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On the eve of the Budget Speech by the Minister of Finance, Mr Tito Mboweni, Members of the National Assembly (NA) debated South Africa’s state of economy. The debate, which was under the theme: “Transforming the Economy to Serve the People”, was moved by Mr Mbangiseni Mahlobo.

Mr Mahlobo said the debate came at an opportune time when the South African economy is faced with mounting challenges that demand swift intervention to set it on the course of recovery – to bring about inclusive growth and radical transformation, which President Cyril Ramaphosa promised in his 2019 State of the Nation Address.

According to Mr Mahlobo, the inclusive growth and radical transformation would be realised only if the majority of South Africans participated actively in the economy –and this will only be possible if the economy builds on the full potential of all its people.

To him, the Broad-Based Black Economic Empowerment (BBBEE) policy is an example of such a principle. He said while others have rejected the BBBEE which seeks to redress the imbalances of the past, the renowned Constitution of South Africa dictates that such imbalances must be redressed.

Mr Mahlobo said the BBBEE principle has been achieved through the Competition Act of 1998, which sought to redress the imbalances of the past. “This was to increase the number of historically marginalised people with an ownership stake in the economy, to redress the excessive concentration of ownership and control of the economy.”

Mr Mahlobo told Members of the National Assembly that the investments committed to South Africa to date are a demonstration of an economic turnaround that will, under President Ramaphosa, yield positive fruits in the long run.

He mentioned the investment conference which took place in October 2018 in Johannesburg, where domestic and international business pledged hundreds of billions of rands in investments over the next few years, with mining and metals group Anglo American putting in R71.5 billion to sustain its local operations.

In that conference, the media reported that Mercedes Benz pledged to invest R10 billion, while Naspers said it will put R6 billion into the local economy, and drug maker Aspen Pharmacare said it will invest an additional R3.4 billion at its Port Elizabeth plant. Paper and timber companies Sappi and Mondi announced multi-billion rand investments into South Africa to support goverment efforts at reigniting economic growth.

Mr Mahlobo also mentioned the Investing in Africa Mining Indaba which took place in February 2019 in Cape Town as a gesture of commitment on the side of President Ramaphosa to turn the South African economy around and ensure the participation of the historically marginalised South Africans.

Participating in the debate, Dr Michael Cardo of the Democratic Allaince criticised the African National Congress- (ANC) led government on transformation of the economy, arguing that transformation has enriched a few who have links to the ruling party, and excluded many who remain poor. “The truth is, the ANC cares less about serving the people. It is only interested in serving those inside its tent, the ANC insiders,” he said.

As to how to bring about economic redress and inclusive economy, Dr Cardo is of the view that the skills base needs to be widened, to transform labour laws and afford capital to those who can’t get it from the banks.

He alleged that even the notion of a developmental state has been compromised because it is now serving party political interests. “That is why the only thing the so-called “developmental state” has developed are bank balances of ANC cronies who captured and plundered state-owned enterprises like Eskom.”

Mr Nhlanhlakayise Khubisa of the National Freedom Party said the debate on the South African economy should rise above party politics. He said South Africa has in recent times been limping from one challenge to the other. One of those challenges, he said, was the effects of the increase of Value Added Tax. “This plunged the country into technical recession and many people were retrenched and others still remain out of employment.”

Mr Khubisa also highlighted corruption that is an antithesis of economic development and inclusive participation envisaged by President Ramaphosa.

Mr Mncedisi Filtane of the United Democratic Movement called for the restructuring of the South African education system to meet the needs of the economy. “This to ensure that our education prepares the youth to be research-oriented because today’s industrial world needs a labour force that is driven by creative minds, rather than to just regurgitate old theories.”

He also stated that the bureaucracy involved in establishing a small business should be done away with. And this, according to him, should be coupled with the professionalisation, rather than the politicisation of state-owned enterprises such as South African Revenue Service (Sars).

Ms Cheryllyn Dudley of the African Christian Democratic Party re-emphasised the need to value skills and experience as part of the economic turnaround strategy. She said it is the skills and experiences that must help to expand the economy in order to draw more and more people into jobs. “In this way, people will be able to move away from having to rely on government grants and to become self-reliant,” emphasised Ms Dudley.

Mr William Madisha of the Congress of the People concurred with the view that the South African economy has been sabotaged by the ruling party, and he alleged that the ruling party has destroyed the country’s economic prospects and continues to do so. According to him, the ANC has abused the moral and legitimate need for economic transformation to enrich its elite at the expense of the working class.

By Abel Mputing
 20 February 2019