Looking for radical economic transformation

Unity… The National Development Plan (NDP) called for it and apparently so does radical economic transformation. But unlike the NDP, the radical economic transformation strategy seems to be without a strategy. Only that transformation needs to be radical to bring about an economic change in the country. It’s not bad thinking but it is thinking without a plan. But before divulging into what can be done, perhaps we should first define it.

Radical economic transformation has been loosely used since 2011. It was coined by the Black Business Council when it was re-established in 2011. For the Black Business Council the transformation involved reforms to BEE legislation to drastically increase the ownerhsip of economic products by black people.

In 2014 Rob Davies explained radical economic transformation as radical transformation of different spheres of the economy: the radical transformation of productive structures, of production relations, less conflict, and less inequality. He further explained that radical economic transformation should focus mainly on job creation and inclusive growth. During the SONA debate this year, Minister Gugile Nkwinti reinforced the nature of radical economic transformation: to be a strategic programme that will be rolled out by government given what’s available to the state. This will include: legislation, regulation, licensing, budget, and procurement. There will also be more focus on B-BBEE.

While the above doesn’t indicate how radical economic transformation will create economic growth in South Africa is does mention a focus on B-BBEE. This was echoed in President Zuma’s SONA: transforming the economy to improve the economic standings in South Africa.

Another way that has been mentioned by Prof. Malikane is land redistribution. He’s view is that government should own land and rent it out. This will also include residential land. Government can then use the rental income to fund economic development. While land redistribution can be a method to improve the welfare of many black families, the land distribution programme has been a failure: Zuma’s cronies have benefited and new farmers, who have no experience in farming, have been left with no support from government.

And then during the WEF on Africa, our new Minister of Finance, Malusi Gigaba, produced a list of way to improve the economy: focus on township and rural economies; more funding to SMMEs and women and black owned businesses; and to manage fiscal spending. Not radical at all nor is it new sentiments. In fact, it was quite a conservative way to achieve growth. Perhaps government has realised that Africa and the world’s focus is on them?

But maybe we do need something radical? Deputy Finance Minister Sfiso Buthelezi has said there’s not difference between inclusive growth and radical economic transformation. He explained that radical economic transformation is the way to achieve inclusive growth. Is this wrong? I can’t disagree. You want inclusive growth then maybe it’s time to think out of the box.

But before that, we as government, business and civil society need to unite to make it all a possibility. The trust between government and business needs to be rebuilt and a shared vision needs to be created. And then we can start debating and implementing radical strategies.

 Featured image from Rigzone (2012)

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