PETER ATTARD MONTALTO: Consequences and accountability: the world is watching SA

One of the great focus points of the post-2017 period was a hope for consequence management and accountability. Indeed, it was a pillar of the expectations of many that this would be a route towards higher potential growth in the economy. While electricity, logistics and other problems were taking time being reformed, so the theory went, it was possible for animal spirits to be unleashed by seeing people in orange overalls.

Unfortunately, growth doesn’t quite work like that, and the electricity and logistics crises far outweigh any shifts in momentum by the National Prosecuting Authority (NPA). In fact, it was unfair on the NPA; that they couldn’t somehow lift animal spirits is not an indictment on them — and misses the point that much has been happening on that front despite limited capacity.

Perhaps if we are lucky some orange overalls eventually will provide a kicker if other problems are being solved, but this seems an odd place to focus on moving the dial. It’s also very backward looking. As much as historic injustice needs to be investigated by both the criminal justice system and the media, preventing crimes is arguably more pressing. That’s not to say the two aren’t linked — after all, harsh sentences for crimes sends a clear message to would-be perpetrators.


The lack of accountability for the July 2021 unrest still plays on the minds of investors and businesses. One of the most regular questions I get asked by investors and corporates is whether it could happen again. The questioners rightly muse that the lack of accountability to date surely means the chances are higher than they would otherwise be.

Greylisting by the Financial Action Task Force has led to plenty of analysis — including the insights we at Intellidex offered in our recent report — but there is a deeper narrative of SA suffering the consequences of its historic, deliberate actions. The pitfalls of inappropriately labelling politically exposed people was fully and publicly exposed during the Zuma administration years, and yet the current course was taken. Many people have wondered how we came to an 85% probability of greylisting; it is simply the subjective sense that consequences are far more likely than not to catch up with SA when you go through the greylisting criteria line by line.

One wonders, however, if policymakers and politicians understand the accountability at play here. There is the opportunity to change things quickly — not necessarily to prevent greylisting, but to get removed from it as quickly as possible, within one year. A key finding is that foreign banks will give SA more benefit of the doubt if there is a sense the country will be off the greylist within a year.

The sense of a lack of consequences (until it’s too late) that so often pervades the economic policy space perhaps explains why the political economy seems happy to trundle along. Eskom and load-shedding are, of course, the primary example. However, on one front the historic inaction is finally coming home to roost, with the consequences finally being swallowed in this month’s medium-term budget policy statement — most likely as the Treasury finally commits to the obvious and takes over roughly half of Eskom’s debt. While that may well be a technocratic triumph, we should not forget it is a failure of Eskom and of the management of state-owned enterprises.

SA often seems to struggle with the idea of consequences coming from unexpected quarters. The increasing focus of the EU, individual investors and companies on the carbon intensity of SA’s exports, for instance, is treated with suspicion and conspiracy theories of colonialist intent. Yet it simply is what it is — a set of stakeholders have decided to treat everyone the same in terms of how countries and their economic products are judged, and SA risks falling foul and suffering the consequences.

One might also mull over the consequences of SA’s stance on Russia at last week’s vote at the UN. The government has the right to pursue whatever foreign policy it wants, but it should at least be ready to be held to account by others for such choices. It might not be long before European and US taxpayers and politicians start asking questions about providing climate funding based on a country’s foreign policy. When you are in competition with a country like Indonesia on the climate funding front, every little issue might count.

After Eskom, attention is about to focus a lot more on Transnet and the public-sector wage bill more broadly. Choices made now to solve short-term problems could have much better consequences down the road.

What is the lesson here? First, eyes-open policymaking that understands the full consequences of actions from all stakeholders. Too often this is ignored — be it trade, energy or industrial policy. Second, just because consequences don’t catch up with you straight away doesn’t mean they aren’t brewing and ready to jump out and kick you in the backside. 

The big question from investors and corporates now though is whether a system that appropriately deals with consequences and accountability might emerge from the ANC’s December elective conference and the 2024 elections. The latest drama in the metros seems to suggest not — though the road to 2024 is still quite long.

• Attard Montalto is head of capital markets research at Intellidex, an SA research-led consulting company. This article first appeared in Business Day.