Inclusive Economic Future to the ANC’s Reconstruction, Growth And Transformation and the group of economists’ An Emergency Rescue Package For South Africa in Response to Covid-19. What was crucial in all the papers was the overlap in most of the issues. Friday was yet another day that pointed to the prospect of the Overton window of political possibilities.

The first webinars on fiscal sustainability showed that the wall of macro-economic resistance is cracking. Although the downfall of the webinar was in its all white male panellists, it delivered the goods.

However, the question surely should be how come the Treasury and the SA Reserve Bank, in the 26 years of their existence, could not field even one black currently serving or former employee.

This is a serious indictment either on the organizers or on what the two institutions had achieved. There are competent black people in their own right like Ayabonga Cawe, Duma Gqubule, Chris Malikane etc who, in their recent pasts, took apart Finance Minister Tito Mbweni, central bank governor Lesetja Kganyago and likeminded arguments on fiscal and monetary policy issues. We sorely needed a rejoinder. One would have expected them to have been part of the panel. There are three more panels coming and I trust the discussions will be even better.

The results of all these streams of contentions should constitute a truly consultative process towards a Medium Term Budget Policy Statement that is true to economic transformation, inclusive growth and competitiveness.

That way, the Overton window of political possibilities would be eventuated into an impossibility becoming an inevitability.

Dr Lehohla is the former Statistician-General of South Africa and a former head of Statistics South Africa.Source –


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