Zuma sheds light on radical economic transformation vision

Cape Town - President Jacob Zuma on Thursday night set out exactly what the ruling party means when it says radical economic transformation needs to take place in South Africa.

READ: How rand reacts to Zuma's SONA

Delivering his State of the Nation Address (SONA) to a scantly occupied National Assembly Chamber, Zuma quoted from a speech by former ANC president Oliver Tambo, who had said radical economic transformation required a fundamental change in the structure, systems and ownership patterns of the economy.

Zuma said government will, in the coming year, through regulations and programmes be able to use the state’s buying power to empower small enterprises, rural township enterprises and promote local industrial development.

One of the ways in which government will enforce broader economic participation is to draft new legislation to counter economic concentration.

READ: Economy growing, but not enough to create jobs - Zuma

Zuma said a small grouping still controls most of the market. “During this year, the Department of Economic Development will bring legislation to cabinet that will seek to amend the Competition Act to address the need to have a more inclusive economy and to de-concentrate the high levels of ownership and control we see in many sectors.”

He acknowledged that South Africa’s competition authorities have done excellent work to uncover cartels and punish them for breaking the law.

“Last year I signed into law a provision to criminalise cartels and collusion and it came into effect on 1 May. It carries jail sentences of up to ten years. We are now stepping up our actions to deal with the other challenges, namely economic concentration.

“In this way we seek to open up the economy to new players giving black South Africans opportunities and make it more dynamic, competitive and inclusive. This is our vision of radical economic transformation."

READ: Zuma lauds Ramaphosa over national minimum wage deal

Zuma also bemoaned the fact that there are still vast differences between the disposable incomes of black and white households.

“The situation with regard to ownership of the economy mirrors that of household incomes. The skewed nature of ownership and leadership patters needs to be corrected.”

Zuma said there can be no sustainability in any economy if the majority is excluded in this manner.

“In my discussions with the business community these transformation imperatives were accepted. Today we are starting a new chapter of radical socioeconomic transformation. We should move beyond words to practical programmes,” Zuma said.

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