Despite the bleak outlook, the ANC is upbeat about job creation, Enoch Godongwana told Fiona Forde.
Johannesburg - Twenty years after South Africa won its political freedom, the ANC, like all parties contesting this election, is focused on the tricky task of delivering economic freedom.
One without the other has become a mounting source of tension in the past few years as the frustrations of the socially and economically poor reach boiling point.
Hence the heavy promise of jobs in all manifestos: the ruling party has said it will create 6 million jobs if it returns to power, while the official opposition is making a similar promise.
That’s easier said than done. Since 2008 the country has shed more than 1 million of the 2 million or so jobs that were created since 2000, a fact the opposition likes to point out is all President Jacob Zuma’s doing.
“That’s a superficial understanding,” says Enoch Godongwana, the ANC head of economic planning and policy. “It doesn’t take into account the global crisis, because of which the economy continued to haemorrhage jobs up to the fourth quarter of 2010.”
It was one of the downsides of the relatively successful emerging economy, which had the most sophisticated manufacturing sector of all economies on the continent.
“When they do well, so do we. But when they don’t, we suffer, irrespective of who’s in power.”
The country met with a similar fate in 1996 when the Asian crisis hit.
Only then, the economy was in a worse state, reeling from the late apartheid years, its uncompetitive nature and shrinking size, and it was struggling to cater for the new and unskilled workforce that 1994 brought with it.
The added complication today was rising labour costs in a sector such as mining, which could force companies to mechanise and cut more jobs.
“That’s something we have to watch very carefully. But if you look at our infrastructure plans, what we are saying is capital goods, such as equipment and machinery, should be manufactured locally to create more jobs. And we are talking to the mining sector about that.”
And yet, when the Gautrain was launched, the required trains and feeder buses were shipped in from overseas.
“That was a mistake. We are now putting a centralised procurement system in place to deal with projects of that magnitude in future to ensure the local economy benefits.”
Mining was the backbone of the economy but the sector had been in crisis, or the next best thing to a crisis, for a number of years.
While it was still a key sector, along with manufacturing and agriculture, in the past few years the service sector had been the fastest growing of all.
Yet it hadn’t managed to curb the high unemployment rate, with the official figure sitting at 25 percent.
Or, to look at it differently: there were only 6.4 million taxpayers out of a population of 52 million.
What will unemployment figures be like in 10 years?
“We are looking to 2030 when unemployment will sit at about 6 percent (according to the outlook in the National Development Plan),” said Godongwana.
Isn’t that highly unlikely?
“There’s a caveat. There is one sector that is coming to stream, whose impact on the future has not been assessed, because it is still immature at this stage, and that’s the oil and gas sector. We’ve got all the big companies you can think of in the world exploring on our coastline at the moment.
“It’s the kind of potential that could be a game changer.”
A self-described “economic activist”, Godongwana is a former secretary-general of the National Union of Metalworkers of SA.
He was also a former deputy minister of economic development, having stepped down in 2012 after a scandal that implicated him and his wife in the disappearance of millions of rands from the SA Clothing and Textile Workers’ Fund pension fund.
It was another example of the kind of corruption and fraud that eats into economic potential. Does he feel any remorse for that?
“I said in the inquiry that I was I invited to join the company in question and that I didn’t know the extent of the problem. If I had known, and with my labour background, I would not have become involved. For that I have remorse.
“But even though there are no criminal charges against me, I stepped down from my post because I didn’t want to bring it into disrepute. In that regard, I think that’s unprecedented.”
Though he resigned from the government, he retained his position as head of the ANC’s economic planning team, a grouping he has belonged to for 16 years and which today includes Tito Mboweni, Pravin Gordhan, Susan Shabangu, Ebrahim Patel, Malusi Gigaba and others.
Together they are responsible for a lot of current and future economic activity. But who exactly runs the economy?
“On the macro side, the Treasury is the driving force and it works very closely with the (ANC’s) economic committee and implements our plans.
“And then on the industrial and productive side, you have the Department of Trade and Industry.”
There was a sense in 2008 that the slate was wiped clean and all that was put in place by Thabo Mbeki’s team was wiped out, yet it was all in the name of the ANC. Was there ever a cost figure put on that overturn?
“What was working was kept, even from the (former president) Mbeki period. So any cost incurred was necessary.”
Was the cabinet enlarged unnecessarily in 2009?
“There is a huge segment of people who think that they need special attention and that voice is vociferous,” he said of the Department of Women, Children and People with Disabilities.
Was it really necessary to create the Department of Economic Development?
“My view is that you have the Department of Trade and industry, which is huge. If you had a (sub ministry) dealing with international trade and another dealing with domestic trade, call it economic development, it would work. But that’s a personal opinion.
Have you been asked for your opinions before the formation of the new cabinet?
Are you satisfied that your average ANC voter understands the party’s economic thinking?
“They may not feel they understand the decisions we make, but they feel the impact of them, if they are a recipient of a house, of electricity, of a job or whatever.”
By that logic, would the unemployed not be feeling the negative impact of your failed policies?
“Yes, but there is a minimal number of people who are either not in employment or not in the grants system.”
“It’s difficult to say, but if you look at the Goldman Sachs study, they argued that 13 million people would have been trapped in poverty if it had not been for the social grants.”
Has the nationalisation debate been put to bed?
“It’s over in the manner in which it was presented (a few years ago by Julius Malema). Whether we nationalise or privatise depends on the balance of evidence.”
How important are the ANC’s economic policies for achieving a majority on May 7?
“People who think our supporters only vote for us out of love or colour are mistaken. They vote for us because we are providing housing, electricity, better lives, jobs.”
Will the ANC manage to poll above 60 percent?
“It’s difficult to say. The campaign is just picking up now.”