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Phumlani Majozi | 14 May 2023

Phumlani Majozi on the opinions of which economist's he respects, and why.

Last week on Twitter, chief economist of Rand Merchant Bank (RMB), Isaah Mhlanga, suggested that Eskom, South Africa's troubled state-owned electricity supply company, be privatised.

With his tweet, Mhlanga motivated me to write this column. He validated another column I wrote eight years ago, where I argued that Eskom needs the hand of the private sector, and South Africa's energy market liberalised to allow for a more diversified supply of electricity from the private sector. Because the goal must be one, and that is the increased supply of electricity. To suggest that eight years ago was sensible, is still a sensible suggestion today.

You will think that it is economist Isaah and I only who believe Eskom needs the involvement of the private sector. Not at all. There are other people out there, including the new minister of electricity Dr Kgosientsho Ramokgopa who has said that some privatisation is needed at Eskom.

Even President Cyril Ramaphosa’s government can see that Eskom needs the private sector. The R254 billion debt relief announced by finance minister Enoch Godongwana in his budget last February mandates Eskom to partially privatise the coal-fired plants and electricity transmission network.

Mhlanga has not only spoken sense on South Africa's electricity supply crisis, but he has also spoken sense on matters related to minimum wage laws, social grants. His view is that cash transfers, social grants, is not a policy that will make South Africa a rich society. Instead, savings and investment is what South Africa needs to be a globally competitive economy. With such views Mhlanga deserves to be listened to often by President Cyril Ramaphosa. Not only listen, but also initiate the implementation process of Mhlanga's ideas.

After seeing Mhlanga’s tweet, I began to ask myself, who are other voices that Ramaphosa ought to listen to on public policy. Amongst the people who came to my mind is Moeletsi Mbeki, the younger brother of South Africa's Former President, Thabo Mbeki.

I have followed Moeletsi Mbeki’s work for years, and have encountered him in person three times over the past eight years. The last time I encountered him was at a dinner with some of South Africa's influential people in Johannesburg two years ago.

Moeletsi is a fearless critic of South Africa’s public policy. He’s not afraid to be controversial too. He has repeatedly said that stronger business growth and entrepreneurship are key to addressing South Africa's socio-economic problems. He has also been critical of black economic empowerment (BEE). His view is that affirmative action is for minorities, not majorities. He also views BEE as a driver of corruption.

Mbeki is not wrong, the black elite has abused BEE for its benefit over the past two decades. The data from The Economist magazine shows that it's the black elite that has made the biggest income gains since BEE began in the 1990s. We need policies that will address the needs of the disadvantaged in South Africa, most of whom are black, and encourage growth of small businesses in rural areas and in townships. We can’t have the black elite continuing to abuse the BEE system. Yes yes yes, we do need empowerment policies, but it must not be the empowerment policies for the black elite.

Zuma’s administration ignored Moeletsi Mbeki’s advice more than ten years ago.

When Jacob Zuma became President of South Africa in 2009, Moeletsi Mbeki wrote a letter to him, outlining proposals on what would have to be done to address South Africa’s socio-economic problems. That letter, sent to Zuma in June 2008, was ignored by Zuma’s administration, which is sad because the ideas Moeletsi proposed were good. Ramaphosa should not ignore Moeletsi.

And then there is Dawie Roodt, the chief economist of Efficient Group, Dawie is one of the most passionate economists I know, and that I have spoken to before.

I first met Dawie in 2014 in Bryanston, Johannesburg. On that evening at the Free Market Foundation South Africa, he was presenting on his then new book entitled “Tax, Lies and Red Tape.”

I have had the privilege of participating in one webinar as a speaker along with Dawie. That webinar was exhilarating. Dawie’s work speaks for itself. He is not always negative on South Africa. Sometimes he can say positive things about a specific policy proposal by the government, or about a certain political leader or minister. That bolsters his credibility. We live in an era where people are critical of everything and see no good in South Africa.

