By Minister Jeff Radebe
Across the world governments and nations are grappling with the question of how to grow their economies and create jobs. In South Africa, we are the first to accept that our economy is growing too slowly. These tough times call on all of us to pull together and build our country. By working as one we can undo the crippling legacy of poverty.
South Africa finds itself in a tricky situation; the world economy continues to struggle and growth of our major trading partners remains subdued. There are head-winds on many fronts and our short- term prospects are likely to remain muted.
The International Monetary Fund recently revised our growth rate downwards and gave a frank assessment of our challenges. These are sobering times. However, our nation is known for its resilience. We stood together in the face of Apartheid repression and weathered impossible odds.
We remained resilient when we delivered massive infrastructure to host the first ever 2010 Soccer World Cup hosted in African. Together, we can ensure we are just as resilient this time. Improving our economic conditions is our common challenge and the government is convinced we can build a winning nation by standing together.
Our medium and long term plans remain sound. We are steadily building sustainable partnerships with business and labour. Earlier this year, President Jacob Zuma and Deputy President Cyril Ramaphosa chaired a meeting of business and labour leaders to discuss measures to grow the economy and create job opportunities.
We are undoing bottlenecks in the economy and building on our excellent macro-economic framework. Our fiscal policies are sound and are the building blocks to faster and more inclusive growth.
The government is aware that such interventions provide little hope to an unemployed person or a graduate struggling to find work. But we can say with confidence we are working every day towards a future where every South African can strive to reach their dreams through dedication and hard work.
The fractures within our nation, however, run deep and it will take time to address the many structural challenges we inherited from the past. There is no silver bullet to our challenges; the government therefore continues to address our deficits systematically.
The framework for faster and more inclusive growth is in place and finds expression in the all-encompassing National Development Plan (NDP), which is the blueprint for a better South Africa.
Many would argue that our immediate challenges cannot be resolved by the NDP, which is a long term plan, but the NDP is more than just a plan; it is the overarching vision for South Africa. Therefore it includes all key policy instruments aimed at growing the economy and creating jobs.
These include the New Growth Path, which sets the trajectory of economic development; the National Infrastructure Plan, which guides the roll-out of infrastructure to improve people’s lives and enable economic growth; and the Industrial Policy Action Plan, which focuses on promoting investment and competitiveness in leading sectors and industries.
It lives in tandem with the Medium Term Strategic Framework (MTSF), the nuts and bolts of the NDP. The MTSF is our strategic plan for the 2014-2019 electoral term and ensures policy coherence, alignment and co-ordination across government plans as well as alignment with budgeting processes.
All these plans dovetail with the President’s Nine-Point Plan to ignite growth. Our government has set the country on a path to radical economic transformation.
We are working to ensure this transformation is faster, more inclusive, accompanied by higher levels of employment creation, reduced inequality and the deracialisation of the economy.
Our massive investments in infrastructure such as electricity, transport, water, roads, schools and hospitals are beginning to pay off.
The private sector and unions have a role to play too. It is important that we all think and act to train young people, to create more labour intensive work and build sustainable industry for prosperity.
The recent bumper revenue collection of over R1 trillion by SARS will allow government to service debts, ensure social services and deliver infrastructure to further grow the economy.
In its recent visit to our country, the IMF spoke of the need to grow the proverbial economic pie so that more people might benefit. They also spoke of the need to get more role players into our economy.
South Africa’s economy continues to be dominated by several large players and this dominance is often at the exclusion of small and medium sized business. The government is not blind to this reality and has therefore established the Department of Small Business Development as stand-alone department to unlock the potential of small, medium and micro enterprises, cooperatives, township, and rural enterprises.
When effectively harnessed, small businesses, co-operatives and medium businesses have the power to unlock economic opportunities across our society. A thriving small business sector will lead to inclusive economic growth, higher levels of employment creation, reduced inequality and a de-racialised economy.
It should never be forgotten that many of the large conglomerates now present in our economy began as small and medium sized businesses. Through our support to emerging business, we hope to grow the economy and create new and sustainable jobs.
To help sustain small businesses, the government has set aside 30 percent of its procurement contracts for this sector.
We are also committed to reducing the regulatory burden small enterprises face. The government is committed to ensuring small businesses are paid within 30 days.
These interventions are making steady inroads but to ensure a bigger slice of the pie, we must shake off the notion that we are a nation of job-seekers and strive to build a nation of entrepreneurs. Too few people are taking the risk of starting a business; most do not see it as a viable option.
This must change. It begins with encouraging young people to take a chance on their dream.
The government is convinced that our nation is poised to reap the benefits of our prudent economic and growth policies. The sound fiscal framework we have in place and strong partnerships with both business and labour will also go a long way in propelling our economy.
Jeff Radebe is the Minister in The Presidency
