GUMANI TSHIMOMOLA: EFF affirms need for economic liberation in all programmes

The economic perspective of the third EFF National People’s Assembly discussion document is timely given the national discussion about the economic crisis facing SA — joblessness and obvious failures of the Treasury’s economic policy.

The perspective, with a special focus on state-led industrialisation, calls for a shift in how the SA economy is structured, moving away from dependence on neoliberal economic policies and the dominance of private capital. 

What makes this perspective a necessary intervention is the attempt by the Treasury and those in business to collapse the state, eroding the distinction between public and private sectors. This agenda will leave SA with an economy entirely focused on profit maximisation at the expense of the national developmental interests that are essential for building productive industries and creating sustainable jobs. Hence the document's emphasis on state-led industrialisation as a core strategy.

Grounded on the EFF founding manifesto’s cardinal pillar 5 — “massive protected industrial development to create millions of sustainable jobs” — and building on the resolutions of the second National Peoples Assembly as well as the organisation’s achievements over the past 11 years, this perspective reaffirms the necessity of a state-led industrialisation strategy. As noted in the discussion document and numerous submissions, without such an approach the state risks further deepening a racialised economy.

Despite being a minority, white South Africans continue to control unimaginable wealth, enjoy opulence and luxuries in the face of growing poverty, joblessness, poor economic growth, deindustrialisation and the decay of public infrastructure and private investment. This is exacerbated by the entrenched financialisation of the SA economy, where speculative financial activities take precedence over productive investment. 

This dire situation is compounded by incoherent and incompetent fiscal and monetary policies. Fiscal policy no longer serves as a developmental tool for the state but rather functions as a means to appease global capital markets. Similarly, monetary policy in its current form is designed to serve the interests of the finance sector at the expense of broader societal needs.

For the Treasury and the SA Reserve Bank an increase in private sector participation in delivering public services for profit, coupled with the illusion of stability on the JSE, is falsely seen as a measure of success. This view ignores the reality of millions of desperate, unemployed young and old South Africans who remain marginalised, living on the economic periphery, often forced into cycles of crime and violence. 

Against this backdrop, the EFF’s perspective on the economy re-emphasises and reaffirms the need to place economic emancipation at the forefront of all our programmes as a movement. The movement must resist internal and external pressures that push it towards short-term compromises lacking ideological grounding.

Fighters must remain vigilant and defend the organisation from pickpockets, street tsotsis, swindlers and ideological scammers. We must continue to reject neoliberal policies, including any attempts to privatise energy, rail and port infrastructure and water systems, because failure to do so will redirect the only genuine tool in the hands of marginalised poor.

Therefore, all proposed interventions must be considered with a focus on state-led industrialisation. For instance, stabilising affordable, reliable, state-generated and state-distributed electricity should be prioritised to support industrial growth. This includes the state taking control of the entire coal value chain, from extraction to power generation, without any profiteering in the process, and cancelling purchasing agreements with independent power producers (IPPs).

The reorganisation of spatial planning and the construction of new economic centres and cities, including revitalisation of industries, must also focus on fostering and supporting new industries. 

The perspective outlines a bold five-and-a-half-year plan to reindustrialise SA through a state-led strategy rooted in progressive procurement policies and robust infrastructure development. In this vision the state must actively direct industrial policy, targeting sectors that will drive both immediate and long-term economic benefits.

This approach rejects the dependence on imagined investor messiahs whose focus is solely on short-term gains, often at the expense of SA businesses willing to invest in the country’s long-term development. 

To achieve this ambitious vision the state must leverage its enormous procurement power, directing it to support local industries and create a sustained demand for domestically produced goods. Government procurement currently exceeds R1-trillion annually, a sum that if strategically channelled into local industries could create millions of jobs and stimulate industrial growth.

Rather than simply purchasing goods from the private sector, state procurement must be harnessed to meet clear developmental objectives, ensuring that local industries are supported, developed and expanded. 

The procurement of goods across various sectors must be systematically directed towards locally produced goods. For example, state institutions such as hospitals, schools and correctional facilities should procure all their linen, uniforms, food, pharmaceuticals and other supplies from local manufacturers.

This policy will not only stimulate demand for domestic goods but also help revitalise industries that have been undermined by imports. It will also support key sectors such as textiles, agriculture, pharmaceuticals and the automotive industry, which are essential for the country’s industrialisation. 

In addition to procurement, industrial development must focus on the domestic production of inputs for infrastructure projects. SA faces a significant infrastructure backlog, especially in housing, roads and rail, and this provides a critical opportunity to foster local industries that produce the materials necessary for construction.

The state must ensure that housing developments, educational infrastructure and road projects prioritise the use of locally produced materials such as bricks, cement, steel and timber. Moreover, the Development Bank of Southern Africa’s initiative to build 300,000 student beds across universities and TVET colleges must be redesigned to incorporate local industries and provide long-term economic benefits.

In rail infrastructure, the state must prioritise local production of steel, concrete and road-building equipment, as well as materials for the upgrade of SA’s vast road network. The revitalisation of Transnet Freight Rail’s network is another key area where local industries can play a vital role. By localising the production of key materials and equipment needed for these projects, the state can stimulate job creation and economic growth, supporting both short-term infrastructure needs and long-term industrialisation. 

Another vital aspect of the strategy is the focus on localisation, which ensures that raw materials are processed domestically into higher-value goods before being exported. SA’s agricultural sector, for example, should move from exporting raw produce such as avocados, citrus and grapes to processing these products into higher-value goods such as juices, oils and packaged foods. Similarly, the mining sector must focus on beneficiation, turning raw minerals into finished products such as steel and automotive components. This will increase the value of SA’s exports and create more jobs in processing industries. 

The state must take full control of its energy sector, ensuring that energy infrastructure, especially coal-fired and nuclear power stations, are developed with a clear focus on supporting industrialisation. The production of key components such as turbines, generators and transmission equipment must be aligned with the development of local industries. The goal is not just to produce energy, but to create a self-sustaining energy ecosystem that supports industrial growth and reduces dependence on foreign suppliers. 

In line with this vision, the state must also foster innovation by supporting digital start-ups and providing the infrastructure necessary for them to thrive. This includes affordable internet, reliable electricity and physical spaces for operations. The government should provide affordable loans and grants to start-ups that use locally sourced materials and services in their operations. By absorbing some of the financial risks through offtake agreements or upfront payments, the state can help start-ups grow without the financial constraints that often hinder new businesses. 

Ultimately, the success of this strategy depends on the state’s ability to actively direct industrial policy, not simply as a passive actor but as a dynamic force that shapes the economy for the benefit of all South Africans. This is a long-term vision that calls for bold, decisive action to reindustrialise SA, create jobs, and build a more equitable economy.

The state must stop relying on external actors and speculative investments, and instead focus on fostering a strong, domestically driven industrial base that meets the country’s developmental needs and creates sustainable wealth for all.

• Tshimomola is responsible for research at the EFF and is national co-ordinator of its governance task unit.