Why Mboweni’s economic plan is ‘on the right track’

Why Mboweni’s economic plan is ‘on the right track’

Finance Minister Tito Mboweni. Picture: Michel Bega

An economist says the plan to save the ailing economy is a ‘step in the right direction’ but warns of opposition from labour and the ANC’s alliance partners.

Finance Minister Tito Mboweni’s latest grand plan aimed at taking the country out of the current economic slump and high levels of unemployment has been hailed as a step in the right direction.

According to economist Mike Schussler, Mboweni’s “Economic transformation, inclusive growth and competitiveness: towards an economic strategy for South Africa”, was set to unlock efficiencies, growth and competitiveness, creating much-needed jobs and end the government’s monopoly of being the only provider of vital resources through state-owned enterprises (SOEs).

Describing the document as signalling “a centre-left” shift from the government’s Venezuelan-style socialist approach to the economy, with the state seen as the sole provider of energy, transport, water, telecommunication and other resources, Schussler yesterday said Mboweni’s plan was “a job well done”.

“This is a fairly good plan from Mboweni and the team at National Treasury. It’s a step in the right direction, which is long overdue,” said Schussler. “This policy seeks to take the government out of the running of the economy, as now seen in Eskom, Denel, SA Airways, Transnet, ports and harbours.

“What this means is that if you are a provider of electricity like Eskom is, you should not be the only source that people depend on.

“Other operators and private businesses should be able to sell energy – whether sourced from the sun, water or wind – at a price competitive to Eskom, making affordability possible.

“If you are a farmer or resident generating electricity from your house or river, you should be able to sell it, make money and create jobs in your village.

“If you export coal, you should not be the only provider.

“This policy document allows for a combined approach of partnership between the public and private sectors.”

The world, said Schussler, had moved on and South Africa was left behind.

“Kenya did this five years ago and in South Africa we are still talking socialist policies,” he said. “If you go to Europe or Australia, you will find that the state is not the sole provider of energy or telecommunication.

“The world has changed and now it is time to allow for participation from the private sector and nongovernmental organisations in the economy.

“But when it comes to the loss-making SAA and Denel, all that is needed is a strategic partner and the two entities should not be sold because they are crisis-ridden and mismanaged, with staff not paid salaries on time.”

He said the policy shift would also:

  • Encourage the growth of small, medium and micro enterprises – “a sector bound to create jobs”.
  • Stimulate regional economic growth in Lesotho, Swaziland and Botswana.

However, Schussler cautioned against a backlash from labour and the ruling party’s alliance partners: Congress of South African Trade Unions, SA Communist Party and the SA National Civics Organisation.

“Unions may not find the document interesting and National Treasury may also need political support from within the ANC,” he said.

“From Gear [growth, employment and redistribution], RDP [reconstruction and development programme] to the NDP [national development plan], the ANC-led government has never been short of good documents.

“The only challenge has been the political will to implement.

“For years, business growth was hamstrung under the leadership of Jacob Zuma, which saw a heavy anti-business sentiment from government.

“National Treasury is now, once again, becoming an important [department].”


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