Herman Mashaba

Only less talk and more action can fix the economy

2018-10-28 18:48

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When the multi-party government took office in Johannesburg, we adopted the motto: "When Johannesburg Works, South Africa Works."

Given its footprint, Johannesburg needs to be the driving force of economic growth and job creation. 

Recently, President Cyril Ramaphosa held a summit to discuss the pressing need for investment, economic growth and job creation in South Africa. That is well and good. However, in doing so, such conversation must be frank and honest. 

The reality is, South Africans are an amazing people. We have emerged from the depths of our painful history ready to build a country together. The spirit of our people is enduring, innovative and vibrant. As a people, we have endured and innovated not because of government but in spite of it. 

Government has to change from making the right noises to taking the right actions that will enable the potential of our people to be realised. 

We can no longer afford to have organised labour and governing political parties in alliances that compromise government when tough decisions have to be made for our economy. 

This is how we end up with labour laws that have become inhibitive for small businesses that form the backbone of the economies of all developing nations. 

This is how we end up with a National Minimum Wage which serves the interests of those employed at the expense of the 9 million people who live without the basic dignity that comes from work. 

This is how we end up with an education system in desperate need of an overhaul but government unable to act because political support from unions comes with strings attached. 

Everywhere in the world, government and interest groups, like organised labour, engage at arm’s length to ensure the public interest comes first before any organized group. Of course, the only way to truly serve the public interest is by ensuring we respect the rule of law. 

The establishment of the rule of law cannot exist alone in speeches and conversations, we have to achieve it on the ground and on a daily basis. This requires the political will to tackle lawlessness head on. We have to strengthen our law enforcement capacity and judicial system with greater resolve than those who break the law. 

We have to achieve policy certainty in our country. The international and local business communities have to know with certainty where we stand on critical policy matters. The world, and Africa specifically, is becoming an increasingly competitive economic environment. Investors have choices where to go with their funds and they will go where the greatest prospects of stable economic returns exist.

We cannot afford to have leaders who respond to a falling Rand by saying: "If the rand falls, we will pick it up."

In Johannesburg, a six-way multi-party coalition government took office in 2016 and we began a new era of change, that is to become a catalyst for growth in South Africa. However, as a local government, we have our work cut out for us. 

Our challenges are characterised by massive institutional backlogs, a broken down rule of law, a red-tape laden bureaucracy and a civil service in need of reform. We immediately adopted a program of prioritising the work of government that addresses the enablement of economic growth and social redress. 

We cut the non-essentials and luxuries of government and set about to invest more money than ever before, just under half a billion, in addressing infrastructural and social backlogs. Investment levels in our road network, electricity grid and water pipelines have seen greater levels of investment than ever before. 

We have begun investing in a rapid expansion of housing, extending clinic hours and offering the City’s first free substance abuse facilities to address the social problems that plague our communities. We have focused on the work of making Johannesburg a safer place, initiating the recruitment of 1500 new metro police officers and establishing specialised units. 

Soon, we will have fully operational municipal courts, presided over by magistrates and prosecutors, to ensure no offence is to minor to escape the rule of law in our City. 

Already, in the last year, more arrests were affected by our Metro Police than the four years combined between 2010 and 2014.  We have waged war on the corrupt who betray the public trust and privilege to serve the people of our City. Under the leadership of one of the country’s foremost criminal investigators, General Shadrack Sibiya, the City now has over 4 000 cases under investigation totaling more than R24bn. 

Earlier this year, the City launched Operation Buya Mthetho, which is a multi-departmental initiative aimed at enforcing by-laws and bringing back the rule of law to the City of Johannesburg. 

Through Operation Buya Mthetho, we have already collected more than R1 billion million from some of the more than 2 000 businesses whose accounts were connected to our services illegally and abused our by-laws. We are extremely proud to have inspired the South African Police Service (SAPS) to adopt the project provincially. 

To make it easier to do business in Johannesburg, a multi-disciplinary fast-track committee has been established so we can create an enabling environment for growth. 

Times for approving building plans, rezoning applications, applying for service connections and the like are beginning to show decline. All in all, it is all about changing red-tape into red-carpet for our business community. 

Money held by investors doesn’t concern itself with race or petty politics. It goes where it will earn a reasonable return. We want to make Johannesburg the destination of choice. Even in the face of this, we remain clear of one thing, there can no room to celebrate when growth remains over-shadowed by staggering backlogs. However, what it does demonstrate is that change has taken root in Johannesburg.

From an early stage, we have committed ourselves to raising Johannesburg’s economic growth rate to 5% by 2021, minimum, and the ambitious Johannesburg Inner City Rejuvenation Project which would serve as a catalyst towards that goal.

In September 2017, the City Council approved the Inner City Plan, which is a long-term development program that seeks to address spatial, social, and economic inclusion in our City – a project that will achieve people living, working, and enjoying life in the city.

We are working to ensure that the Inner City boasts an enabling environment for small businesses to flourish and create permanent jobs.

We must also embrace the fact that the best way to succeed in eradicating poverty and inequality is through Public Private Partnerships. In that regard, we say Johannesburg is open for business, not just in words but also in deed. 

We have offered 84 buildings to the private sector, to be renovated for purposes of being turned into low-cost affordable housing, student accommodation as well as space for small businesses. We are looking to turn our Inner City into a construction site by rebuilding much of a city which had been allowed to rot and fall into the hands of criminal syndicates.

Without the private sector and external investment, we cannot succeed. We operate off the clear understanding that our relationship with business requires government to pave the way for the private sector to unleash its potential and its balance sheet in our City where profits can be made, jobs created and the most pressing needs of our City met with greater efficiency and speed than the highly regulated space of government could ever dream of. 

Just two weeks ago, we announced the biggest investment in the City of Johannesburg, a R2bn investment into the Inner City of Johannesburg by Divercity, a property fund created by some of South Africa’s leading property development companies as well as a leading financial services institution.

We will be doing a sod-turning event very soon to mark the beginning of Divercity’s development of Jewel City, including the ABSA Towers, as a six-block urban precinct redevelopment, releasing 2 800 affordable apartments into the market and extensive retail space. 

But we are equally clear that we need the investing and the business community to assist our project of transformation in our economy. As the City of Johannesburg, we are determined to build an inclusive economy and as such, genuinely Broad Based Black Economic Empowerment (BBBEE) will be an important yardstick in how we achieve this goal, particularly in relation to this project. Therefore, we will give preference to companies with the best BBBEE credentials.

We are clear that we do not want the fly-by-nights of the past, trading off political connections rather than ability to handle the projects. This is an ambitious and historic project that we are undertaking and, as such, we want companies who will succeed based on know-how, and not know-who. 

In assessing the socio-economic landscape of South Africa no single issue has greater importance than economic growth and job creation. It is against this backdrop that Johannesburg bucked the national and provincial trends and achieved an additional 109 000 jobs in the first two quarters of 2018 reducing unemployment levels by 1.5%. However, even this is not enough.

At the center of so many of our problems, whether it be landlessness or crime or housing, lies the fact that millions of South Africans do not have work. As long as this remains the case, the demands of communities will always overshadow the capacity of government to meet them. 

Ultimately, with the dignity of work, people are able to develop their own lives, and those of their families, far better and more efficiently than any government can achieve. This is a universal truth anywhere in the world. 

In Johannesburg we are passionate about the role our City must play in driving our country forward and being the catalyst for growth. 

- Herman Mashaba is executive mayor of the City of Johannesburg.

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