Media release: Flying the rich is now not only at the expense of the poor, but of the sick and vulnerable in society
7 January 2021
Government's first duty is to protect the rights of citizens. Instead, ours has prioritised yet another bailout of R10.5 billion for the failed South African Airways (SAA), with a further R6.5 billion in the pipeline. This while citizens die in hospitals lacking basic personal protective equipment, staff and oxygen supplies, and there remains no vaccine on the horizon.
It is obvious now that government has no substantive plan – nor funds – to vaccinate the majority of South African citizens; yet the same government wants South Africans to believe it can deliver a state-run National Health Insurance scheme, providing universal healthcare access for all. Looting of funds scraped together for the COVID-19 crisis, and corruption and mismanagement in state-owned entities (SOEs) have left the fiscus struggling to pay for vaccines. South Africa has fallen well behind its peers in the vaccine rollout queue.
Government's COVID-19 vaccine rollout plan contains minimal implementation details and lacks clear timeline commitments. This illustrates how far behind the curve government truly is. There can be no doubt that the country's perilous fiscal situation (for example a debt-to-GDP ratio that will hit 100% by 2023) has placed the government in a weak negotiating position to secure, and then roll-out, a COVID-19 vaccine.
Years of misguided policies and 'priorities', as well as serious financial waste, corruption and mismanagement, have placed the South African government in the position where it is struggling to secure a vaccine. With bailout after bailout for failing state-owned enterprises such as SAA and Eskom, underpinned by the ideology that the state should be central to all economic activity, there can be no surprise that the South African government does not have the financial strength to expedite the procurement of a vaccine. According to BusinessTech, "Pfizer Inc. and BioNTech SE offered to supply South Africa with their Covid-19 vaccine at a discounted $10 a dose, yet the president’s office still described the cost as prohibitive."
As of November 2020, Eskom's debt stood at over R488 billion, much of which is guaranteed by the state. SAA will need far more than the current R16.5 billion to operate. Years of a state-enforced monopoly in electricity, and attempts to keep vanity project SAA flying, have hollowed out the fiscus. Almost all other SOEs stand in line, cap in hand, for taxpayer money.
FMF Project Manager Chris Hattingh said, "Reality cannot be changed by mere pleading and wishing. COVID-19 is exposing years of misguided government ideology and policy. Despite repeated warnings, government persisted with throwing funding at SOEs that had no realistic hope of turnaround, and neglected to provide the poorest in society with basic necessities such as running water, ablution facilities or a decent education."
Hattingh added, "Government has a choice: either learn from the crisis and reprioritise what little SA has left in the coffers on basic service delivery, property title deeds on a wide scale, and providing healthcare services for people who cannot afford them. Or continue down the path of increased state control, suffocating the private sector, allowing looting and driving the country down a cliff at breakneck speed."
Only by adopting the policy proposals the FMF has championed for 46 years and thereby creating an environment conducive to growth, employment, and prosperity, can South Africa ever hope to be in a position to respond more rapidly and effectively to crises such as COVID-19.
Publish date: 07 January 2021
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.