Photo: Siphiwe Sibeko/Reuters
Photo: Siphiwe Sibeko/Reuters

The market is not a panacea for all South Africa's ills

By FAIEZ JACOBS Time of article published Dec 27, 2019

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This has been a difficult year for South Africa.

While we celebrated our 25th year of democracy and sixth democratic elections, the economic gains a decade after the global financial crisis remains sluggish. In fact, the economic situation has overshadowed these celebrations.

According to the website Trading Economics, South Africa’s growth rate this past year was less than 1% - far from the 5% to 10% growth rate envisaged by the National Development Plan. The contraction in the economy can be attributed to the contractions in our key industries such as mining, manufacturing, transport, storage and communication.

Transport, storage and communication fell by more than 5% in the past 12 months. These are key industries in a tertiary sector economy. We should be developing more of these instead of less and they play an even more vital role in the African economy.

In view of this, one can arguably understand the frustration of Mondli Makhanya when he writes about the Emerging Advisers Group’s report, “South Africa is dead. What next?”

Yet, our biggest frustration as policymakers is not so much the abyss we face, but that leading South Africans such as Makhanya think that it is only the government or Parliament’s duty to get us out of this economic morass.

Yet, Makhanya can also be forgiven because it is primarily an economic policy morass that we are in. What the markets and investors need is certainty and confidence. The one feeds off the other and, with a loss of certainty in whether we will implement the 2017 Nasrec resolutions of the ANC, this more than anything else dents the confidence investors have in South Africa’s economic future.

As a result, where one can agree with Mcebisi Jonas in his article, “It’s time for a clear and unifying national agenda”, is that we need to be united as South Africans in the action that we take to restructure our economy.

Like Makhanya, every single South African must sacrifice, must serve and must ensure that we change the very characteristics of our economy in order to bring about prosperity and a decent life for all.

The sad reality is that some have suffered and are still suffering, while others who have not suffered in the past still refuse to sacrifice.

South Africa belongs to all who live in it. The challenge is that the economic challenges are unfortunately felt more by those at the bottom than by those at the top. There is simply no collective ownership of the outcomes of this economic stagnation. Yet, what is the way out of this economic morass? What must be done?

Jonas is partially correct when he points to the importance of our state-owned entities (SOEs) in our economy. They are central to economic restructuring and re-energising, for it is the duty of every government to facilitate the creation of an inclusive economy and thereby create an environment for the private sector to create jobs.

Our SOEs are under threat from more than just corruption and maladministration.

If we are to solve the challenges at our SOEs we must realise, united, that a myopic understanding of these challenges will not lead to lasting solutions.

* Jacobs is an ANC MP and the whip for the portfolio committee on small enterprise development.

** The views expressed here are not necessarily those of Independent Media.

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