Riyaz Patel
Finance Minister Tito Mboweni’s plan to pull the economy out of its longest downward cycle since 1945, is seemingly putting him on a collision course with cabinet colleagues, fellow ruling-party members and labor unions.
Treasury’s economic policy paper: ‘Economic Transformation, Inclusive Growth, and Competitiveness: Towards an Economic Strategy for South Africa’ was released on their website late Tuesday.
The paper – open for the public comment until September 15 – places huge emphasis on the role of the private sector in the generation of investment and jobs.
Cosatu deputy general-secretary Solly Phetoe says the document should have first been discussed and debated in the National Economic Development and Labour Council (Nedlac).
“Because that paper has not gone through structures of the alliance of the ANC has not gone the processes of government. I’m sure even the president, if you would call him, he would not be aware of that paper,” he said.
“It is part of the people who are undermining the process of government, the process of Nedlac including the alliance.”
Cosatu deputy general-secretary Solly Phetoe
In the paper, Mboweni envisions the state relinquishing its near monopoly of electricity, port and rail services; relaxing rules to make it easier to do business; and privatizing assets to stabilize its finances.
He also favors maintaining a flexible exchange rate, inflation targeting and sustainable fiscal policy, according to the document released by National Treasury late Tuesday.
The document further outlines that Eskom could sell some coal-powered plants to raise R450bn and allow households to sell electricity back into the grid as part of a restructuring of the state-owned power utility.
Some of the proposals contained in the paper conflict with recent calls from within the ANC and its union allies for the government to play a more interventionist role in stimulating the economy, as well as tackling rampant poverty and a stubbornly high (29%) unemployment rate.
The SACP said it’s “seriously concerned” by the “sudden” release of the economic strategy paper.
Official policy positions, which have been adopted by the party but have yet to be implemented, include nationalizing the South African Reserve Bank, land expropriation without compensation and implementing a National Health Insurance (NHI) scheme.
“It’s a rehash of everything we’ve published before.”
Former Statistician-General Dr Pali Lehohla
Former Statistician-General Dr Pali Lehohla has also criticised Treasury’s document aimed at encouraging economic growth, saying it “failed to talk to the country’s triple challenges of poverty, unemployment and inequality.“
Lehohla described the strategy paper as a rehash of old proposals with no fresh ideas on how to kickstart the economy and create jobs.
“It’s a rehash of everything we’ve published before. There is nothing new except that we have a crisis of Eskom. That’s why it’s placed disproportionate attention on the crisis of Eskom,” he said.
