WEF

CityPress - - Business & Tenders - JUSTIN BROWN justin.brown@city­press.co.za

Achiev­ing “in­clu­sive growth” and over­com­ing in­equal­ity in South Africa would be pos­i­tive for in­vest­ment, eco­nomic growth and sta­bil­ity, Deputy Fi­nance Min­is­ter Sfiso Buthelezi said on Fri­day.

Buthelezi said South Africa was the most un­equal coun­try in the world with a Gini co­ef­fi­cient score of 0.66. The Gini co­ef­fi­cient is a mea­sure of in­come or wealth dis­tri­bu­tion – a score of zero is ab­so­lute equal­ity and a score of one is ab­so­lute in­equal­ity.

“Un­equal so­ci­eties are the most un­sta­ble. There is an in­verse re­la­tion­ship between in­sta­bil­ity and in­vest­ments. If you are un­sta­ble, you can’t hope to get in­vest­ments and cap­i­tal for­ma­tion in the econ­omy.

“It is in the in­ter­ests of all of us to give eco­nomic cit­i­zen­ship to all of our peo­ple. It will au­gur well for in­vest­ments go­ing for­ward,” he said at the launch of the World Eco­nomic Fo­rum (WEF) on Africa in Jo­han­nes­burg.

The “in­clu­sive growth” that will be dis­cussed at the WEF on Africa in Dur­ban this week was the same as gov­ern­ment’s “rad­i­cal eco­nomic trans­for­ma­tion” idea, Buthelezi said.

“There is no dif­fer­ence between in­clu­sive growth and rad­i­cal eco­nomic trans­for­ma­tion ... [both] en­sure that the ma­jor­ity of the cit­i­zens get in­volved in eco­nomic ac­tiv­ity, and it talks to all the cit­i­zens of the coun­try be­ing part of the own­er­ship of means of pro­duc­tion. It talks about ben­e­fi­ci­at­ing the pri­mary prod­ucts that we pro­duce so that we add value to our ex­ports,” he added. “The Na­tional Trea­sury is stick­ing with more in­clu­sive growth ... Once we men­tion the word ‘rad­i­cal’, a lot of peo­ple get a lit­tle bit tense,” Buthelezi said. Elsie Kanza, head of Africa at the WEF, said that the “sta­tus quo was not ten­able”. “We are con­cerned about the lack of ur­gency. We need a sense of ur­gency ... maybe that speaks to the rad­i­cal part that this sit­u­a­tion can­not be sus­tained and will lead to in­sta­bil­ity,” Kanza said. Buthelezi said the way to achieve in­clu­sive growth was to “grow the cake”, or grow the econ­omy. Pro­cure­ment was another means to achieve in­clu­sive growth, he added. South Africa’s re­liance on pri­mary prod­ucts was a “big, big prob­lem”. “We need to be fo­cus­ing on ben­e­fi­ci­a­tion. When you do that, you know that you are ex­port­ing goods of higher qual­ity ... That makes it eas­ier to share the cake,” he added. “It is ev­i­dent that global cap­i­tal­ism needs to be bet­ter man­aged to ad­dress the in­creas­ing alien­ation and dis­con­tent ex­pe­ri­enced by cit­i­zens – not only in Africa, but glob­ally. The global econ­omy is not grow­ing fast enough or is not deep enough to af­fect ris­ing global in­equal­ity, un­em­ploy­ment and fi­nan­cial ex­clu­sion,” Buthelezi said.

“Africa must lead in seek­ing so­lu­tions to its chal­lenges ... De­spite the drop in com­mod­ity prices in 2016, Africa re­mains an at­trac­tive in­vest­ment desti­na­tion ... Africa is the sec­ond-fastest-grow­ing area in the world after emerg­ing Asia. This presents sig­nif­i­cant growth op­por­tu­ni­ties for trade and in­vest­ment,” he said.

This is the 27th meet­ing of WEF on Africa. The last time it was held in Dur­ban was in 2003. The theme for the meet­ing is “achiev­ing in­clu­sive growth”.

Kanza said: “There is a con­cern that the pur­suit of growth has not trans­lated into the ben­e­fits cit­i­zens are ex­pect­ing ... [There are] not enough jobs, and [there is a] de­te­ri­o­ra­tion of liv­ing stan­dards as well as pres­sure on lead­ers to be­come more re­spon­sive to their cit­i­zens.”

More than 1 000 lead­ers in busi­ness, gov­ern­ment and civil so­ci­ety from more than 100 coun­tries will be at­tend­ing the meet­ing. More than 600 or­gan­i­sa­tions will be rep­re­sented.

Pres­i­dent Ja­cob Zuma, Deputy Pres­i­dent Cyril Ramaphosa, Fi­nance Min­is­ter Malusi Gi­gaba, Buthelezi and 15 other Cabi­net min­is­ters, as well as a num­ber of other heads of state and politi­cians from the rest of Africa and the world, will be at the meet­ing.

Sfiso Buthelezi

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