ENOCH GODONGWANA: Setting the record straight on ANC economic policy document
Business Day columnist Claire Bisseker normally provides useful insights and analysis about the economy, but in her recent column (“ANC’s new growth plan a confusing clean sweep”, July 13), she made some fundamental factual errors, which raises the question whether she took time to read the ANC’s document.
A linchpin of Bisseker’s polemic is that the ANC’s document does not mention the paper on economic reform that finance minister Tito Mboweni released in August 2019. In this assertion Bisseker is plainly wrong; the ANC document explicitly references Mboweni’s paper on page 3, where it reads: “In crafting this plan, the ANC proceeds from the premise that there are many policy documents that capture the approach of [the] government on the issue of economic growth and social inclusion. These include the Reconstruction & Development Programme (RDP), the National Development Plan (NDP) and the document released in 2019 titled: Economic Transformation, Inclusive Growth, and Competitiveness.”
This last reference is clearly to Mboweni’s “Economic Transformation, Inclusive Growth, and Competitiveness” strategy document that Bisseker says is not mentioned.
Bisseker compounds her factual mistake, using her error as a foundation for erroneous analysis. She seeks to build up an elaborate — but baseless — argument that the ANC’s document “implicitly rejects the central thrust of Mboweni’s document, with its reliance on reducing state monopoly power to improve the efficiency of network industries (road, rail, telecoms, energy) and on regulatory reform to unleash the energies of the private sector”.
Again, it seems that Bisseker has not taken the time to read the ANC’s 30-page document before criticising it. If she had read the document, she would have taken note of the fact that it explicitly reinforces and supports many of the reforms proposed by Mboweni that seek to reduce the cost of business and improve the performance of SA’s network industries.
Rather than trying to stoke dissent, Bisseker could have laid out her opinion of the strengths and weaknesses of the various policy interventions and innovations the ANC has outlined in its document “Reconstruction, Growth and Transformation: Building a New, Inclusive Economy”.
Many Business Day readers would have been pleased by the pragmatic and progressive interventions outlined in the ANC document. For example, the ANC agrees that fiscal sustainability must be restored in SA, that job creation must be promoted through expanded infrastructure investment, that private-public partnerships are key, that blockages to private-sector investment in key productive sectors must be removed, and that the radically improved performance of network industries such as electricity, rail and water must be an important part of the country’s growth and reconstruction effort.
The ANC argues that in the wake of the Covid-19 pandemic, public, private and development finance will all need to be mobilised in a concerted manner to fund the country’s reconstruction effort. Furthermore, state capacity at national, provincial and local level will have to be improved through decisively overcoming problems of corruption and tightening up systems of accountability and co-ordination.
The first pillar of the ANC’s policy framework is to mobilise society around an infrastructure-led recovery with new investments in energy; water and sanitation; roads and bridges; human settlements, health and education; digital infrastructure and public transport. To achieve significant job creation multipliers, the emphasis must be on localisation, including maximising the use of SA materials and construction companies as well as labour-intensive methods.
Infrastructure expansion has been described as the “flywheel” that will stimulate increased levels of self-sustaining economic activity, job creation and the formation of new skills and know-how for our people. As such, infrastructure investment offers greater economic benefits and multipliers than proposals to reprioritise our country’s limited resources simply to increase welfare payments.
As a second pillar, the ANC’s policy framework will promote investment in key productive sectors, such as agriculture, manufacturing, mining and tourism and other services.
After years of delay, decisive progress will be required in telecommunications reform, including expediting digital migration and spectrum allocation to reduce data costs for households and firms. Similarly, the growth and job creation potential of energy-related investments, including green industries, must be fully harnessed, including through local production linked to the country’s energy investment programme, as required in the Integrated Resource Plan. Industrialisation and the expansion of SA’s productive sectors will be accelerated through increased international trade, especially with other countries on the African continent.
In terms of implementation, the ANC document argues that to facilitate a society-wide mobilisation of financial and real resources to advance SA’s economic reconstruction and recovery, a process of social dialogue and social compacting, at national and sectoral level, will be required to unite in action key constituencies including business, labour, community and the government.
Attempts to promote social dialogue and social cohesion will be undermined if commentators are allowed to go unchallenged when they disseminate incorrect information about the country’s ongoing economic policy discussions.
Our society needs increased levels of trust, which can only be built on a common and accurate fact base, if we are to overcome SA’s devastating colonial and apartheid legacy and work together to build a new, more inclusive, non-racial and non-sexist economy.
• Godongwana chairs the ANC’s economic transformation committee.
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