JABU MABUZA: It’s no time for bystanders
The window of opportunity to fix SA's economy is closing, so we need to rethink our investment paradigm today
"Beyond this valley will be redemption and total renewal. Those who have been involved in malfeasance, wrongdoing and corruption must stand and be accountable to the nation." These words from President Cyril Ramaphosa, uttered after millions of South Africans went to the polls last week, acutely reflect the challenges and opportunities of this new era we’re entering in SA.
Over the past decade, the economy has been a tableau of ruin. Since 2011, there’s been a marked decline in growth, reaching a low point of a technical recession in 2018. Stats SA reported stubbornly high unemployment and inequality, spurring poverty and social instability. A crisis of confidence, driven by economic mismanagement and widespread re-purposing of public resources, led to investment falling.
Yet despite the grim foreboding of that statistical legerdemain, the moment we have now presents another opportunity. Ramaphosa’s steadfast commitment to redemption promises to give the body politic new blood and muscle.
Of course, central to this challenge is economic growth. Here, it falls on Ramaphosa to show investors he is capable of leading SA out of the quagmire. Emboldened, at least partially, by the ANC’s victory, Ramaphosa has won the initial fight to put a redemptive seal on his promise.
But it’s clear a "business as usual" approach risks further instability. Incremental changes won’t resolve problems with investment, unemployment and the skills deficit.
In his state of the nation address in February, Ramaphosa poured the foundations for renewal by asking the right questions. But now is the time to take concrete steps to deal with policy and institutional uncertainty — such as, for example, dealing with the crisis at Eskom, land expropriation, and tackling those complicit in corruption.
After an election, we focus on what majority a party scored. But of far more importance is ensuring SA’s leadership is credible and able to deal with our numerous challenges and deliver urgently the reforms to create an environment for unconstrained growth.
Our overriding objective should be to maximise the impact of policy interventions through labour-absorbing growth. Everyone must play a part in overcoming our huge unemployment time bomb.
To do so, it is essential that government gets its policies right. Of course, no country has successfully built a mature economy without investment-friendly policies and a sustained investment in skills, research and development. As a prerequisite, we need to dramatically enhance sector policies by eliminating obstacles to growth.
Policymakers have an important role to play in shifting away from a narrow focus on the state as a source of patronage
Crucially, we cannot resolve the problem of anaemic growth and high unemployment within the current investment paradigm.
Though the National Development Plan (NDP) offers a coherent framework, the challenge is to ensure policies and incentives are aligned to SA’s transformation imperatives, and its labour-intensive sectors. The solution lies in a new paradigm, which not only stimulates priority sectors but also addresses the fundamental faultline fissuring society: skills.
The removal of funding obstacles has been a first step, increasing access to higher learning. But with a misalignment between the type and quality of skills produced by higher learning institutions, and the changing needs of business in the fourth industrial revolution, we need a radical approach to transform SA’s curriculums. To do this, we need increased state support, as well as the participation of the private sector in defining the education transformation agenda.
To shift priorities towards a more agile and transformative path that is inclusive and sustainable, we don’t just need "engagement"; we need aggressive and effective execution, as we have only a small window of opportunity to act.
Policymakers have an important role to play in shifting away from a narrow focus on the state as a source of patronage, towards a capable state with a comprehensive economic recovery plan. We need a clear fiscal strategy to preserve SA’s credit rating.
Equally, business must be instrumental in creating inclusive growth. Labour and communities should be invested in the difficult trade-offs needed to align our actions with the growth agenda.
The stakes couldn’t be higher. Everyone must take a hard look at themselves and see whether they are part of the solution or the problem. It is no time for bystanders.
• Mabuza is chair of Business Leadership SA