ANC unveils more of the same bad ideas, some even worse

10 July 2020

The ANC’s economic proposals contained in its “Reconstruction, Growth And Transformation” discussion document does nothing to fundamentally change South Africa’s current path of decline. The document is a manifesto of more of the same bad ideas that have crippled our economy already, and some new ideas that are even worse.

Rapid economic growth is the only way to stop poverty and bring down unemployment. To grow the economy, we need far-reaching pro-growth economic reforms that nurture enterprise and take honest account of the capacity of the state. Instead, the ANC is committed to a policy course that stifles entrepreneurship, and makes it harder to run a business and invest in South Africa, in favour of ’state led development’. How it plans to do so with an empty Treasury, bankrupt SOEs, endemic corruption and mismanagement, is unclear. If the government's response to Covid-19 has taught us anything, it is just how incapable the state is.

If South Africa is to avoid mass impoverishment and skyrocketing unemployment in the coming months, the ANC must make progress on its promised reform agenda. And it must abandon the bad ideas that led to recession long before Covid.

This document confirms that the ANC, despite Minister Tito Mboweni’s and the President's claims to the contrary, is not interested in pursuing economic structural reform. Despite warnings on the negative impact that a raid on pensions will have on the country’s financial stability, the ANC remains dead set on using prescribed assets to subsidise its continued mismanagement of the economy.

The ANC’s proposals to “change Regulation 28 under the Pension Funds Act to enable cheaper access to finance for development” and use “pension funds to take over certain restructured Eskom assets” is absurd. Asset prescription is a policy straight out of the apartheid government playbook, used to prop up the failing apartheid state when global markets would no longer extend credit. That the ANC would even consider such a policy now is an admission of the comprehensive failure of their government.

Mboweni’s repeated assurances on the independence of the South African Reserve Back (SARB) have been rejected by the ANC, with the document proposing to go ahead with the nationalisation of the bank by making it “fully state owned”.

Even as the discussion document supports the expropriation of property without compensation, the ANC does for the first time acknowledge the importance of releasing land owned by the state. The blind pursuit of expropriation without compensation, without regard for the economic consequences, will continue to undermine South Africa’s economic sustainability and future growth.

The ANC’s discussion document is a list of more of the same bad ideas that have got us here, and should be rejected outright if South Africa retains any hope of emerging from the current economic crisis.

Issued by Geordin Hill-Lewis, DA Shadow Minister of Finance, 10 July 2020