South Africa has made remarkable progress since 1994, but our economy has recently stalled. Unemployment is rising, and over 30 million South Africans live in poverty. Investment levels have fallen, economic confidence is very low, and the country risks falling into a fiscal trap.
For the first time since the advent of democracy there is a real chance that transformation of our country may suffer significant reversals. We must act now – and act boldly, decisively and collectively – to change the trajectory of our economy and our country.
We need a new deal for jobs, growth and transformation to turn the economy around and build a more equal society. This new deal must bring together government, business, labour and civil society in a social compact for a prosperous, just society founded on opportunities for all.
This does not represent a change in policy direction: The new deal must be guided by the National Development Plan, policies of the ANC and the electoral mandate we received from our people.
It will require commitment from each of the social partners:
- Government needs to rid the State of corruption, ensure policy consistency and certainty, promote macro-economic stability, address weaknesses at State-owned enterprises (SOEs) and ensure better use of public resources in infrastructure, education and health.
- Business needs to increase investment, promote job creation and youth internships, pursue efforts to reduce wage inequality and implement the national minimum wage, pursue employment equity, transform supply chains to support emerging black businesses, ensure greater worker involvement in decision making and root out corruption, collusion and anti-competitive behaviour.
- Labour needs to promote industrial partnership, labour market stability, more effective conflict resolution, strengthening of collective bargaining, confronting of corruption and waste and improving productivity.
For the economy to recover and thrive we need to:
- Place creation of decent jobs at the centre of every policy, programme and action. The social partners need to lead a national initiative to create at least 1 million jobs in 5 years. Place creation of decent jobs at the centre of every policy, programme and action.
- Have an unrelenting focus on growth and investment. We should be targeting 3% GDP growth in 2018, rising to 5% by 2023. An immediate priority is to restore confidence among investors through urgent measures to achieve policy certainty, improve institutional stability, restore the credibility of the criminal justice system and demonstrate the political will to turn the economy around.
- Pursue meaningful economic participation for the poor. SMEs must be at the centre of industrial, trade and other policies, since they have the highest potential to create jobs. We will accelerate land redistribution in combination with systems to improve land productivity and support for new farming activity.
- Implement a macro-economic policy to promote growth and secure our economic sovereignty. Fiscal discipline must ensure resources are directed for development and not debt servicing.
- Accelerate transfer of ownership and control of the economy to black South Africans through the participation of communities, entrepreneurs and workers. Our economy must be deconcentrated, with increased competition and more SMEs.
- Improve access for all to quality, relevant education especially in township and rural schools. We need to provide free higher education for the poor.
- Revitalise and expand manufacturing capacity and stimulate demand for local goods. Our trade policy must diversify South Africa’s exports, reduce manufacturing costs and improve operational performance of Eskom and infrastructure.
- Maximise the impact of our infrastructure and boost spending on critical infrastructure to R1.5 trillion over the next 5 years. Private sector expertise must complement the capacity of the State and unlock resources, with greater focus on job creation, localisation, skills development of young artisans and engineers and small business development.
- Restore State Owned Entities (SOEs) as drivers of economic growth and social development. Private capital should be considered for co-investment or strategic partnerships. We need to explore formation of a single ‘SOE investment company’ to manage all government investments in SOEs.
- Confront corruption and state capture. Remove from positions of responsibility those individuals who have facilitated State capture, to strengthen law enforcement agencies and rebuild critical State institutions. A Judicial Commission of Inquiry needs to be established without delay, and legal and criminal action will be pursued against the perpetrators.
Through a new deal we can build an economy that benefits all. Our progress towards the vision of the Freedom Charter that the people shall share in the country’s wealth can be re-established with vigour.
There is no reason why the economy cannot be turned around and economic and social transformation accelerated with the right leadership, a competent and committed team, and a clear programme around which all social partners can unite.
Let’s seize this opportunity to confront the challenges that face us, and forge a new deal for jobs, growth and transformation.