South Africa on Slippery Slope, Ex-Deputy Finance Minister Warns

(Bloomberg) -- South Africa is in a precarious state and urgent action is needed to stabilize its finances, according to former Deputy Finance Minister Mcebisi Jonas.

“Our political and economic problems are chronic,” Jonas told the Cape Town Press Club on Monday. “Our problem is that as we decline, we under-deliver. As we under-deliver, we generate more social and political discontent.”

South Africa is struggling to recover from the nine years of policy missteps and rampant corruption that characterized former President Jacob Zuma’s rule. While Cyril Ramaphosa, who succeeded Zuma in February last year, has sought to tackle graft and revive the economy, the country is contending with a 29% unemployment rate, a debt-stricken state power utility that’s draining state coffers and mounting public discontent over a lack of jobs and basic services.

Jonas, who served as Zuma’s deputy finance minister from 2014 to 2016 before being fired, alleged three years ago that members of the Gupta family offered him a bribe and the finance minister’s post in exchange for furthering their business interests -- a proposal he rejected. The Guptas were friends with Zuma and have been linked to numerous cases of corruption at state companies. They and Zuma deny wrongdoing.

Jonas 59, who will join telecommunications company MTN Group Ltd. as chairman in December, said he still has hope that the country can get back on track.

“My theory is that we are not going to get a major blowout, like you have in Venezuela,” he said. “We need to bring back growth and refocus ourselves as a country. We need to go back and find each other as a nation.”

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Hilton Shone

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