Multitudes of Inkatha Freedom Party members. File Picture: SOWETAN/BAFANA MAHLANGU
Multitudes of Inkatha Freedom Party members. File Picture: SOWETAN/BAFANA MAHLANGU

The Inkatha Freedom Party (IFP) has lashed out at the government for supporting ailing state-owned enterprises (SOEs), saying it's akin to throwing money into a bottomless pit.

In his swansong, marathon speech at the IFP national elective conference in Ulundi, KwaZulu-Natal (KZN) on Saturday, outgoing party president, Prince Mangosuthu Buthelezi, said the "schizophrenic approach" to SA's economic policy has destroyed investor confidence.

The IFP became the fourth largest party in Parliament after growing its support to 3.38% during the May 8 election, thereby receiving 14 seats in the National Assembly.

It also dislodged the DA as the official opposition in KZN, where it received 14.58% of the votes, equating to six seats in the provincial legislature.

Cash-strapped SOEs include arms manufacturer Denel, public broadcaster SABC and power utility Eskom, which is battling a debt of over R440bn, and was granted another R59bn of government support for the next two years in July.

The SABC has requested R3.2bn from the government to stay afloat as its projected figures show factual insolvency. Forecasts indicate that the public broadcaster will end the 2018-19 financial year with a net loss of R568m against a budgeted loss of R288m. The SABC had a net loss of R622m for the 2017-18 financial year.

In July, Treasury director-general Dondo Mogajane told parliament that the SABC would have to comply with conditions laid down by the Treasury before it could access the R3.2bn bailout.

Buthelezi said the IFP warned the government years ago when he still served in cabinet as home affairs minister, that "we cannot keep pouring money into a bottomless pit".

"A fundamental policy decision had to be taken. But the ruling party failed to take it. And now the economy is failing." He said the effects of the slowing economy, which contracted 3.2%, or declined R56bn, in the first quarter of 2019, were felt mostly keenly by ordinary South Africans.

"Are all the bills paid every month? Do you ever have to wonder how you’ll pay the school fees, or the rent, or how you’ll buy electricity or put food on the table? These are daily worries for most South Africans. Ours is one of the most unequal societies in the world."

He said the schizophrenic approach to economic policy had destroyed investor confidence, noting that investors don't come when there's no policy certainty and a lack of investment security.

He criticised the governing ANC for being "beholden" to its tripartite alliance partners such as labour federation Cosatu and the SA Communist Party (SACP), who he said were espousing and openly flirting with socialism.

"Tragically, 25 years into democracy, SA is still struggling with the ghost of socialism ... No wonder we have failed to attain that elusive 5% [economic] growth. We have not parted company with socialism. The economic crisis is self-inflicted."

He said the joblessness rate, which jumped from 27.6% to 29% in the second quarter of the year, worried him.

The number of unemployed people in the second quarter increased by 455,000 to 6.7-million. But the number climbs to roughly 10m if those that have given up looking for  work are included, according to Statistics SA data.

"Our youth face extraordinary hardship. Unemployment has already reached 29%. But among the youth, it has reached 52%. Millions of able-bodied young people are sitting at home without work and without an income."

He singled out SA's education system, saying it had failed young people, especially those who left school without being equipped to enter the labour force.

"It is not just the education system that has failed our youth. The economy has failed them as well. When SA entered democracy in 1994, we inherited a strong economy," he noted.

"But we were also faced, for the first time, with the constitutional requirement of meeting everyone’s needs with the resources available. It was no longer a case of resources being used for some, and denied to others."

When he served in Nelson Mandela's cabinet as home affairs minister, Buthelezi said he warned the government of national unity to focus on the economy.

"This call for strong economic growth is part of the IFP’s legacy. Just as we petitioned for federalism and the devolution of powers, we petitioned at the negotiating table for a free market economy, where business could flourish, jobs could be created, and investment could be secured," said Buthelezi.

"Today, economists can trace back the history of economic collapse and pinpoint the problem. The ruling party never committed to one economic policy. Instead they allowed their tripartite alliance partners the SACP and Cosatu to dictate policies that were neither fish nor fowl."