There is new impetus for urgent structural reform. We urge the President and Finance Minister to act now on the wide-ranging structural reforms our economy urgently needs.
President Cyril Ramaphosa’s admission to Finance Minister, Tito Mboweni, that “We now need to move more boldly on the structural reforms programme” is welcome. For years the DA has been calling for a programme of economic structural reform to increase investment, grow the economy and create jobs.
Now this programme is needed not to grow the economy, but to save it from destruction.
Over the last decade our economy has been crippled by profligate government spending, an explosion in our national debt, and rampant corruption. Now that our economy has been downgraded to junk status by Moody’s, there seems to be some fresh realisation from the President and his team that urgent action is necessary. Better late than never.
Minister Mboweni should therefore ensure that he:
- provides a clear outline of what the economic structural reform programme will entail, with targets and timelines;
- outlines the specific interventions that the government will pursue to promote investment and growth;
- provide details on the composition of the Vul’indlela Unit that he plans to establish in the Ministry to drive the reform agenda
Minster Mboweni only has one shot at getting economic reform right. Piecemeal concessions that seek to retain the status quo and appease the ANC’s competing factions won’t cut it this time around. What we need is a concerted effort to turn South Africa’s economy away from strangling state control towards investment led growth.
South Africa path to recovery can only begin if the ANC government is ready and willing to:
- hold a firm line against trade unions who are intent on reversing the decision to cut R160 billion from the state wage bill;
- reduce the number of public sector managers who do not deliver front-line services;
- support the DA’s proposed Fiscal Responsibility Bill, which holds the key to reducing national debt and debt service costs;
- free South Africans from Eskom’s death spiral by opening the energy market to IPPs;
- disinvest from zombie state owned enterprises and immediately put a stop to further bailouts; and
- introduce far ranging reforms to ease up the labour regime and end the centralised power of bargaining councils.
That South Africa is in the middle of an economic crisis, made worse by Covid-19, is beyond doubt. What matters is whether we are willing to take the bold action needed to create the required conditions to grow the economy and create jobs.