What Zuma means by radical socio-economic transformation

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SONA 2017:

What Zuma means by radical socio-economic transformation

 

10/02/2017

Crowds gathered in the streets of Cape Town last night, and a stream of VIP guests arrived to listen to President Zuma deliver his 10th State of the Nation Address. Among those VIP guests was the family of the late Oliver Tambo, Mr Dali Tambo with his wife Rachel, and their son Oliver Tambo Junior. Poignant attendees for a year that has been dedicated to the late ANC President.

Even more poignant were the words of Oliver Tambo that President Zuma chose to quote in his address, prefaced by his own statement that Political freedom alone is incomplete without economic emancipation. Oliver Tambo said:

“The objective of our struggle in South Africa, as set out in the Freedom Charter, encompasses economic emancipation. It is inconceivable for liberation to have meaning without a return of the wealth of the country to the people as a whole.

“To allow the existing economic forces to retain their interests intact is to feed the roots of racial supremacy and exploitation, and does not represent even the shadow of liberation.

“It is therefore a fundamental feature of our strategy that victory must embrace more than formal political democracy; and our drive towards national emancipation must include economic emancipation.”

These words were taken from a speech that Oliver Tambo gave at an SACP anniversary meeting in London in 1981. Thirty five years later and those words still resonate with so many of us. The fact is they shouldn’t. Whilst political freedom came in 1994, the long walk to economic freedom continues.

Zuma’s words on radical socio-economic transformation are welcome. But what does this mean for the black underprivileged in our country, and what is Zuma proposing?

Zuma is proposing a “fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans” but how will this be achieved?

Addressing the skewed nature of ownership of big business in South Africa

If South Africa’s economy is to work, everyone regardless of the colour of their skin needs to participate in it. Today in South Africa many of our big business, including the big four banks, are white owned and controlled.

Zuma has promised that his government will legislate, regulate, and extend more licenses and budget and procurement allowances that will favour black businesses.

The Country’s nine billion rand infrastructure budget will also be examined, with a portion of it to be reallocated to driving transformation.

New regulations making it compulsory for big contractors to subcontract thirty per cent of business to black owned enterprises have already been finalised.

Zuma’s hope is that through such regulations and programmes his government will be able to use state buying power to empower small enterprises, rural and township enterprises, designated groups and to promote local industrial development.

Putting a stop to collusion and cartels

Readers of this blog are already familiar with the collusion and cartels that exist in South Africa’s banking sector, dominated by the big four banks.  These banks squeeze out small players and hamper the entry of young and aspiring black entrepreneurs who struggle to grow their businesses because they are denied bank loans.

The competition authorities have already put in place legislation and frameworks that uncover the cartels and punish them for breaking the law, but more needs to be done.

Thankfully, Zuma plans to take this further with new legislation. This year, the Department of Economic Development will bring legislation to Cabinet that will seek to amend the Competition Act and address the need to have a more inclusive economy and to de-concentrate the high levels of ownership and control seen in many sectors.

What President Zuma has done is to clearly set out his vision of radical economic transformation. Through the promise of further regulation and legislation, Zuma seems to be determined to open up South Africa’s economy to new players, give black South Africans equal opportunities in the economy and make the economy more dynamic, competitive and inclusive. If this is his vision of radical economic transformation, it has to be applauded.

Black ownership of businesses

Zuma also states that that radical economic transformation should mean moving beyond share ownership schemes only. He wants to see more black people involved directly in business, owning factories. He praises the establishment of the Black Industrialists programme for making positive steps towards this, having supported more than 22 entrepreneurs since inception.

The Department of Public Works is also set to invest over one hundred million rand this year on critical capital and maintenance programmes to modernise harbours. These harbours will also continue to generate revenue from the letting of state owned harbours and coastline properties, which will in turn generate income for black owned businesses.

The Government will also continue to ensure greater participation and ownership of black people in the ICT sector and natural resources, with the latter expected through proposals contained in the Mining Charter, which is currently being reviewed.

What President Zuma has done is to clearly set out his vision of radical economic transformation. Through the promise of further regulation and legislation Zuma seems to be determined to open up South Africa’s economy to new players, give black South Africans equal opportunities in the economy and make the economy more dynamic, competitive and inclusive. If this is his vision of radical economic transformation, it has to be applauded.

 

 

 

 

 

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