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.