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Transformation needs to be accelerated, Radebe asserts

Minister in the Presidency Jeff Radebe

Minister in the Presidency Jeff Radebe

6th October 2015

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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With a mixed picture of progress over the past 20 years, Minister in the Presidency for Planning, Monitoring and Evaluation and National Planning Commission chairperson Jeff Radebe on Tuesday said more should be done to accelerate transformation and the role black business could play in navigating a stagnant economy.

Speaking at the Black Management Forum’s annual general meeting, he said the economy had not grown fast and wide enough during the post-apartheid period, which, in addition to the impact of the global financial crisis, had retarded social and economic transformation.

The combination of poor economic performance, a high unemployment rate and concentration of asset ownership in a few hands, besides others, accounted for the high level of income inequality in South Africa.

“We should pay greater attention to the factors that have limited the capacity of our economy to grow. Many of these are well known and have been analysed at length in a number of publications, including the National Development Plan (NDP),” he said.

“It is this reality of the persisting triple challenges of unemployment, poverty and inequality that defines radical socioeconomic transformation as the content of the next phase of the struggle, for which the NDP constitutes the roadmap.”

The ownership and management profile of the economy needed to be transformed to reflect that of the broader South African population, with black entrepreneurs and black business and professional formations required to play a leadership role in the NDP implementation process and economic growth.

However, while the number of black senior managers increased from 18.5% to 40.1% and the number of black top managers from 12.7% to 33.3% between 2000 and 2013, progress had been “disappointing” in terms of ownership of companies.

He cited the JSE’s estimate that black ownership of the top 100 companies reached 23%, including indirect ownership by pension funds and empowerment schemes.

Further, the black middle-class had been the fastest economically progressing segment of the South African population, rising from 1.7-million individuals in 2004 to over 4.2-million currently; however, the number of jobs created lagged, with the rate of unemployment rising from 23.9% ten years ago to the current 26.4%.

“In this context, investment in infrastructure and capital procurement by State-owned companies remain of paramount priority, as both drivers of growth and enablers of transformation,” Radebe pointed out, adding that key to bolstering investment demand and economic activity was building infrastructure and providing related services.

“Our perspective is that in procuring a product or service, government and our State-owned companies must simultaneously and more explicitly be procuring a process of industrial development and black economic empowerment,” he concluded.

Edited by Creamer Media Reporter

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