Frontline Africa Advisory

In These Tough Economic  Times, All Ideas Welcome

In These Tough Economic Times, All Ideas Welcome

On the 28th of August, Finance Minister Tito Mboweni released a 77-page document titled Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa for public comments until the 15th of September 2019.With the document, Minister Mboweni and the National Treasury sought to create a new conversation to assist in tackling the country’s triple threat of stagnating economic growth, rising unemployment and high inequality.

Since the release of the paper, Minister Mboweni and his document have received some praise and under heavy criticism from labour and business organisations. The Black Business Council criticised the paper for lacking inclusivity, specific detail and ambition. According to the organisation, Mboweni’s paper misdiagnoses the problems of South Africa and prescribes the wrong medicine. Trade Federation the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) were left particularly aggrieved by the supposed deviation from consultation processes by Minister Tito Mboweni without inputs by the National Economic Development and Labour Council.

COSATU’s substantive inputs criticised the proposals for a limited focus on micro-economic reforms instead of macro-economic policy changes that could ignite growth. In the Federation’s view, the paper closely mirrors the key tenets of the Growth, Employment and Redistribution framework sprung on South Africa by the African National Congress (ANC) in 1997; or what the Federation calls the 1997 class project. Mboweni’s association with this project in the late 90’s makes his current position as Minister of Finance particularly unpalatable as he is seen as part of the grouping in the ANC that is seen as having sold out workers to market forces.

Business Leadership SA (BLSA) has thrown its weight behind Minister Mboweni’s plan. In the organisation’s view the document “is the catalytic instrument SA desperately needs to move beyond a national debate to take concrete steps to re-ignite growth urgently. It disrupts the current narrative and helps us focus on things that really matter for SA,”. The Democratic Alliance (DA) welcomed the growth plan and saw it as a practical and positive step in the right direction for South Africa’s economy.

Though the contents of Minister Mboweni’s plan have divided opinions and received both praise and criticism, one must at least acknowledge his attempt at sparking a conversation that will lead to finding solutions to the current economic crisis we are facing. For over a decade, the country has been faced with stagnant growth that has led to huge increases in unemployment, poverty and inequality. It is a time for ‘business unusual’ and every effort or idea aimed at reversing the current downturn should be welcomed and entertained to at least die on the discussion table if needs be. However, what we should not do is dismiss any idea brought forward, simply because the right procedure was not followed.

It has been refreshing to see government and the ruling party show some enthusiasm to the document and affording it the platform to be discussed at length. Cabinet discussed the paper at an extraordinary extended Cabinet meeting of all Ministers and Deputy Ministers. The ANC’s National Executive Committee held extensive discussions on the paper and even endorsed parts of the plan. This is a positive step. One hopes that with the discussions and debates that have taken place, we will arrive at a point where we start discussing tangible implementation plans and timelines to get the country back on track.

President Ramaphosa has stated overtime that to get the country out of the quagmire it is in, a collective effort will be needed from all sectors of society. That essentially means that no idea should be dismissed without being given the necessary platform to be deliberated upon, modified if needs be or simply discarded if it seems impractical. We cannot keep repeating the same mistakes that have led us to the current situation and expect different outcomes. That would be stupid, to paraphrase Albert Einstein.

Written by Calvin Matlou

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