The National Treasury needs sophisticated ways to collaborate with institutional investors
Opinion / 31 October 2019, 09:30am / Miyelani Mkhabela
JOHANNESBURG – Being innovative also may include applying a known solution in a new way that will start changing the current structure of the South African economy. The neoliberal policies will not change the structure and expand the South African economy.
South Africa needs a New Economic Plan that will focus on manufacturing of construction, infrastructure, mining materials and most of the household consumption products that South Africans uses every day. We must be very conscious in building our industries and that will be a legacy for the generations to come. This will also demand the government to use its specialist skilled human capital to help the government in many different ways.
The revised GDP to 0.5% needs all of us to reflect as to how can this problem be solved, we can only create jobs when the economy is growing at four to five percent and we need to assure investors on how to move from this pit.
We are blessed with natural resources, let's collaborate with nations that are willing to have Foreign Direct Investment in South Africa- we must change our negotiation style, South Africa is a global leader in many resources and its 25 years after democracy.
Minister Tito Mboweni has presented a rich picture of our economic challenges but he was unable to clearly unpack how the economy will be a turnaround to create jobs to swallow the 10 million unemployed South African and repaying the R3 trillion debt.
Our government needs more human capital that will assist in solving more complex challenges and also managing the captured state-owned enterprises. This will need capable and highly discipline human capital that upholds servanthood and reflective leadership.
The Ministry of Finance as the heart of South Africa’s economic and fiscal policy development has focused on fiscal sustainability with several options of reducing wasteful expenditure and reducing the public sector cost by the 29000 public servants, members of parliament, members of national executive, members of provincial executive that he indicated they became millionaires which is more than double the number of civil servants earning more than a million rand in 2006 and 2007.
There is consensus on potential strong economic growth across Africa including South Africa but also an agreement that the environment is volatile, Uncertain, Complex and ambiguous with turbulence and change constantly present.
The minister of finance with all environmental uncertainty and complexity, he should have focused on manufacturing investment commitment that will turnaround the economy in 24 month period to stimulate growth and create sustainable jobs. The future of South Africa is on manufacturing, economic strategy starts with what you have a competitive advantage over then mix with other aspects that you might not have an absolute advantage over.
Global investors and institutional investors need to see the commitment and the national treasury can use small wins to prototype strategic initiative so we see where we are going and when we are winning to reclaim our space in manufacturing.
The 4% fall of the rand sends a message that investors are not welcoming this Medium Term Budget Policy Statement.
The next Finance minister is already in a trap of an anticipated debt likely to exceed 70% of GDP by 2022/23, the debt that exceeds three trillion rands is complex to repay while SOEs continue to be an ICU burden of government allocations.
We are not seeing the signs to advance economic growth and development and to strengthen South Africa ’s democracy through the inclusion of the 10 million South African that are not prioritized through decent jobs, including youth that has a desired projected poverty lifestyle accounting to 55 percent.
The national treasury needs to get back to its fundamental mission statement responsible for coordinating macroeconomic policy and promoting the national fiscal policy frameworks to benefit all South Africans, mainly by expanding this economy, by chance the SA economy grows by three to four percent, the structure will deliver an undesired high levels of inequality as the economic structure is only feasible to serve the very rich of this rainbow nation.
As economist reformist and determinist, we know that our economy is experiencing a catastrophic crisis however the national treasury must exhibit multiple innovations and collaborations to serve the economy this 6 to 12 month.
We need to work hard as a nation to assist the economic cluster as we don't have any other country to go to, what we have is this struggling economy that we must all work together to rescue by helping in speaking good about the country, raise capital to assist in building a huge pool of small businesses and in managing the budget preparation process and exercises control over the implementation of the annual national budget, including any adjustments budgets that their forecasts will prescribe.
Tito Mboweni remains a national treasury acumen that we trust as citizens because of his sound discipline in financial management, however that alone is not enough, the country needs to create jobs and we believe less neoliberal structural reforms that assisted countries like China, can help South Africa.
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Miyelani Mkhabela is an economist and director at Antswisa Transaction Advisory.