BUSANI NGCAWENI: Behold the age of demagoguery and un-think


The problem with the South Africa of today is that we appear to have collectively elected to suspend our critical faculties.

We are in the age of un-thinking. In fact, the idea seems almost blasphemous to contemplate; as are the concepts of reason, of rationality and pure common sense.

What else could explain, for example, the preposterousness of entertaining the idea that individuals who contributed to the erosion and decline of key state-owned enterprises can actually contribute to restoring the fortunes of those same entities? Indeed, as the old adage goes, the lunatics have taken over the asylum.

We see signs of un-think (or perhaps even worse, Orwellian Groupthink) everywhere.

We see it amongst the brigades who hide behind supposed ideologies to criminalise creative ideas and advance reductionist positions: i.e. it is either a square or circle.

These pseudo-ideologues are not necessarily concerned with advancing superior ideas or even logic. They want to win arguments through threats, slogans and slander.

But no more is it evident than on the issue of the national power utility.

Eskom’s debt trap equals roughly a quarter of our entire gross domestic product. It is impractical, unsustainable and edging us closer to tipping over a fiscal cliff. It is the single biggest threat to our economy.

It is clear that urgent solutions must be found - many of which necessitate thinking out of the box.

Amongst those being bandied about is reducing debt by converting loans into equity; something large firms around the world over do as part of restructuring.

The Public Investment Corporation (PIC) or any other chosen (and willing) creditor can be approached and won over to such an arrangement: obviously taking into account that their own due diligence policies will influence their decisions to sweat billion of rands for the long haul.

By the laws of logic, this would make sense. The PIC or any of Eskom’s creditors could agree to a debt to equity arrangement to say a hypothetical value of R100 billion - subject to transparent shareholder compacts and dividend agreements, with the state retaining the golden share and veto right.

One need only look at Telkom, where the state is a minority shareholder in a listed entity that pays dividends, whilst the state has special rights to approve the board and endorse the CEO.

Similarly with Eskom, with a clear turn-around strategy that is executed with full buy-in of critical stakeholders, we could, in another decade or so, also see an SOE that pays dividends.

But this is presuming critical faculties are applied to solutions, yet we are in the milieu of un-think, with an unhealthy dose of demagoguery.

In one corner are die-hards who will argue that the PIC funds are the hard-earned pension of government workers and should not be touched.

Except if one considers, of course, that PIC money as well as that of most of Eskom’s other creditors are also the pooled savings, pensions and investments of individuals in some form or another. Money that is at great risk.

In any event, the taxpayer is already cushioning Eskom through the endless guarantees and bailouts.

Then we have a form of the demagoguery of its own - but cloaked in the veneer of progressiveness. These are the individuals and groups who regard the mere word ‘privatisation’ declared a profanity.

Like the McCarthyism of yore where there was a red under every bed, they see signs of it everywhere and gather their pitchforks at any sign of private sector partners being brought into Eskom or any other SOE.

By this measure, public-private partnership is in fact not that at all but simply privatisation. Was it not Marx who said labour and capital are the most vital factors of production? In the absence of capital, how can the utility produce productively?

Again, here logic escapes and un-think enters. Not to mention the critical question we should be asking of ourselves, namely how (if at all) puritanical statism has advanced Eskom’s fortunes to date?

This camp is also inclined towards delusions of grandeur. One could not but be amazed to hear a union leader declare recently that the new Eskom CEO will take directives from his organisation.

Let us for a minute concede to the merits of what may be described as this German model of co-determination this labour leader advocates for. But it doesn’t end there.

In Germany, the private sector is relied upon to invest both capital and expertise in the running of utilities within a collective determination regime.

In the very same Germany, they dealt with their Eskom-style problem by moving thousands of workers from the balance sheet of the main utility - enrolling them in a special purpose vehicle, which got secured off-take agreements - thus protecting thousands of jobs.

At Eskom for example one could establish a renewable energy subsidiary and move 5,000 workers there. They would enjoy full protection, and through local government agreement secure competitive long-term supply and maintenance agreements.

