Johannesburg – Radical economic transformation has lost its credibility as a policy for inclusive growth, said former deputy finance minister Mcebisi Jonas.
Jonas was speaking at the Mapungubwe Institute for Strategic Reflection (MISTRA) lecture at the University of Johannesburg on Tuesday night. He shared insights on the role of fiscal and monetary authorities in helping or hindering radical economic transformation.
“South Africa’s economy is in need of an overhaul … There is no denial the economy must be radically transformed,” he said. However, with the approaching ANC elective conference in December combined with increasing populism, Jonas said it is difficult to subject the policy of transformation to democratic public reasoning.
Populism has resulted in distrust in the governing party, which has impacted on investing stakeholders. “Populism works best in low trust societies,” said Jonas.
“Populism defines friends and enemies and demands the state to behave in a partisan manner, break rules and bypass institutions established to hold the law.”
As a result, radical economic transformation has lost its credibility as a policy. “We must recast radical economic transformation as a genuine programme for inclusive growth around which society can be mobilised.”
Finance Minister Malusi Gigaba this week called on white-owned or established businesses to champion transformation by providing support networks for emerging black businesses.
“The economy of today still reflects our colonial and apartheid past,” said Gigaba. “We need white businesses to champion transformation and view it within the commercial interest of business.”
Treasury’s acting director general Dondo Mogajane clarified his views on radical economic transformation in Parliament. He said that inclusive growth is no different to radical economic transformation, Fin24 reported.
Among the measures to be taken to transform the economy include improving education and skills development, strengthening competition laws, improving governance at state-owned enterprises and overcoming the fragmentation that was caused by apartheid spatial planning, among other things, said Mogajane.