The reckless replacement of the finance minister in the face of economic headwinds is irresponsible, irrational and unpatriotic; Zuma just delivered a worse life for all.
So says the Young African Leadership Initiative (Yali) which comprises professionals who are leaders in their fields, spanning sectors of government, the financial sector, South African and international corporates and civil society. Corruption Watch’s head of legal and investigations, Leanne Govindsamy, is a member of the group.
Yali Mbewu is the first youth cohort of the Young African Leadership Initiative. The purpose of the lifelong programme is to help successful, socially conscious, young Africans transition to conscious servant-leaders through text based learning and discussion.
Read Yali’s statement below:
The announcement by President Jacob Zuma to replace the finance minister has recklessly endangered the South African economy. This decision can only be described as a disaster. As representatives of a young professional generation, passionate about building a better South Africa, we call on the ANC to recall the president for the betrayal of the people of South Africa.
This betrayal will be experienced differently by the rich, the middle class, and the poor; but it will negatively impact everyone. From declines in social services to sky-rocketing interest rates, life in South Africa has just become tougher.
The financial indicators of the announcement yesterday have clearly communicated the extent of this disaster, and the negative impression that this decision has created.
The rand is worth less now than in its history, this is only the beginning of the repercussions, including:
- Bond markets blowing out, the spreads have already risen, making it more expensive for SA to borrow money.
- Interest rate hikes, as the country attempts to curb inflation.
- South Africa’s ratings are downgraded again, which destroys business confidence and destroys jobs.
- Expectations that the nuclear deal and the SAA deal will be bullied through.
There are dire consequences of the president’s decision to the South African economy. It delivers a message that the ANC and its executive are unconcerned about the people; that the concerns of the country’s citizens do not matter.
It is unprecedented that a decision by the executive can cause such damage, with no tangible benefits to any of the people of South Africa.
There is no portion or section of society that escapes the damage wreaked by this irresponsible move. The symbolism embodied in this decision will embolden the worst in South Africa, self-interest, graft and corruption.
This betrayal of all of the people of South Africa places a duty of responsibility on the ANC leadership to recall or impeach the president.
How will this affect ‘ordinary’ South Africans?
South Africa is a highly unequal economy.
The table below demonstrates how this decision negatively impacts all sections of the South African society; from the very poor to the very rich.
Impact of this decision
(income less than R40 000 per annum)
|Extremely vulnerable people can expect to receive a decline in state services, as increasingly tight budgets mean less state funding for basic electricity, basic education, social grants, public hospitals, and housing.
The sentiment of the youth in this segment is to burn the country and to take what you can. This group will rally behind populist ideas.
(annual income R40 000 – R200 000)
|Service delivery decreases, cost of living increases. Borrowing costs increase. The burden of household debt increases. Ability to enter the property market disappears. Access to higher education opportunities are severely limited.
Municipal finances struggle, and hence refuse removal, water, electricity and rates are all negatively impacted.
The youth sentiment in this group is that they are being pushed closer and closer to the breadline. The ability to remain hopeful about the future is deteriorating.
(Annual income R200 000-R1m
|This group will find borrowing more expensive. The burden of tax will increase as tax rates are increased to delay the decay of service provision. Property will become unaffordable because of debt costs and increasing property prices (driven up by international buyers benefiting from a weaker rand). Retirement savings are put at risk; all of the government and private pension schemes rely on a consistent domestic market and have invested locally. This value is destroyed, impoverishing the retiring generation. Many who can leave, do, taking with them the critical skills needed in this country – experienced teachers and nurses, bureaucrats, doctors.
The overwhelming sentiment is of helplessness, and of betrayal. This is not the South Africa we want to work for, this is not a South Africa that I will have a future in.
(Annual income over R1m)
|Move money out of the country in droves. Money that was made in South Africa will leave the country, at a huge discount. Value is destroyed. Some may move their money, but stay to see if there is value in the chaos. Many more that are economically and professionally mobile will leave, taking with them entrepreneurial ability, risk appetite, command of resources and business experience.
The overwhelming youth sentiment that things are going to get a lot worse, but this class can leave, any patriotism or willingness to make personal sacrifices to build a better country are eroded in the face of self-interested leadership.
The decision to remove Minister Nene and replace him with an inexperienced, failed, back-bencher is a betrayal of the South African people. We, as a diverse group of young South Africans, call on President Zuma to step down or be recalled or impeached by the ANC.
This is a call to the senior leadership that is left within the ANC to act, your silence is breaking South African hearts. To stand on the sidelines is to be complicit in the destruction of what so many have fought to build. Please act; South Africa’s children are watching.
• Image by Matt-80, via Wikimedia Commons