EDITORIAL: Ebrahim Patel joins the crisis denialists

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Ebrahim Patel’s idea of a sovereign wealth fund shows the government is burying its head in the sand

04 July 2019 - 05:07SA politicians are probably not unique in their tendency to stick their heads in the sand and have outlandish dreams, when the other option is to deal with everyday problems.

While it’s good to dream big, for most of us having functioning schools, hospitals that have needles and clean bedding, and a police service that effectively serves communities will do for now. From the information we have, things are getting worse. GDP shrank more than 3% in the first quarter, making it unlikely that we’ll manage a growth rate of above 1% in 2019. And that also means the government will likely miss its 2019/2020 budget deficit forecast of 4.5% of GDP, which in itself would be the widest since 2010, just as Jacob Zuma’s reign of destruction was starting to take shape.

This has been justified on the ground that the utility, which supplies virtually all SA’s electricity, is too big to fail and that rescuing it will at least ensure the economy generates some growth. It is hard to argue against that. And in the middle of this, you have trade & industry minister Ebrahim Patel telling the nation that we have an urgent need to set up a sovereign fund to stash all the excess cash that we don’t have, and are unlikely to have soon.

 

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