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Johannesburg – The ANC’s 54th National Conference raised eight key economic issues which need to be addressed in the near future.
Several ministers, including Finance Minister Malusi Gigaba, Economic Development Minister Ebrahim Patel and Small Business Development Minister Lindiwe Zulu, Minister of Trade and Industry Rob Davies and Minister in the Presidency Jeff Radebe addressed the conference’s Progressive Business Forum breakfasts over the past five days. They all spoke on the economic future of South Africa, and highlighted areas which need attention.
Representatives from the ANC also briefed media on Wednesday on the outcomes of several commissions which also had raised issues concerning the economy.
Fin24 compiled a list of the priorities.
1. Inclusive economic growth
Economic growth which needs to be inclusive, was the mantra throughout the conference. Gigaba stressed that growth without economic transformation is unjust and that in turn transformation without growth is also self-defeating. Perhaps the budget 2018 will provide more details on what initiatives for inclusive growth may look like.
2. Partnership with business
Gigaba also acknowledged the role of the private sector in driving economic growth, as did Radebe who commended collaborations such as the CEO Initiative as being imperative in boosting needed growth and investment.
Patel also called for South Africans, business, labour and government to work together to achieve higher levels of growth. This collaboration requires more than just investment but larger businesses developing smaller businesses and equipping them with needed skills.
Nedbank CEO Mike Brown has already pledged his commitment to work with newly elected ANC president Cyril Ramaphosa. It is yet to be seen what these collaborations will yield.
3. More power for competition authorities
We also heard how concentrated markets stunt economic growth, innovation and investment and that it is associated with high levels of inequality. According to Patel, passing a law to deconcentrate markets, is not the solution. Instead competition authorities should be given more power to hold inquiries to evaluate if the concentration is anti-competitive, prevents the inclusion of black South Africans to participate in the economy and if it has a negative impact on the operation of small businesses.
During a briefing on Wednesday the ANC’s Nathi Mthethwa also said that monopolies can be disciplined by strengthening competition authorities.
Time will tell if the Competition Commission will get more teeth.
4. Youth unemployment
Patel and other ministers noted the high levels of youth unemployment and the need to develop skills and training among the youth to equip them especially for the rise of the digital revolution, especially given that the South Africa’s unemployment rate is at 27.7%.
The Youth Employment Scheme is one of the projects of the CEO Initiative which will provide job opportunities for young people, there is still scope for more of these projects.
5. Restructure the economy
Gigaba had spoken to how the economy needs to change from being one that is an exporter of primary resources, and rather be one that is industrialised and incorporates beneficiation and develop the rest of the value chain.
Currently South Africa exports raw materials and imports finished goods. There are opportunities to develop the agro-processing sector. The Reserve Bank has time and again said that economic growth requires structural reforms.
A lot of this work requires undoing the economic structures of the apartheid past. South Africa has been a democracy for 23 years and this still hasn’t happened.
6. Fourth industrial revolution
Davies raised the issue of the fourth industrial revolution and the importance of embracing it. He warned that if we do not, we will lose the opportunity to use it as a force for good.
One could argue that we need to get the basics right, such as the literacy rate. Recently, the Progress in International Reading Literacy Study revealed that 78% of grade 4 learners did not understand what they were reading. At the same time we have to innovate or risk falling behind as the rest of the world moves forward.
7. Small business development
Small businesses can be a force to drive the economy forward, this was emphasised by Zulu. But small businesses have a number of barriers, besides access to funds as well as mentorship and support. We will be keeping close watch of the minister’s department which she said was “fully fledged” and functional. In the same breath Zulu added that her department was still young.
Among her plans is to propose a Small Business Development Act. Past experience of how legislation is enacted in this country signals that it could be a while before anything comes of this. But Zulu added that the EU would be providing support. Details will be announced next year.
8. Taking a stand against corruption
Whether it be in public sector or the private sector, corruption needs to be uprooted. President Jacob Zuma himself called out corruption in the private sector which has been treated with “kid gloves”.
Gigaba also shared views that corruption within the private sector must be addressed. Equally he spoke on the importance of cleaning up governance at state-owned enterprises, which have translated into a drag on the fiscus.
The #GuptaLeaks have created a stir in 2017 and in his closing address at the conference Ramaphosa made strong calls for corruption to stop.
“Whether we call this state capture or simply corruption, this has undermined the integrity of our institutions, cost our economy hundreds of billions of rands and contributed to the further impoverishment of our people,” he said. “This conference has resolved that this must be acted upon and stopped. Corruption has to be stopped and it must happen with immediate effect."
We wait with bated breath to see what accountability looks like.
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