By Neil De Beer
JOHANNESBURG – Since the “new dawn” of presidency two-and-a-half years ago, many things were to be addressed with soaring levels of poverty, inequality and the huge unemployment crisis.
So far not much has been delivered, coupled with the Covid-19 pandemic exploiting all these fragilities even more.
To further strengthen economic dynamism in my view, a new master plan should be implemented by the government, business and labour which seeks to achieve a common policy objective to save the country and analyse, access, scrutinise and evaluate the “plan” that is not currently effective for our economy.
The new South African master plan should take consideration of:
- All structures of state-owned entities (SEOs) on the level of either sale of the entity, partnering or refunding of the structure with each having its five-10-year plan.
- SEOs must be redesigned for the modern era. Entities’ capability of production, output and marketing is critical in our current economic climate. A business should be employed to run a business.
- Imports and exports, the thinking around this should be “South African products first”. There should be an understanding of global value chain markets, but more than that a good understanding of our local markets and the potential it could have in the global supply chain. South Africa as a country has a fruit bucket with an array of items in this basket; live animals and animal products, raw hides skins leather, textiles and fruits and nuts.
- The new master plan must re-evaluate exports goods, so that we can support and back South African items in our “fruit bucket” in the global value chain. The accessibility of our local markets must be more practical in the global market; this is the only way we can attract foreign direct investments.
- About foreign direct investment (FDI), there should be no more “red tape” around FDI inflows into the country, but only “red carpet” moments. It is time that we sort out the bureaucratic and unmanaged message we send out to foreign direct investors. A country that cannot bring FDI is a country locked out of its future economy, because an economy that is locked out of the global market is an economy that is in decline and recess from the world and eventually collapses. We must make South Africa investable again.
- South Africa’s economy is in a perilous state; government debt is still high at 59.9percent and the cost of debt service nearly 14percent of revenues should continue to burden spending. Next year, public debt is expected to increase even more.
- The country needs to create an anti-debt society. The country needs to stop borrowing money from international agencies, including the International Monetary Fund, in the form of low-interest loans, this is damaging to our sovereignty not only in Africa but globally. Therefore, the government needs to implement this anti-debt society unit to introduce measures to raise economic growth and reduce borrowing.
- The agricultural and agro-processing sector should be subsidised as part of economic and industrial policy in the master plan. Agriculture must be part of the economic future of the country. And there are many examples of where a country that subsidises agriculture are rich, a good example is China where in the last 15 years it almost took 20percent of its population out of poverty through agricultural developments. In a South African setting, this can happen as this was one of the sectors with the least job employment over the past 12 years.
The new master plan demands discipline, courage, conviction, tough choices to resolve the economic crisis.
There is simply no way out, we must get the country working again by boosting industry competitiveness and creating jobs.
Abandonment of responsibility is simply no longer a choice. South Africa needs leadership that is accountable, responsible and can challenge the means of powerful interests within the deep roots of political nestle.
Neil De Beer is president of the IFA and advises numerous African states on economic development. See www.ifa.africa or [email protected]