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There was weakness and failure, but ANC remains relevant – Zweli Mkhize

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Zweli Mkhize.
Zweli Mkhize.

“For this democracy to survive, we will all have to make a contribution, and not just act for our own narrow interests,” Dr Zweli Mkhize, treasurer-general of the ANC said, addressing a Gordon Institute of Business Science (GIBS) forum.

Broadening participation in the economy by addressing the concentration of ownership was key to encouraging growth, he argued.

While conceding there had been a decline in support of the ANC, especially in the metropolitan areas, and that there were tensions within party factions, Mkhize was adamant the party remained relevant to leading the country beyond the 2019 elections.

Measures for stimulating economic growth

Mkhize acknowledged the economy was not growing sufficiently, with growth stalling at less than 1% in 2016.

Reducing inequality remained a key to stimulating growth and would also narrow the gap between those who could participate in the country and those who are left out, especially in the rural areas he said.

To this end, employment equity remained an important mechanism to promote inclusivity, and had been “an important part of creating a South African business culture where the private sector helps with the nation building process”.

However, this needed to be developed: “Those who have gained skills must now take ownership and control,” Mkhize said.

He argued this was necessary in order to stabilise the country: “We will continue to be vulnerable if the economy remains exclusive.”

Host of the forum and Sasol Chair of Strategic Management at Gibs, Professor Nick Binedell, asked Mkhize to detail measures that could be taken to trigger investment in South Africa, considering economic growth was the oxygen of transformation.

Mkhize said a sense of confidence among South African businesses and a willingness to invest in the local economy was critical: “It is important to maintain a level of confidence to avoid a ratings downgrade, and to promote South Africa as an attractive investment destination.”

While the country’s outlook might remain negative, he expected no change to the sovereign rating.

Small business was the growth engine of the economy, and established business should make the development of small and medium enterprises one of their priorities.

Better integration of the South African economy with the African continent was necessary in order to achieve higher levels of trade.

Mkhize said he was encouraged that the relationship between government and the private sector had progressed, resulting in improved policy certainty and labour reform, due to programmes such as the CEO Initiative.

However, there was always a balance to be struck between economic and political issues, he said.

“This is a contested area and will always be a negotiated process. But difficult experiences have made everyone realise the need for collaboration.

"The leadership of government and the private sector has discovered that we actually need each other.”

Fiscal consolidation and state-owned enterprises

Fiscal consolidation has to be prioritised to reduce national debt levels and bring them under control. At the same time, the state had a responsibility to invest in order to stimulate the economy and protect the poor, Mkhize said.

“It is important to adhere to the policy of fiscal prudence and ensure that there is no undue wastage. Fighting corruption is important as it is a wastage of resources, as well as an erosion of the moral authority of government institutions.”

Mkhize said levels of governance at state-owned enterprises was a concern for the ANC.

“There is a need for state-owned enterprises, but we must ensure that they don’t overburden the fiscus. We must tighten up on efficiency at these organisations and ensure they continue to run and offer services.”

Mkhize said the party was open to considering the possibilities of private sector support in terms of access to additional finance and investment for state organisations.

Government should find a way to take over the payment and distribution of social grants using state institutions, Mkhize argued.

The social grants crisis was “most worrying,” as the system was a safety net designed to protect the most vulnerable members of society.

“There have been a number of weaknesses and failures of the ANC government,” he said.

 

“People have improved aspirations that can’t be met by government, but only by a growing economy. We have to balance these aspirations with what government can offer,” Mkhize said.

“The ANC remains relevant to taking the country forward, but issues have to be corrected, such as corruption, effective administration and the party structure, so that the will of the people does not get subverted,” he concluded.

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