Earlier this month, we announced government’s action plan linked to the 9-Point Plan for Economic Growth as our response to the recession. It aims to accelerate progress, coordinate government efforts and act as a mechanism for accountability. The 14-point action plan, which has strong support from the President and Cabinet, has realistic, achievable objectives set against realistic and firm timelines.
Since assuming the Finance portfolio, we have engaged extensively with business stakeholders – across sectors, established and emerging – on our economic growth programme. The key message that has emerged from those engagements was that two broad sets of actions were required to revive business confidence: provide policy certainty in a range of areas where key decisions and legislations have been pending for years (mining, telecommunications spectrum, broadband rollout, land reform), and revitalizing key state owned companies (SOCs), especially Eskom and SAA, and stabilising their governance.
With respect to policy certainty, business has said to us, understandably, that for it to invest in these areas, it needs to know what the policy landscape is going to be. In the case of telecommunications spectrum, the state needs to exercise its licensing function to unlock economic activity.
As the department responsible for managing government guarantees of SOC debt, we are acutely aware of the need to ensure that our SOCs are well governed and managed, and have sustainable business plans. Further urgent reforms are required in the governance of our SOCs in order both to establish public confidence in them and to place them on a solid footing to make the socio-economic contribution we expect of them.
Our discussions with business reinforced our own analysis that much of what needs to be done to restore the confidence of economic actors to spend and invest has already been identified. The 9-Point Plan is our economic growth and reform agenda; we need to improve its implementation, not replace it.
This speaks to valid criticisms that have been levelled at government for years. Stakeholders have complained that we generally develop sound policies but are let down by slow decision-making and poor implementation, that departments work in silos and often at cross purposes, or that we too often come up with new programmes without implementing the ones we have. There is often lack of accountability for non-action. This has tended to put into question the leadership of the government and raised doubt as to strong government support for the economic reform programmes to be implemented.
These criticisms are valid to various degrees. We do have to work within the constraints of government, in accordance with legislation and regulations which are time-consuming to enact and amend. Still, government can and must work better to achieve our development objectives and there must be accountability for agreed programmes and set timelines.
In several intensive engagements with the President and fellow Ministers after the recession was confirmed, we spoke frankly about the concerns raised by business and other stakeholders. We all shared a sense of urgency to accelerate the pace of structural reforms, to lay the platform for higher growth. The President asked departments to commit to the shortest realistic timelines for the 14 key actions which were identified and made it clear that he expects these timelines to be met. They have been communicated to the public so that stakeholders can hold departments accountable for delivering on these. In this way, we can hold our feet to the fire.
What is important about the action plan is not whether the actions therein are new. Most are not and we make no pretense that they are. However, what is important is that it represents unity of purpose, an action-oriented approach, and enables accountability. It is an economic support package to enhance 9 point plan – mobilising public and private resources around common targeted objectives
We believe that by completing these structural reforms, we will lay a platform for higher growth, by improving business and consumer confidence, and removing binding constraints. It will not happen overnight. Government must do what it has to do to create an enabling environment for business to invest and thus drive growth and employment in the economy.
We have made progress in resolving the energy challenge, moving from scarcity to surplus, and improving labour relations. Economic capacity that was lost due to electricity constraints and workplace conflict will take time to reconstitute.
Our economy has significant advantages compared to our peers which we sometimes overlook. As we continue to remove binding constraints and promote key sectors, we are confident that growth will resume, and more sustainably so.
We have often said that improving business confidence is the cheapest economic stimulus that government can implement. A first step towards achieving this is for government to deliver on its to-do list. By the medium-term budget policy statement in October, we will be in a better position to look at our economic forecasts, and announce a further economic support package, building on this action plan.
To enhance implementation, an advisory council on economic growth comprising of government, labour, business and civil society chaired by the President is being considered. We know we have a long way ahead, but with concerted effort and coordinated action we can turn our economy around, help it grow faster, bigger, on a sustainable basis and in an inclusive manner. Despite our many challenges and sometimes differences, we must be able to act together towards a common direction, bearing in mind that below are the commitments the public and the masses of our people will hold us to account on our actions.
Malusi Gigaba is a member of the ANC National Executive Committee and Minister of Finance