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30 SEPTEMBER 2019
Tito's tweet: Desperate times call for desperate measures

by Andile Khumalo: Chartered Accountant (SA), former investment banker, investor and operator of businesses in media, marketing, communications, technology and financial services.

Recently, I woke up to the sad realisation that one of my favourite twitterites is taking a break from social media until December. We now have to survive the next three months without finance minister Tito Mboweni on "the streets" but, true to form, before the sabbatical announcement he posted yet another mischievous tweet. "Rock the boat! Shake the baobab tree! Do the unusual, disrupt the comfortable zones. Get things moving. Irritate the establishment! Let them think! That is how you get movement forward. This country needs movement. Disrupt, destruct inertia," said Mboweni.

I later realised that Mboweni's tweet came through on the same day we learnt we are likely to escape the chop from Moody's and not be downgraded to sub-investment grade. The rating agency has raised pretty much the same issues as before as their reasons to not improve SA's rating, but it seems SA has done enough to convince the last of the agencies that there is still hope.

Judging by the tweet, Mboweni was responding to the criticism he has received for the Treasury releasing a paper entitled "Economic Transformation, Inclusive Growth and Competitiveness: Towards an economic strategy for South Africa" without consulting their political bosses and alliance partners. Process is important, and perhaps Mboweni should've ensured that whatever ideas he and his Treasury colleagues have, follow the proper channels of command.

However, the reality is that he and many other ministers have to contend with a divided leadership - seemingly divided both on ideology and priority. Why else would someone almost as powerful as the president say things like "irritate the establishment" when he is supposed to be a leader of the same establishment? It seems that wherever any of them look, there is an equal number of people ready to undermine any efforts to get our country working again, and there is no telling what could've happened had Mboweni tried to get consensus before he issued this "discussion paper".

Perhaps the tweet was also an "I told you so" to all those who challenged him for putting out these ideas in his capacity as the head of the Treasury. Perhaps the minister was taking credit for the positive signal from Moody's and making the point that, at times, it is best to ask for forgiveness rather than ask for permission. But is it?

The paper recommended five "reforms" towards addressing low growth and high unemployment. These were modernising network industries, increasing competition by supporting small business growth, prioritising growth in agriculture and tourism, actually implementing our industrial and trade policy, and promoting export competitiveness. The paper concluded that subject to the timing of implementation, these reforms could get us 2%-3% growth and create a million jobs.

The truth of the matter is that we are stuck, and desperate times do call for desperate measures. However, we must be cautious not to create a state of disarray and anarchy. Perhaps, more important, we must accept that the majority of the problems are known, and the majority of the potential solutions are equally known. There are no unknown unknowns here.

The fundamental issue is with us, not some other force out there beyond our control.

We have the power to change our own destiny. We just need to get on with it now. Of course, that is near impossible to do if everyone is pulling in different directions. So I hope that my No 1 among twitterati will use the three-month social media detox to get his comrades in Luthuli House to kiss and make up and focus on what's best for the country - not themselves.

This article first appeared in the Business Times section of The Sunday Times on 15 September 2019.
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khumalo.co
khumalo.co is the investment office of Andile Khumalo, a Chartered Accountant (SA), former investment banker, investor and operator of businesses in media, marketing, communications, technology and financial services. Visit our InfoCentre or website.

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