The Minister of Trade, Industry and Economic Development, Mr Ebrahim Patel, tabled his department’s Budget Vote that outlined our country’s economic recovery plan that would result in job-creation to curb the rising unemployment. He tabled the Budget Vote before a National Assembly mini-plenary yesterday at Parliament.
Delivering the Budget Vote, he proclaimed from the onset that this undertaking took place during a tough economic climate of increasing uncertainty and fragility of global growth.
Minister Patel did not mince his words when he proclaimed that government and business have to “work hard to pull the economy out of its weaknesses and speed up the journey to a strong, growing economy that creates decent work and entrepreneurial opportunities”. He emphasised that for this to happen, there is a need of high growth, high employment, and inclusion economy. But there are no quick fixes in achieving that.
The government cannot rely on global growth, it has to do the hard work, he proclaimed. “The IMF (International Monetary Fund) recently revised down their forecasts for global growth in 2019. This may limit how much other countries buy from us, and what they pay for our goods,” he said.
The hope for a resilient growth forecast hinges on the government’s industrial strategy, he said. “This is one of the centre pieces of rebuilding the economy.”
Embedded in it, he pointed out, is a set of broad strategic policy frameworks to lift our country’s growth rate. “These policy frameworks are meant to stimulate specific economic activities including the promotion of technology and innovation to achieve structural change.”
But its major role is to unleash private investment and revitalise state policies to boost economic growth and inclusion, he stressed. “This is an essential part of building investor confidence and the platform for job-creation.”
But for the industrial strategy to yield any positive spin-offs, it has to be complemented by macro-economic policy, he maintained. “This includes affordable energy prices and the skills to grow output and employment, and social pacts to ensure we address social inequalities and jobs.”
Apart from the industrial strategy mix, he said, there are other economic areas aimed at expanding markets for our country’s products. “The single biggest initiative is the African Continental Free Trade Area, which will connect 1.2 billion people into a single bloc where local products will be traded between countries, with minimal tariffs.”
This opportunity would, in his view, yield positive results if our country increases the volume and address the composition of its export products. “This will see a shift from simply selling raw materials to the rest of the world and importing finished goods. As it is said, Africa does not produce what it consumes, and Africa does not consume what it produces.”
To address this, we must promote beneficiation and “engage with large trading partners like China and the EU to change the patterns of trade”.
Mr Duma Nkosi welcomed the Minister’s collective effort to grow the economy and create jobs. According to him, this would be realised if “there is an increased private investment of both foreign and local investors to support the manufacturing sector”.
He also urged that this should be supported by the Buy South Africa campaign “in order to stimulate local demand and build competitiveness of South African products to compete in the global value chain”.
He also welcomed the Minister’s initiative to strengthen trade and investment relations with the rest of Africa continent. “Developing cross-border value chains in sectors such as energy, mining, and mineral beneficiation, manufacturing, infrastructure and agro-processing would help stimulate our country’s economic growth.”
Countering the voice of hope towards economic recovery, is Mr William MacPherson’s pessimism that government has done little to stem the tide of rising unemployment and of negative economic growth. “The truth is that government has simply given up on the unemployed for whom life has become far too hard. This is a human tragedy.”
To turn the negative tide of our economy, he suggested: “Table a Manufacturing Bill that cuts corporation tax to 15%. Amend the 1978 Sugar Act to allow farmers to diversity their farms in bio-ethanol as well as becoming power producers.”
The woes of social disparities created by our ailing economy were also echoed by Mr Mkhuleko Hlengwa. “We are in a quarter of a century after our democratic elections but we were measured as the world’s most unequal country then, and we are unfortunately still the world’s most unequal society.”
Unlike other detractors, Mr Frederik Mulder threw a word of caution in the debate. According to him, the sixth Parliament marks the most critical tenure of parliamentary administration since 19194. For it is “indeed a make or break term. South African parastatals such as the SABC, Petro SA, Denel, SA Post Office, and Prasa are bankrupt while Eskom, which should be the pulse of the South African economy, is staggering. Parliament must play its oversight role in this regard or the reindustrialisation of the South African economy will remain a dream.”
A respite came to the fore when Mr Wayne Thring commended the Minister’s initiative to exploit the intra-Africa trade. “Africa is set to become the next economic growth point after China, and the protagonist role of the department in exploiting that in unlocking the potential of South African industries and businesses is commended.”
By Abel Mputing
12 July 2019
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