Why the South African Government Lets Everything Fall Apart

South Africa’s collapsing infrastructure is not merely the result of too little money. It is the predictable outcome of a state sector where accountability is weak, responsibility is evaded, and basic

Photo by Jade Koroliuk on Unsplash

I want to refer specifically in this opinion piece to the South African state sector and South African state-owned enterprises. For the purposes of this opinion piece, “state sector” includes the entire central government, provincial authorities, and municipalities.

The largest and most prominent state-owned enterprises are well known to us: these are Eskom, Transnet, PRASA, and many others in South Africa. They will all also be classified here as part of the growing “compost heap” of state-linked institutions in South Africa. These are institutions that apparently do not realise the importance of maintenance, or simply place it very low on their priority lists, if it is to be found on any “to-do list” of those respective institutions at all. Or perhaps it is written down on paper somewhere, but simply remains words that are never, or rarely, turned into actions.

The concept of maintenance is simple: it is to keep objects or systems and institutions in good condition. Seen in broad terms, how it should be done is also not complicated to understand: it simply requires the regular evaluation of condition, and then care and repairs where necessary.

Yet we see how state-linked institutions in South Africa simply fail to carry out maintenance at all, or do so suboptimally. The physical decay of infrastructure and superstructures can be seen in all sectors in South Africa where state responsibility should have prevented such decay from taking place through simple, regular maintenance.

We can subsequently also look at the decay of state-linked institutions as organisms and their systems; those elements that are less visible to the eye, but which are probably the flawed foundations causing the visible part of what they are supposed to provide to collapse.

Name any state-linked institution in South Africa and you can identify its institutional decay if you look at its inner workings. Closer investigation will point out how the systems on which those institutions are based are also not subjected to the discipline of maintenance. Institutions must continuously be evaluated as functioning organisms, and the defects must then be addressed with the help of maintenance or reform, with a view to the sustained and effective delivery of the products and/or services for which they were established.

Institutions consist of many elements, from policy instruments to organograms, human resources policies, financial systems, procurement policies, and much more. Those elements must be regularly maintained, reviewed, and adapted where necessary. They are not static, because institutions function in a continuously changing environment.

Private sector institutions have implicit incentives that spur them on to continuously perform maintenance. Their profit margins, reputations, and nothing less than their survival depend on the kind of maintenance I referred to above. This is self-evident and taken for granted by such private sector institutions. And believe me, they do not find it the most pleasant and exciting part of their operations either.

It is much more “sexy” and exciting to expand the business, for example, whether by acquiring greater market share or diversifying products and services. Or simply to make the “bottom line” look better by operating the institution or business more effectively. Then, a massive incentive to be successful in the private sector is, of course, the source of funds that had to be invested to start the business. This could have been money from the entrepreneur himself or herself, money borrowed from a financial institution, or much more complex financing mechanisms involving the issuing of shares and stock exchanges, local or foreign listings, and so on. Often, however, it is a combination of financing mechanisms.

But the underlying great truth is this: the entrepreneur is, in the first and last instance, responsible for how the funds are utilised, how they are repaid through profit generation, or how the further issuing of shares allows shareholders to earn returns on their investments through annual dividend payouts.

The long and short of it, however, is accountability in the private sector.

Contrast this with the state-linked sector. The state gets its money from taxpayers, or borrows money based on the creditworthiness of the economy, meaning taxpayers, or the state simply creates money out of nothing by printing more physical money and/or allowing electronic credit to grow.

Those funds are then allocated on an annual basis through a national budget to the state-linked institutions that must use them to deliver products and services to the taxpayers. This amounts to a form of compensation to taxpayers for being forced to entrust their tax money to the state. Taxpayers find themselves in a social contract with the state: taxpayers give a portion of their personal funds to the state, which then undertakes to utilise it on their behalf for the benefit of all citizens, in the first place.

The above descriptions of the heart of the “models” according to which a state sector like that of South Africa and the private sector in South Africa function, respectively, are of course highly simplified. But they expose the core of why the disease of poor maintenance occurs in the state sector rather than in the private sector: accountability in the state sector is relatively easy to evade, while private sector institutions literally have to answer for their actions from day to day, week to week, and month to month.

In light of the above reasoning, all elements of the state sector can of course be compared with all elements of the private sector. Why then did I decide to focus on maintenance out of all those elements?

It is because what we observe on the growing compost heap of South Africa, namely general and widespread deterioration and decay, is in my opinion primarily caused by an overwhelming lack of maintenance in the state household. There are numerous other reasons for it as well, but many of them are mere fabrications to try and obscure the true state of affairs.

Let us subsequently look at some of those “excuses” for decay heard from the mouths of the state sector and that sector’s political masters.

Probably the most popular excuse is a lack of funds. There will certainly be such cases, but mostly it is simply a lie. I venture to say that every allocation of funds through the national budget provides for maintenance, or assumes that a portion of those funds will be utilised to protect what already exists because it has already been financed.

We find a practical example of the logic of this in our own lives. Who among us has not had a need to improve, upgrade, or enlarge our houses? Who has not considered acquiring a better and larger house? But how do we handle those aspirations? First and foremost, we take our budgets into account. If the budget is not sufficient for what we would like to have, then we content ourselves with what we have.

But now we realise anew what an asset we possess, and we apply every cent we can pinch to ensure first of all that the roof tiles are replaced or sealed where there are leaks. We realise that leaking taps will drive up our water bills and thus increase our running expenses. We therefore replace tap washers or the taps themselves, if necessary.

We could endlessly expand the list of personal preferences for maintenance rather than further capital expenditure. But what stands out is our mostly rational choice to concentrate on maintenance first with the funds at our disposal, and then wait for additional income before embarking on the territory of upgrading or expansion. Only irrational and irresponsible persons would make the “nicer” choice. The reason for our rationality and responsibility is self-evident: we are accountable to ourselves for our own actions.

The South African state stands in stark contrast to private sector institutions and individuals, although it should not be so. From the lowest rank in the public service to the president, accountability and responsibility should be just as crucial as in the private sector. But it is not. Theoretically, yes, starting with the highest responsibilities as set out in our Constitution down to the humblest by-law at, say, municipal level.

But compliance is subject to the extent to which accountability and responsibility are realised. And it does not realise spontaneously as in the private sector, where there are built-in incentives for it, as already discussed. Accountability and responsibility must therefore be enforced in the state sector.

But when the will to do so no longer exists due to institutional state decay, the vicious cycle begins: no accountability and responsibility for all practical purposes, and therefore no maintenance either. It is a vicious circle and it feeds itself. The less accountability and responsibility are enforced, the fewer reasons there are to fear the consequences of non-compliance. This gives rise to even less compliance and even greater decay.

After that, it is just a short step to the commission of corruption, which we know is endemic to our South African state sector.

Piet Du Plessis retiree with a long history of applied socio-economic development. A liberated Afrikaner who has moved beyond self-flagellation and believes that he has been freed to live out his cultural pride and values, and to proclaim them openly when appropriate.