Dawie holds a view that structural reforms is what South Africa needs to fix its economy, which is the same thing that has been said by Lesetja Kganyago the governor of the South African Reserve Bank (SARB). At one point during one of his presentations that I attended in Johannesburg years ago, Dawie was asked which countries South Africa should look up to on policy reform. His answer was that we should not look far. Rwanda is one country we can look up to, he said. Mauritius and Botswana as well. I could not disagree with his answer. Ramaphosa should definitely talk to Dawie.

I cannot leave out Prince Mashele, a fascinating, fearless political analyst who says correct things. In one of his columns, Mashele wrote That President Ramaphosa “might need to go to Britain, to learn a thing or two about bold leadership from the grave of a woman leader - Margaret Thatcher.” That was good advice from Mashele because given what the country is enduring, there are many lessons President Ramaphosa can draw from Thatcher.

Our economic reform requires Thatcher’s style of leadership, characterized by boldness and courage. With strong leadership that is intolerant of crime, the needed reform can be done at a speedy rate.

I listened to Mashele in a conversation with journalist Faith Mangope on Metro FM this week. Prince had a simple, straightforward message - and that is - this is a democracy, if South Africans want to change the country for the better, then they must vote differently. The responsibility to change South Africa lies with the voters. Correct! The message I have preached for years.

Mashele’s views on land reform matters make sense on many levels. He is realistic in his analysis, and honest too. That is great because we South Africans must hear the truth.

Wits University has a good economist that Ramaphosa should reach out to as well, Lumkile Mondi. Mondi is one of the finest economists in the country. An economist with enormous experience. Like the previous personalities I have discussed, Mondi understands very well that business must be the driver of economic productivity. He sees investment in intrapreneurship as a critical thing to do to jumpstart South Africa's economy.

Busi Mavuso has been courageous in pointing out the wrongs by our government. She's a highly successful lady who strongly believes in the transformation of South Africa. She sat on the board of Eskom till her resignation in September last year. Currently, she's CEO of Business Leadership South Africa (BLSA). In one of her columns recently, published on Moneyweb, she wrote that her organisation BLSA “exists to support the creation of a conducive environment for business”.

On matters of public education policy, Ramaphosa ought to reach out to Professor Jonathan Jansen. Jansen wants public education fixed. He believes in accountability and hard work. I have followed Professor Jansen for years and think highly of him.

South Africa’s public education needs to be reformed to work in a manner that reinforces accountability. Jansen believes that it begins in the home when it comes to education. That there must be a culture of reading in homes, which will help kids succeed at school.

My view on matters of public education is that while the government attempts to fix public education, it must also encourage growth of independent schools. Voucher programs in education must also be embraced in South Africa. Such reforms will strengthen public education.

I will close with Magnus Heystek, a passionate and popular investor who pulls no punches on the failures of South Africa's government. Magnus currently heads Brenthurst Wealth. He has been brutally honest about investing in South Africa. He has said repeatedly, publicly, that if you want good returns as an investment portfolio manager, invest overseas, not in South Africa. Well, you cannot hate him for that because the data supports his view.

Magnus is a typical capitalist investor and wants to grow his clients' wealth by making what he sees as best investment decisions. It is what an investor must do. Ramaphosa ought to be reaching out for counsel from Magnus on how to make South Africa more attractive to investment. Magnus would not hesitate to advise, he’s a very nice person.

This country has many talented, bright people whose ideas would help revive South Africa, make it one of the robustly competitive markets in the world.

The people I have discussed above are not all the people I have in my mind. There are others. Were the ideas of these people implemented with speed, South Africa would reboot and soon become globally competitive. On global competitiveness we have not been doing well, as the IMD Competitiveness Index has shown in recent years. These people can be listened to, and their ideas implemented. Ramaphosa’s government should reach out to them often.

Phumlani M. Majozi is a senior fellow at African Liberty. His website is Follow him on Twitter: @PhumlaniMMajozi. 

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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