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The ANC’s economic policy document has the solution for getting SA out of junk status, is anyone taking notice?

PUBLISHED: Mon, 10 Apr 2017 11:36:06 GMT

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Last month South Africa’s ruling party, the African National Congress (ANC) released national policy documents ahead of its National Policy Conference to be held from 30 June-5 July 2017. What is most striking about its document on Economic Transformation is that it contains many of the solutions needed for getting South Africa out of junk status, which its long-term foreign currency was downgraded to by both Fitch and S&P and local by Fitch. Is anyone in governance taking notice and prepared to act or is there a complete disconnect between policy and governance?

Solutions for ‪#JunkHowToGetOut proposed in the document include:

  • Increasing the investment by the private and public sectors form current levels of around 19% of GDP to 30% of GDP. Key to this is policy certainty.
  • Concerted efforts required at eliminating policy uncertainties and unwarranted regulatory hurdles.
  • Conducting an audit of the policy and regulatory constraints to investment and set a clear timeframe for addressing them, linked to Ministers’ performance contracts.
  • Creating confidence in the economy through credible programmes of employment creation and racial transformation, which enhance long-run stability.
  • Good governance of state owned enterprises.
  • Maintaining international norms and standard with regard to the regulation of the financial sector and other sectors.
  • Strengthening social justice and conditions for the poor and working class.
  • Building confidence through the improvement in the quality of public education and health services, through reliable and affordable public transport services, through the knowledge that the private sector is regulated in such a manner so as to avoid unfair competition, price-fixing and unfair labour practices, and through the knowledge that systems are in place to expose corrupt practices and prevent corruption from taking root.
  • Improving integration into the African economy. Practically, this means taking steps to enlarge the free trade areas (FTAs) existing in the Southern Africa Development Community and other regional economic communities into larger more expansive FTAs.
  • Growth-enhancing elements, such as, reduced red-tape, increased investor confidence, the limiting of monopolistic practices and structures and policy certainty in key areas, such as, mining and infrastructure expansion, should be regarded as necessary components of South Africa’s overall transformation programme.
  • Lowering costs in the economy to make employment less costly and to assist poor households
  • Improved energy generation and distribution;
  • Improved urban planning approval processes;
  • Improved water supply and waste water management;
  • Improved transport and logistics;
  • Improved access to telecommunications services;
  • Improved processes for water, minerals and environmental permits.
  • The strengthening of the public sector, particularly economic institutions for the purposes of development. This requires a detailed review of each of the economic departments, particularly of the senior bureaucracy;
  • The appointment of capable and professional public servants with the ability to deal with the complex and integrative questions that emerge from the perspective of managing a developing and transforming economy; continuous identification of market-conforming tools or incentives that drive particular development outcomes.
  • The democratic state and state owned companies must be fully empowered to drive large-scale infrastructure investments and expand access to public services in such a manner as to effectively open up new economic opportunities for ordinary South Africans – as citizens, as workers, as entrepreneurs and as businesses leaders.
  • Instituting improved governance at State Owned Companies, such as, SAA, Land Bank, Eskom, Transnet, etc.
  • Ensuring renewed discipline in the development and implementation of economic policy. There has been a degree of drift and indiscipline in policy formulation and policy implementation, such tendency needs to come to an end. For example, the newly developed draft Integrated Resource Plan (IRP) provides a rational basis for planning South Africa’s future power generation mix and co-ordination with Eskom should be improved to avoid confusion over future Independent Power Producer investments.
  • Showing greater co-ordination and unity of purpose among key government departments and actors, so that the developmental state is able to shape the country’s national agenda. Based on such confidence building interventions, the ANC government will be in a stronger position to provide leadership, and unite the broader South African community, including organised business and labour, around the overall vision of employment creation and inclusive growth.

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