Former African National Congress (ANC) treasurer-general Mathews Phosa made a forthright appeal on Thursday for the creation and implementation of a credible economic strategy, centred on growth and job creation, rather than “vague, ill-timed, conflicting and populist” policies.
Speaking at the Steel and Engineering Industries Federation of Southern Africa’s (Seifsa’s) fourth annual Metals and Engineering Indaba in Sandton, Phosa said South Africa was in “serious trouble” and that the proposal for land expropriation without compensation was “dangerous” for job creation and investment.
"While I fully support a measured well-defined process to right the scandalous wrongs of the apartheid past, populistic, vague, confusing and conflicting announcements about the expropriation of land is a dangerous addition to the cocktail of job losses, a shrinking economy and social instability."
He said “decisive leadership” was required by government to ensure the creation of an economic strategy that would improve, rather than undermine, the country’s growth prospects. The strategy should be implemented in collaboration with the private sector and with a firm acknowledgement from government that “business is not the enemy”.
Phosa was speaking the day before the release, by President Cyril Ramaphosa, of details of a stimulus package for the struggling South African economy, which is currently in recession.
The strategy, Phosa said, could also no longer ignore the “sorry” and “embarrassing” state of the country’s highly indebted State-owned companies, such as Eskom and South African Airways. These entities, he argued, should be restructured and, in some cases, sold to private investors.
On recent reports that some in the ANC had met at “coastal hotels” to plot against Ramaphosa, Phosa said that the only plot that should be supported was one that brought together well-meaning South Africans to grow the economy. He quipped that he was qualified to comment, having himself been accused of being part of two previous plots against sitting Presidents.
Phosa's sentiments were echoed by several other speakers at the indaba, held in the absence of high-level representatives from government. In fact, Seifsa CEO Kaizer Nyatsumba was scathing in his criticism of some in government’s continual snubbing of the gathering, which he said was “deeply concerning”.
“I cannot think of any occasion where a Mineral Resources Minister has failed to attend a Mining Indaba,” Nyatsumba said, adding that invitations to various government leaders, both national and provincial, were either ignored or declined at the eleventh hour.
WHERE IS BUSINESS?
Calls for more assertive economic leadership were made from several other participants at the indaba, with Centre for Development and Enterprise executive director Ann Bernstein arguing that business also needed to play a more muscular role.
Bernstein described business as “missing in action”, which was resulting in the economic and policy agenda being driven by dangerous populist rhetoric. She was particularly critical of business’ “subdued” response to the proposal for changing the Constitution to explicitly enable land expropriation without compensation.
“Where is the voice of business?” Bernstein asked, adding that business was also failing to make the case of the key reforms needed to accelerate growth, investment and job creation.
Solidarity general-secretary Marius Croucamp said there was an urgent need to counter the populist rhetoric and to place the country back on a growth trajectory. “We need to govern for the next generation, not the next election,” Croucamp mused.
However, Business Unity South Africa (Busa) CEO Tanya Cohen reported that business was active, mostly through the National Economic Development and Labour Council, in seeking to address the policy and management impediments to investment.
She highlighted some progress, including the release of the draft Integrated Resource Plan for electricity, but said that in areas where businesses required licences from government to operate, serious logjams persisted. “Water licences take five years to secure.”
Nevertheless, Busa was supportive of government’s convening of summits on jobs and investment, which are scheduled for October. Cohen said the summits would help in unlocking key policy constraints, as well as key catalytic projects. In addition, they should assist in offering a more coherent narrative around South Africa’s economic policy and strategy.
Speaking during a later panel discussion at the indaba, Minister in The Presidency Dr Nkosazana Dlamini-Zuma said that the National Development Plan (NDP) remained a key guide for the direction South Africa should be taking, despite the fact that its targets were currently not being met.
She also indicated that, despite the stimulus package, government would not be deviating materially from the NDP. Instead, the stimulus package was a signal of government's intention to show leadership in extricating the economy from its current predicament.
"The [stimulus] plan is not the panacea," she said.
In a statement released following its September 19 meeting, Cabinet also welcomed an offer extended by business for the secondment of private-sector professionals to government. The offer was made during a preparatory meeting held by Ramaphosa with business leaders, special investment envoys and the CEO Initiative, ahead of the upcoming Job Summit and Investment Conference.
“The meeting agreed that South Africa’s economic recovery demands urgent implementation of the stimulus package and promised growth-enhancing reforms. Proposals were also discussed to establish an infrastructure-development initiative that draws in private-sector funding and delivery expertise,” Cabinet said.