PETER ATTARD MONTALTO: A tale of two speeches

Posted in: Economics, Energy, i-Blog, SOEs, South Africa on October 4, 2021


The visit of climate envoys to SA has been a useful shock to the system, enabling the country to step out of its comfort zone on energy matters.

This column was first published in Business Day.  

There were two interesting rhetorical nuggets last week, one from President Cyril Ramaphosa and one from our relatively new finance minister, Enoch Godongwana.

Both, if you allowed them to wash over you, could probably be easily ignored. Both didn’t say anything we didn’t know already. Yet both had strong and emotive reactions.

Why? It was the way they were said.

The first was Ramaphosa’s Luthuli House press conference comments on Digital Vibes. On the surface, accountability was called for and, not unsurprisingly, shock was expressed at what a comrade had got up to.

Yet the way this was done led to an outcry (even among my clients who are normally not quick to express outrage). The impression and choice of words implied that the ANC was more important than corruption allegations and that there were wider issues (KwaZulu-Natal winning a second term, etc) that were more important than giving simple declarative statements about wrongdoing.

Is this unfair? Not really. As SA’s political balance moves away from ANC hegemony and towards a messier contestation, hearts and minds are won in sound bites on the evening news, as happens in every other country. Language should, however, be more carefully constructed and thought through.

The most interesting factor probably was the revealed preference for the internal as opposed to public opinion when speaking off the cuff.

And yet Ramaphosa, also speaking off the cuff at the same event, gave probably one of the clearest, most transparent expositions of the just energy transition ever heard from him or any cabinet minister.

With climate envoys in the country this past week, clearly what to say and how to say it were foremost in the mind of the government and the presidency. And so out popped the “right” response (and even if you disagreed with it, it was at least coherent and clear).

The appearance of the climate envoys has clearly been a useful shock to the system. Zooming out from the details of the discussions, the government has had to get its act together and cement its views on a range of issues — from the ideological to the technical. This was not totally possible, of course, as the department of mineral resources & energy was the fly in the ointment, talking instead about non-viable energy technologies in Limpopo.

Yet the impact of having experts in the country to talk about specific issues has clearly been useful in galvanising a topic that has floated on the ether for the past decade in SA but has seen good momentum since the start of 2021.

Of course, getting things over the line is another matter: actually committing to required conditionality for borrowing large amounts of money is still going to be politically fraught. As we saw with the drama of the IMF rapid financing instrument (conditionality free) facility last year, and then with the debacle of the collapsed World Bank loan, SA has a problem accepting conditionality.

Then there is the specific conditionality of more rapid Eskom decommissioning of coal-fired power stations and everything politically and socially that this will involve.

Then came the second speech — from Godongwana at the Sunday Times National Investment Dialogue. What was said was not overly complex or long, or indeed new, but was said with refreshing bluntness.

“Government has spent 13 years trying to fix Eskom. We need a paradigm shift. What has got to be the focus is fixing the electricity supply. Let’s not talk Eskom, let’s talk security of supply.”

Now if you look at the last integrated resources plan (yes the one that’s now out of date from 2019), or speeches even by our friend Mantashe, one could argue that it’s not that different from what Godongwana said. Yet it was the tone — that it is so blindingly obvious that Eskom has to change to a completely different role and we need a system that solves problems, not ones that keep dead status quos on life support — that struck home with people.

This sense was what originally catalysed so much support for the infamous “Tito paper” from the National Treasury in August 2019 and gave rise to Operation Vulindlela. It was viewed as a rare rallying cry for outcomes-focused, evidence-based policymaking.

Godongwana appears to be saying he represents continuity in this respect. As a quite transparent ANC economic transformation committee head, he has said some odd things, such as on coal, for example. However, he now gives the impression that he is valuing and listening to his staff and is a pragmatist, especially as he is talking more regularly in public than his predecessor did.

Further evidence-based, outcomes-orientated thinking from the minister — a kind of “Enoch Paper” — would be very welcome as we drift increasingly on the economic reconstruction and recovery plan of last year (too many aims and too many amorphous goals). His recent comments on industrial policy are also interesting but need more flesh. Industrial policy need not be a dirty term but can become so if it is only associated with the department of trade, industry & competition’s command-and-control style.

Clear evidence-based policy and eyes on the goal — clearly expressed — will give difficult debates over conditionality and working with international partners on the just energy transition a very different flavour to being dragged down in ideological quicksand. Looking outside the circle of party and vested interests is therefore important. Attracting funding, investment and expertise will be so much easier. This is after all what SA needs: stepping out of its comfort zone to undertake big change quickly, sustainably and justly.

Attard Montalto is head of capital markets research at Intellidex, an SA research-led consulting company.

 

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