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Economic action plan a rehash of past policies - EFF

Jul 14 2017 19:31
Lameez Omarjee

Johannesburg – Government’s 14-point action plan to revive the economy is a rehash of past policies that have led to the current crisis, said the Economic Freedom Fighters (EFF).

The EFF issued a statement in response to the plan, announced by Finance Minister Malusi Gigaba on Thursday. It includes 14 action items, with a deadline and a minister to oversee it. The plan was drawn up following engagements with the president, several ministers and stakeholders such as ratings agencies and investors who raised their concerns.

The plan seeks to restore confidence in the economy. Among the proposals include the finalisation of the mining charter, the implementation of broader reforms and the partial privatisation of state-owned enterprises like SAA and Eskom as well as addressing fiscal policy concerns.

READ: Gigaba unveils 14-point action plan to revive economy

But the EFF says the plan entrenches neoliberalism. “At the centre of the plan is a misguided notion that South Africa solution to poverty, unemployment and inequality is business led inclusive growth,” the statement read.

The EFF criticised the plan for not being different to former finance minister Pravin Gordhan’s plans. “The plan is a repetition of his plans and macroeconomic logic.”

The EFF said that the sale of non-core assets at SOEs in essence is the transfer of assets to the “politically connected” few. The party also said that the recapitalisation of SAA and the South African Post Office was simply another “bailout” for these “mismanaged” entities.

READ: Partial privatisation of SOEs on the cards

“If anything, the plan is a Gupta faction plan that is trying to mislead South Africans into thinking the ANC is working on an economic recovery plan when it is not,” the EFF said.

Gigaba told reporters on Thursday that an extensive discussion on Treasury’s audit of assets will be held at Cabinet level. He emphasised that strengthening the balance sheets of SOEs is needed to create social stability.

Gigaba added that government guarantees will also be addressed and consequences for failure to comply with guarantee conditions will be set by Cabinet. “I have raised concerns that the government guarantees need to strategically be used to support infrastructure, investment and capital expansion rather than to finance operations and losses and inefficiencies in the SOEs,” he said.

ALSO READ: Economists underwhelmed by Gigaba's economic action plan

Analysts also criticized the plan of not being profound or different to existing plans. Investment analyst Chris Gilmour said the plan was “business as usual” and something more profound was needed to ensure growth of between 3% and 6%.

Democratic Alliance MP David Maynier said the plan did not have “one big, bold, new idea”.

The minister was commended for the tight deadlines which were set.

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