Mboweni says he’s making good on his ‘radical economic transformation prayer’
The finance minister last year said it shouldn't be so hard to radically transform SA's economy. He now seems to think he's on the way to achieving it.
Finance Minister Tito Mboweni. Picture: Michel Bega
In a Facebook post on Thursday afternoon, Finance Minister Tito Mboweni opened up for the first time since joining President Cyril Ramaphosa’s cabinet about a controversial tweet (for some) from last year on radical economic transformation.
He was criticised for it by, among others, the DA, when he took over the job from Nhlanhla Nene.
A series of tweets in April last year saw Mboweni trending after he called for the greater socialisation of capital.
Mboweni wrote on Twitter at the time about his views on “radical economic transformation”, a phrase popularised by Jacob Zuma supporters and those who wanted Nkosazana Dlamini-Zuma to be the next president. He asked: “What is so difficult [about radical economic transformation]?”
He typed up a short prayer asking for leaders to open their eyes and ears and “do four things”.
“The State must own 40% of mining companies, start a State Bank, implement appropriate Land Use Planning and Create a Sovereign Wealth Fund. That is Radical Economic Transformation!!”
ALSO READ: Tito Mboweni trends for expressing his ‘EFF ideas’
Many of the responses he received to his tweets accused him of thinking like the EFF or even being part of them. Others praised him for the exact same thing.
On Thursday, Mboweni returned to this message, saying he had been “so correct” and that he and government were now implementing his 2018 suggestions.
Writing in all caps, he said “[Deputy Finance Minister] David Masondo is leading the process of establishing a state bank. The minister of mineral resources and energy is working on the state participation in mining and a sovereign wealth fund is under way. Radical. Progressive. We can do it in our lifetimes!”
The finance minister also weighed in on reactions this week to National Treasury’s latest blueprint on economic structural reforms intended to reverse the downward trend in South Africa’s growth potential and competitiveness.
He took on critics of his new discussion document, saying it was not “another Gear”, the government growth policy implemented under Nelson Mandela in 1996.
Titled “Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa”, the 77-page plan was made public on Tuesday night with the hope that it may raise economic growth and create 1 million job opportunities as a result.
It builds on the National Development Plan that failed to gain traction during Jacob Zuma’s presidency.
It has, however, already faced criticism from both within and outside the ANC, with alliance partner the SA Communist Party rejecting it for being “neoliberal capitalism” and because they were not consulted.
Trade union federation Cosatu also demanded that National Treasury withdraw the document, saying it makes government seem incoherent, confused and unreliable.
Economist Mike Schussler hailed it, though, as something that might unlock efficiencies, growth and competitiveness in South Africa, creating jobs and ending the government’s monopoly of being the only provider of vital resources through state-owned enterprises.
“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.
“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 being left behind.
“The world has changed and now it is time to allow for participation from the private sector and nongovernmental organisations in the economy.”
However, Schussler cautioned against a backlash from labour and the ruling party’s alliance partners: the Congress of South African Trade Unions, SA Communist Party and the SA National Civic 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.”
Co-director of the Institute for Economic Justice, policy analyst and former unionist Neal Coleman, however, wrote yesterday on Twitter that in his view National Treasury had “gone rogue … again”.
“They have unilaterally published a policy document without engaging government structures, ANC structures or civil society (unless you count financial sector economists present at their colloquia).
“Given that we are in a deep economic crisis, this Treasury unilateralism is highly irresponsible, as broad engagement on the nature of the problem is critical to coming up with appropriate solutions. But it now emerges that such engagement was totally absent.
“The failure to have an inclusive process is reflected in the product, which suggests the authors live in a technocratic bubble which is insulated from the nature and extent of the social and economic crisis confronting the majority of South Africans … which requires a bold creative response.”
He added that “a quick scan reveals there is no ‘grand plan to rescue the economy’ as some in the media have billed it”.
“The paper doesn’t seriously confront the current crisis. The focus is mainly on medium-term microeconomic measures, not urgent interventions to kick start our depressed economy. The word ‘stimulus’, let alone government’s own stimulus package, is not mentioned once! This comes days after National Treasury announced an austerity programme to slash spending.”
He charged that the ambitions of the “strategy” were “frankly pathetic”.
“Proposing to create a feeble additional 1 million jobs over 10 years! (or 100,000 jobs a year). To put this in perspective, this will in a decade only absorb around two years of new workseekers who will come onto the job market!”
He said the document’s sectoral focus, while having some interesting ideas, appeared to lack coherence on transformation of the economy (including its focus on services and agriculture versus manufacturing and beneficiation), among other things.
“The urgent task remains to have a serious and inclusive national conversation about a bold, innovative, economic strategy which can move our country forward. The Treasury document is not a useful basis for this discussion.”
(Background reporting, Brian Sokutu)
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