Jessie Duarte: Only the ANC has the instruments to correct the challenges we face
Ten years ago, in the wake of the global economic recession, the 2009 elections proved to be about the economy. There is little doubt that next year’s elections will be about the economy as well and it is for this reason that the ANC has ensured that creating jobs remains as a priority as is its unity and renewal.
The recent stimulus package announced by President Cyril Ramaphosa must therefore be welcomed. As in 2009, the stimulus package will mitigate the hard impact that the global economy is having on the local market. As President Ramaphosa mentioned in his announcement of the stimulus package that “the structural weaknesses in our economy have been made worse by global factors such as a rising oil price, weakening sentiment towards emerging markets and deteriorating trade relations between the US and other major economies”. If we were to recall, in 2009, South Africa hit a recession as low as a minus 6% growth rate. However, with the correct measures put in place, the economy was able to recover by the very next year to see a positive 2% growth rate. Since then we have dipped a number of times onto recession but making sure always that we remained resilient. Data from sites such as Trading Economics indicate that industries such as agriculture, forestry and fishing have all declined by twenty-nine percent after contracting by a third in the first quarter of 2018. Industries such as transport went down by nearly five percent while services sector, such as tourism, decreased by nearly 2%. From data such as this, we can see that government, in keeping with the dogma of a developmental state, is targeting specific sectors in which it could grow and seek improvement. The stimulus package, comprising of five key characteristics, is therefore able to unlock the growth potential of the economy through this targeted approach. Take for example the tourism sector and the visa regime. While the ANC-led government sort to tighten the visa regulations in respect of children and ensure a better fight against human trafficking, it is suggested that this has had a negative impact on the tourism industry. At the same time, the Department of Home Affairs has ensured that again a targeted approach is undertaken in ensuring that those tourist feeder countries are given easier access to South Africa. Therefore, Minister Malusi Gigaba announced, for example, that while 15 of the sixteen SADC countries have visa waivers for ordinary passport holders, of the top 10 African tourism market only Nigerian passports require a visa. At the same time, of the top 10 global tourist markets only Chinese and Indian visitors require visas even though measures are being put in place to ensure easier application for business people from BRICS, in particular China and India, who may receive their visas within five days of application and would last for 10 years with multiple entries. According to Minister Gigaba, South Africa receives approximately 10-million international visitors per annum which includes tourists, business travellers, investors and academics. Yet even more so, we must work on ensuring that when visitors come to our shores that they are greeted warmly, have a good stay in order for them to return to South Africa and double or triple their investment. Another focused area of the stimulus package is the mining sector. In order to sustain long term growth, exports and job creation it is imperative that we restore investor confidence into our mining sector while at the same time meeting the socio-economic needs of our people. Cabinet has approved the Mining Charter and we certainly hope that all role-players in the industry will ensure that mining and mineral benefication is realised. Together with the focus on the township economy, prioritising three regional and twenty-six industrial parks, the transformation of the mining sector must ensure that our formal economic activity base is broadened and ensure the participation of as many South Africans as possible. As President Ramaphosa pointed out, our economy will only be able to grow stronger and a potentially better and faster rate if the structural weaknesses within it is addressed. Part of these structural weaknesses is that the majority of our people remain economic spectators and are not active participants in the economy. In this respect, the announcement on the lowering of data costs, expanding the procurement from small to medium enterprises and cooperatives as well as a township and entrepreneurial fund all addresses this quintessential question of inclusion in the economy. We will certainly not be entering the trade war, given that we believe this to be one of the roots in the slump in the global economy, but we will make sure that within WTO rules on trade we safeguard some of our industries such as the poultry one and ensure stricter measures on illegal imports. Austerity measures, as witnessed globally, does not spur economic growth. It is for this reason that the ANC would welcome the president’s redirection of spending rather than cutting costs on essential services. We are pleased that there will be further investment into decent sanitation, especially earmarking schools, addressing shortages at our hospitals and in particular the filling rather than the freezing of critical medical posts including staff such as nurses and interns. While the stimulus package highlighted a repositioning of R50-billion in expenditure, it will also see an investment of R400-billion in the medium-term framework into the Infrastructure Fund. The ANC led government has rightfully identified fifty-seven pilot municipalities where infrastructure is a priority and will ensure that basic services such as sewerage purification, refuse sites, electricity and water, among others, are serviced and delivered to our people. Again, those familiar with the drastic steps taken by the ANC administration in 2009 would know that much emphasis was placed into infrastructure investment and in particular the Soccer World Cup off-set much of the negative impact that the global economy had delivered in its sway. Trading Economics, based on their data, suggests that the recession that we currently face is "the most since 2009”. Despite what the pessimists have had to say in our country and abroad, we have been able to keep South Africa afloat in the last decade. Despite the challenges, we have been able to manage the economy through a very difficult time in the past and there should be no doubt that the ANC led government will be able to lead South Africa even through this period. What sets the ANC apart from other parties is that it has a track record of keeping the South African ship afloat. In the last decade, we have proven that despite a tough and volatile global economy we have been able to manage the economy well. Yet, more than anyone else, the ANC is aware that serious changes needed to transform our economy. We are asking South Africans to once again trust us with this tremendous task just as you trusted us to steer the ship during the choppy waters of economic recession. Be assured, the ANC will dock South Africa safely. DM Jessie Duarte is Deputy Secretary-General of the ANC