The Democratic Alliance (DA) wants Minister of International Relations and Cooperation Ronald Lamola to account for what it describes as the continued promotion of the African National Congress’s (ANC’s) “failed economic transformation policies”, arguing that it strangles South Africa’s economic growth agenda internationally and deters foreign direct investment (FDI).

The party said while it “deeply understands” the crucial importance of economic redress, policies such as broad-based black economic empowerment (BBBEE) have been “repeatedly proven” to be ineffective in achieving it.

DA deputy spokesperson on International Relations and Cooperation Ryan Smith noted that last week, during the Black Business Council summit, Lamola made a rallying call for black professionals to “defend the revolution”.

“…as if organised business is somehow beholden to prop up and defend ill-conceived ANC policy and legislation, despite empirical proof that they continue to drive away FDI and destroy jobs,” said Smith.

He said Lamola’s comments ran contrary to the Government of National Unity’s Statement of Intent, which outlined rapid, inclusive, and sustainable economic growth as a key item on the basic minimum programme of priorities.

“…at a time when South Africa has an immense window of opportunity to attract FDI and reinvigorate economic development through our G20 Presidency, Minister Lamola’s comments are reckless and ill-informed, and risk derailing what should be a key moment for our economic diplomacy efforts,” Smith said.

As an example, he pointed to his party’s proposed Economic Justice Policy, which he explained used poverty as a proxy for disadvantage and not race, to ensure that redress and aid were targeted to the citizens who truly needed it, “instead of further entrenching a system of re-enrichment for the politically connected elite”.

He further noted Wits School of Governance’s Professor William Gumede’s recent statement, in which he said under BBBEE, conservatively R1-trillion had been moved between less than 100 people since 1994, ensuring that the same people had been empowered and re-empowered over and over, and locking millions more citizens out of opportunity and into an endless cycle of poverty and despair.

“In addition, a 2008 study by the University of Pretoria, in which quantitative research was conducted to compare FDI inflows into South Africa with that of other emerging economies of a similar level of development, such as Brazil, Mexico, Chile, Nigeria, and Botswana, makes it clear that the ANC’s economic redress policies severely hamper our FDI drives. The research presents a stark indication that policies such as BBBEE impact on South Africa’s capability to attract FDI, while demonstrating that our country is losing competitiveness in attracting investment on the continent,” Smith said.

He accused Lamola of ignoring the evidence disproving the efficacy of these policies, as the Minister continued to call for their promotion and defence and argued that this signalled to the international community and investors that South Africa remained questionable as an investment destination.

“We cannot afford to continue down this path in the face of stagnant economic growth and ever rising unemployment. We call on Minister Lamola to take seriously his role as the face of South Africa’s economic diplomacy agenda and embark on an evidence-based approach to FDI initiatives,” he said.