Forum agrees, local government essential to economic growth

The problem with South Africa is that we’re really good at identifying problems and having dialogues on these issues. What we’re not good at is implementing policies aimed solving them.

This was the consensus reached - ironically - at the Kgalema Motlanthe Foundation’s dialogue among equals.

The Drakensberg Inclusive Growth Forum, which concludes today, is the foundation’s three-day gathering of high-profile thought leaders and various stakeholders such as government, business and civil society, including the youth, to share ideas and develop action plans in response to the triple challenges of poverty, inequality and unemployment.

The second instalment of the forum focused on strengthening local government and local economies.

Motlanthe said the forum was a safe space among equals and was not meant to take binding decisions on any matter. Instead, it was meant to draw valuable insights from all attendees to find solutions to some of the most pressing challenges facing the country.

Speakers at the forum included former deputy finance minister Mcebisi Jonas, Public Enterprises Minister Pravin Gordhan and local government minister Nkosazana Dlamini-Zuma.

Speaking on the sidelines of the forum, deputy secretary-general of the South African Communist Party Solly Mapaila said there needed to be a paradigm shift in the way small businesses were viewed. The notion that doing business with them was a favour needed to be dispelled.

Mapaila added that state developmental banks were the key to strengthening local government and local economies. “Countries like Germany don’t worry about external investors, important as they are, because they have their own investment capabilities,” he said.

“The Reserve Bank’s [belief] that it can only focus on inflation targeting is completely misguided. It must get involved in economic growth. It must also get involved, for instance, in the crisis we have with Eskom,” Mapaila said.

“If we say that Eskom is the single biggest threat to the South African economy, the Reserve Bank must be able to swap that debt,” he said. This would

create a point of reprieve that would allow the country to reprioritise resources and planning.

Read: Informal sector needs more support, Motlanthe

Former finance deputy minister Mcebisi Jonas said South Africans were living in an age when there was a poverty of ideas. “The usefulness of [the Inclusive Growth] forum is that it brings together significant members of South African society to reflect on how the country should be shaped,” Jonas said.

The forum, he said, was broader than political parties. “For me, this is the way forward - reaching consensus across society. We need to have these kinds of conversations in provinces, in local areas, so that we have an increasing platform of views on how to grow the economy and deal with the moral decline the country is facing,” Jonas said.

“Xenophobic attacks and violence against women are like conducting sabotage against ourselves as a country. Politicians who are supposed to be saying the same thing, but say different things, are also sabotaging us.

“[Platforms like the Inclusive Growth Forum] help create momentum in society about what needs to be done. The important thing is that we use this to force action in government. We need to put pressure on those in government positions and hold them accountable,” said Jonas.

Gordhan said that state-owned enterprises (SOEs) could play a critical role in inclusive growth by providing cheaper and more efficient services to communities, for example.

“SOEs [spend] tens of billions of rands on procurement. We want them to give opportunities to young black engineers and women, and ensure procurement happens in way that’s more evenly spread and doesn’t make only a few people tremendously rich,” he said.

Gordhan added that SOEs could also play a key role in teaching young engineers what it took to run a power utility or freight company.

“For SOEs to reach the point where they make a positive impact on local economies, we need to ensure that they’re stabilised. These institutions have been weakened for one reason or another, including corruption, state capture or policies. We need stronger institutions that can be used by future generations,” he said.

To achieve this, South Africa needed to overhaul its values. “We need to understand that it’s not just about [individuals], but also also the country. We also need to continuously adapt to new technologies, new developments and new competition,” said Gordhan.

Sthembiso Lebuso Journalist | City Press

+27 11 713 9001 Sthembiso.Lebuso@citypress.co.za Media Park, 69 Kingsway Road, Auckland Park

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