ANC needs a strategy that delivers growth and jobs

The governing party should work together with all people to develop a plan that creates employment

Over the past 23 years consecutive governments led by the ANC have produced and pursued policies and programmes to work towards a seemingly simple goal — the betterment of the lives of all our people.

I have been a member of all these governments. As we look back now, it seems to me that it is not just what we do that matters, but how we do it. This is to say, it is not only the policies and programmes we formulate and implement that matter, but how we go about it.

It matters how we lead and who we engage. Our policy conference had much engagement on these issues and we will have more shortly during our soon-to-be-held national conference.

In recognising that it is not what we do but how we do it, the discussion document on economic transformation at the ANC national policy conference said that, “to be inclusive, growth must combine growing GDP per capita with increasing levels of employment, expansion of productive activities and massively increased opportunities, particularly for black South Africans”.

Having given regard to the structure of our economy and its social outcomes, it is clear that we need to put in place a strategy that is clearly connected to the outcomes we seek, especially given that SA is beginning to see public discontent that threatens to destabilise society and erode our democratic gains. It should therefore be alarming that recent economic data show that we are going backwards — unemployment is rising, and with it, poverty and inequality.

It should also be extremely troubling to observe that while SA’s economy emerged from recession in the second quarter, recording a growth rate of 2.5%, during this same period, the economy shed 113,000 jobs.

The economy is struggling to create jobs. SA’s unemployment rate remains high at 27.7%, with 6-million South Africans willing, but out of work. More drastically, there are 15-million South Africans who are not economically active. Indeed, this is the very definition of economic exclusion.

Official statistics show that poverty is on the rise. More than half of South Africans live in poverty, with the majority being women. About 55.5% of people fall under the widest definition of poverty. Poverty is known to be most acute among rural populations and women.

Further, SA is among the most unequal countries in the world. A report released by Oxfam argues that in SA, three billionaires own as much wealth as the poorest half of the population — about 28-million people.

The black majority are unable to start and drive successful entrepreneurial ventures or break into leadership in business. This is of serious concern given the critical need for new business ventures in creating employment and ending poverty and underdevelopment. I believe that we must recapture the right path — recommit ourselves to realise the vision enshrined in the Freedom Charter – of government by the people, sharing in the country’s wealth.

Having witnessed an economy that grows without inclusion, it is critical that we formulate a strategy that delivers growth through the participation of all willing and able South Africans. People have to participate.

We need investment-led and job-creating growth — investment by both the private and public sector, working together. This means investment must be towards infrastructure that people can use for upliftment. For example, while highways are important, building smaller roads allowing for remote areas to attract tourists, and irrigation and water-storage infrastructure allowing for agricultural enterprise are also needed.

Government must invest in a way that crowds in the private sector and creates an environment of lower risk and higher value investment. Collaboration and partnerships with the private sector in investing and creating work are key to this strategy. And it can be done through nurturing an enabling environment for the private sector — not just for large companies but small enterprises too.

This occasions the important role of stateowned enterprises (SOEs), which must play a much more active role in empowering people and industry and crowding in investment.

One clear area is the energy sector. We have to build an economy dominated by a new generation of small and medium enterprises with a growing and strong manufacturing sector and decentralised energy infrastructure that can meet our energy needs. Not only will this facilitate growth, it will also allow participation of many players who were previously excluded.

Procurement spending by SOEs ought to be used strategically in stimulating growth and employment opportunities for South Africans. This is important to seed small businesses in creating markets and allowing access.

Here again, the answer in restoring SOEs doesn’t lie in ever-changing boards. It lies in ensuring that the right people are placed in the right positions, with clear goals and deliverables and clear consequences for failure. It must also not be a succession of bail-outs that put pressure on the fiscus and ultimately the taxpayer.

Here we must also make a choice: do we want corporatised SOEs that operate in highly competitive markets facing the same profit and loss incentives as other firms? Or do we want SOEs that drive a developmental mandate? If the latter, then we cannot also expect them to make a profit. If the former, then we cannot expect them to prioritise development.

The truth is, we know what to do. The secret to unlocking growth is no secret at all: it lies in a capable state, delivering the services citizens deserve and creating an enabling environment for business to create the quality and quantity of jobs we need.

We need to urgently invest in our economy and our people. To do this and get the urgent results we need, we must work together collaboratively. For example, it is clear we need to invest in our young people in order that they are skilled and employable. These young people are needed as a critical resource in the private sector. Hence, government, labour and the private sector need to work together.

People speak of business confidence, trust and policy stability. It seems to me that these cannot be created by an act of Parliament or solely by government initiatives. But as we work together in solving social challenges, we automatically create the trust through collaboration and outcomes. In that way, we can attract the investment capital we need to drive employment-rich growth.

As public service minister I insisted on an outcomes-based public service. We have to establish a culture of responsibility and service. However, government must commit to empowering the public service through training. As leadership, we should also exemplify good governance. All these things can be done.