Stimulate the economy, replace currencies
THE ANC-led government is desperate to create an economic recovery but there is no magic wand.
It is encouraging to see the national executive committee (NEC) endorsing Finance Minister Tito Mboweni’s plan for reviving the economy.
Some of the key content would be the splitting of Eskom into three entities and disposing of some of the SOEs that have become burdens to the fiscus such as Denel, SAA and others.
The key issue in South Africa is job creation, which is not happening at a pace required.
One of the key factors to job creation is the reluctance of both local and international investors to plough their money into this country. This is mainly because of political uncertainty over issues like land ownership.
The rating agencies also play a major role in investment. Hypothetically speaking, let us imagine there are two large international conglomerates like Nestle and Radison Blu that want to invest in South Africa.
Nestle wants to start up coffee and cocoa plantations to grow and process the harvests while Radison Blu wants to build a string of hotels, thereby creating thousands of temporary and permanent jobs.
By the time the government clears all the red tape and land ownership issues, these companies would take their business elsewhere.
You might even have political parties protesting against such ventures because it is “un-African” and will enhance white monopoly capital.
One bold move that the government can do that will stimulate the economy is to recall and replace the R200 and R100 currencies with new notes.
It is evident that money laundering is rife in South Africa. When politicians and others are offered millions of rands in paper bags, etc, it should have alerted the Treasury and Sars of the extent of money laundering.
If such a move to replace this currency is implemented and a cooling-off period is set for the end of the tax year in February 2020, one would find those who acquired this so-called “black money” scrambling to dispose of their ill-gotten gains.
This would result in a sudden boost in business such as the retail sector and the motor industry. Such a move will have a minimum impact on the lives of the majority of ordinary South Africans.
The question is: Will the government be bold enough to implement this currency replacement in the interest of all its law-abiding people?
VIJAY SEWTAHAL Clare Estate