SAA could do the same by removing AirChefs from its stable and making it a private company owned by the workers. It could then negotiate long-term off-take agreements with airlines and even other state facilities like prisons, more so considering the mass cancellation of contracts held by the company formerly known as Bosasa. Both could contribute massively towards debt reduction and restoring operational viability.

Imagine what minus R100 billion in debt could do for Eskom. It would give the utility the space to finance urgent maintenance, and to free-up more funds to focus on its renewable energy build, to name but a few.

But alas, in the age of un-think you are accused of driving private interests, of being a tool of WMC.

Of course, there is always the option of appealing to the benevolence of creditors to give Eskom a decade long payment holiday? Or better still, debt relief as they have done to poor countries in the continent?

Now we are hallucinating. And soon we will ask the central bank to print more money or splash billions in bailouts.

And so we have a stalemate. The spectre of private sector participation looms large, and social media users are whipped into a frenzy at the thought without any considerations of what the modalities of public private partnership actually mean.

Did I mention prisons above, there is yet more to be said of the crisis in which we find ourselves.

We are all familiar with the popular Gauteng Okae Molao crime-fighting campaign. The programme is sending thousands of criminals into prison every hour. The coordinated roadblocks are catching all sorts of criminals, dangerous weapons, counterfeit goods, human smugglers and stolen property.
The success of this visible policing campaign is now even being discussed for replication nationally. Kudos to Gauteng.

But there has been a spin-off to this success: another problem has been created in the process.

The prisons are overflowing and are reaching capacity. The fiscus is under pressure and cannot afford to build new ones immediately. The inmates need to be guarded, fed and rehabilitated.

The clarion call from the crime-fatigued public is “send them to prison and throw away the keys”. But which ones? The ones we have are bursting.

Private-sector money can build prisons, and quickly. As has been done in other jurisdictions, they can be built and managed through a public-private-partnership, and then transferred to the state.

But in the wake of the Bosasa scandal, no one would dare propose this in public. You will be accused of advancing state capture 2.0.

Perhaps this is just a consequence of government’s poor communication. After all, even if the fiscus were to build prisons tomorrow, it would still have to borrow from the private sector (as National Treasury does weekly to keep the state machinery rolling).

Ironically, the same province that gave us a successful anti-crime programme referred to above cannot think beyond political self-preservation when it comes to the e-tolls debacle.

As a consequence, there is a stalemate now affecting the whole country. The national roads agency is already in crisis, losing critical skills and stunning their ability to raise funds to build more roads. A national fuel levy to subsidize Gauteng motorists in inequitable.

But what is to be done? It’s a zero-sum game. What we know from political science is that gaining political capital is not equivalent to mobilising private capital to purchase public goods like roads.

But this is after all the age of un-think. An era where suspicions of state capture and privatisation are like a silent fart in an elevator. No one claims it. Everyone suspects everyone to be responsible - thus stifling innovation.

It’s a stalemate. A Trumpian approach to public policymaking. Many miss the fact that in commercial law and law of contracts, Eskom is already owned by those it owes!

When ideological posturing supplants critical reasoning and logic - imperative given our economic climate - we become blinded to the realities we face. We become mired in minutiae and lose focus from the bigger picture.

We are razzle-dazzled by fancy words and ideological terms like ‘motive forces’, ‘means of production’, 'state control’, and ‘commanding heights’ instead of the truth staring us in the face: that we are at the brink and need urgent solutions now.

In the words of the old Broadway tune of the same name:

“Just give ‘em the old flim flam flummox

Fool and fracture ‘em

How can they hear the truth above the roar?”

Ke Dezemba boss, let us busk in the sun and await the vitriol of the lynch mob reacting to these unmandated reflections. Yes, that’s where we are at - unwilling to challenge ourselves to think outside the box - but equally unwilling to be persuaded by the ideas of others.

Welcome to the post-truth era.

Busani Ngcaweni is visiting adjunct professor at Wits School of Governance. Follow him on Twitter: @busani_ngcaweni