ATM submission to President Ramaphosa on new economic reforms

22 May 2020

Dear President Ramaphosa

Patriotism should be at the centre of all our endeavours and it must be clear that our Patriotism is to South Africa and its people. It must therefore be clear that as ATM, we hold the brief only for the Country and its people. The priority in the reopening of the economy must be to get as many South Africans to be economically active on a massive scale.

COVID-19 found South Africa already on a slippery slope and has pushed the country further into the abyss. The current juncture is also an opportunity for South Africa to get its house in order and revert to the abandoned developmental agenda in order to position the country for the long term.

ATM has the following concrete proposals to make under the theme of Put South Africa first:

All businesses that are to open must comply with the South African labour laws which state non citizens must work on a scarce & critical skills basis. The government must not allow further non-compliance with the law in which companies that employ non citizens for jobs that South Africans can do are allowed to open.

In ensuring that fair and competitive principles are applied, entry level jobs that are reserved for the unskilled/low skilled population of South Africa must be reserved strictly for South Africans. Such jobs include, but not limited to:

Domestic work;

Gardeners;

Security guards;

Chefs and Waiters;

Petrol attendants;

Car guards;

Employees in the banking industry (except at rare skills level);

Employees of cell phone network providers (except at rare skills level);

Drivers (Uber, Bolt meter taxi drivers, truck drivers, etc)

Cleaners

This would increase taxes, UIF contributions & levies that would be made available for further economic growth. Companies must submit employment data to Department of Labour & Employment, companies complying with the countries labour laws must be given a permit to operate.

The stimulus packages must not be restricted to formal businesses only, even the street traders must be assisted even through vouchers redeemable at major wholesalers.

Government must also constitute a state market for informal economy players. Nothing should stop prisons from procuring their vegetables from street traders.

The South African Business environment must be unapologetically patriotic and favor South Africans.

Non-citizens must partner with locals when doing business in the country for certain sectors of the economy. It is a absurd for an example a South African needs to partner with a Turkish National when doing business in Turkey and partner with a Saudi Arabian Nationals when doing business in Saudi Arabia but citizens from those countries do not need to partner with a South African when doing business in South Africa.

Government must pass a law similar to what other countries are doing to ring fence the informal economy for South Africans.

Ghana Investment Property Center (GIPC)Act No 865 of 2013; which was formed out of Ghana’s interest for her own people Section (27) says: A person who is not a citizen or an enterprise which is not wholly owned by a citizen shall not invest or participate in (a) the sale of goods or provisions of services in a market, petty trading or hawking or selling of goods in a stall at any place.

Sections (28) however says: A person who is not a Ghanaian may engage in a trading enterprise if that person invests in the enterprise, not less than one million United States Dollars in cash or goods and services relevant to the investments.

Nigerian Enterprise Promotion Decree of 1971 (also known as the Indigenisation Decree), outlines the primary objectives as follows:

To create opportunities for Nigerian Indigenous businessmen;

To maximize local retention of profits; and

To raise the level of intermediate capital and goods production.

The Ethiopian Derg, the military committee that took over power in 1974, led by Mengistu Haile Mariam, moved swiftly to rally the masses around the slogan, “ETHIOPIA TIKDEM” or Ethiopia First. It basically meant that the interests of the majority prevailed over the minority and non-Ethiopians. Jobs for Ethiopians were protected, and non-Ethiopians were not allowed to open even a TSAGUR BET or barber shop. The Derg had very tough laws that made it illegal for non-Ethiopians to participate in the Second Economy. The protection laws of 1974 are still in force in Ethiopia.

It is incomprehensible locals have to compete with Chinese and other nationals for basic economic activities such as street vending. The informal economy must be ring fenced for only South Africans to ensure the rand circulates amongst South Africans and profits can be reinvested in order for our economy to grow. Only South Africans must trade in the Township, Rural and Inner City economy.

Businesses that must ring-fenced for the exclusive ownership of South Africans are:

Retail and wholesale businesses;

Street hawking;

Flea markets;

Barbershops;

Hairdressing;

Beauty salons;

Employment agencies;

Estate agencies;

Fast food outlets;

Internet cafes;

Dry cleaners, Laundries and Laundromats;

Print shops;

Spaza shops;

General dealers;

Electronic shops (computers; cameras; radio & TV sets, etc.);

Furniture shops;

Bus, shuttles and taxi industry;

Agriculture and food processing;

Advertising;

Marketing and distribution of goods and services to locals;

Cell phone shops;

Hardware shops;

Security Companies;

Small and medium manufacturing;

Traditional healing;

Media (Newspapers and Magazines, Radio Stations, News Agencies, Digital Media, etc.);

Guest Houses; B&B’s and other similar types of accommodation;

Rental accommodation (free standing houses; sectional title accommodation, apartments, etc.).

There must be no business dealings between the Government and a non South African player at micro level. At macro level the shareholding of all companies that do business with the Government must comply with existing Transformation laws.

Government needs to reduce barriers of entry and hold big business accountable. It can't be just government who works with and awards contracts with SMEs but so should big business.

Home Affairs department must rid itself of all the corruption in awarding work permits to non qualifying foreigners.

Only foreigners with scarce and critical skills should qualify for work permits. This must be done only after satisfying an extensive search was done and no South African can do the work. Addition to this, a reasonable amount of time must be allocated for a skills transfer process to ensure that locals are upskilled in the specific trade that bears skills shortage in the country.

Foreign companies should not only have the primary objective of investing and being just shareholders, but they should focus more on how they plough back into the country. They must employ locals. The approach used in the mining industry of developing where they mine and employing locals and up upskilling and such should be across all sectors.

UIF benefits should only accrue to South Africans. Home Affairs and the Department of Labour must work jointly to achieve this objective.

To ensure accelerated investment in SME’s, 70% of government business must be given to SME’s as compared to the current practice of approximately 70% of government business being directed towards larger corporates. In building new economies post coronavirus, SME’s must be the backbone of our economy.

Big businesses such Shoprite and Pick n Pay must be restricted from operating in the township economy to avoid the enhancement of the monopolistic culture that stifles the growth of emerging small businesses within the township economy.

Economic recovery is heavily dependent on the principle of secluding certain economic sectors solely for the ownership of South Africans. We need to restore the dignity of the people of South Africa by Putting South Africans First.

We need an adequate and sustainable instrument for poverty alleviation; that is participation of locals in the economy on a massive scale. This is an opportunity to rectify mistakes that were committed at the dawn of democracy that resulted in the mass dislocation of indigenous communities from the local economy.

Issued by Vuyo Zungula, ATM President, 22 May 2020