Tinkering at the margins versus putting SA on a new path: President Ramaphosa must veto the EEB

1 April 2022

Finance Minister Enoch Godongwana has announced that the fuel levy will temporarily be reduced by R1.50 a litre from April 6, and has granted temporary exemptions from race-based procurement at Eskom and Transnet. Both gestures highlight a pathway that President Cyril Ramaphosa would be wise to follow.

Positive as Minister Godongwana’s actions are, however, they merely top up the petrol tank on a vehicle that needs major repairs. Profound liberalisation of labour and business is needed to get South Africans back to work.

If President Ramaphosa is truly committed to getting the wheels of jobs growth turning again he will transpose the Finance Minister’s temporary reforms into a more permanent turnaround by vetoing the Employment Equity Amendment Bill (EEB) recently approved by the National Assembly.

The Reserve Bank forecasts growth at 1.9% in 2023 and 2024, which is too low to adequately address the 35.3% narrowly defined unemployment rate. As a vehicle for jobs growth South Africa’s economy is already stalled, but EEB will forbid businesses from offering to sell more value to government for less on a racial basis and will impose nationwide private sector race quotas. The IRR has shown that this will likely cause unemployment to rise above 50% on the expanded definition.

Said IRR Head of Campaigns Gabriel Crouse: “Godongwana’s idea is to let South Africans make every rand literally go further, by buying a little bit more petrol. But Ramaphosa sits at the national steering wheel and he has to decide which way the country goes. Will it be a more ‘aggressive’ form of BEE called EEB, that benefits a few already rich cadres of all races to the cost of the many? Or will he turn back to the centre in accordance with 80% of South Africans who say jobs should be appointed on merit, according to independent polling commissioned by the IRR?”

The IRR Petition for the President to veto the EEB, including a link to details on the EEB’s unconstitutionality, is available here https://irr.org.za/campaigns/stop-race-quotas

Issued by Gabriel Crouse, IRR Head of Campaigns, 1 April 2022