While South Africa has made remarkable progress since 1994, our economy has stalled.
We are neither creating the jobs we need nor advancing social cohesion. Unemployment is rising and more than 30 million South Africans live in poverty.
Investment levels have fallen, economic confidence is low and the country risks falling into a fiscal trap.
This is explained in part by the state of the global economy, which has not fully recovered from the financial crisis of 2008.
But we must also acknowledge that the current economic situation is the result of missteps in our policy interventions, weaknesses in collective decision making and poor execution of policies and strategies, combined with the damaging effects of state capture and corruption.
For the first time since the advent of democracy, there is a real chance that the transformation of our country may suffer significant reverses.
We must act now – boldly, decisively and collectively – to change the trajectory of our economy and our country.
We need a new deal for jobs, growth and transformation that will turn the economy around and build a more equal society.
This new deal must bring together government, business, labour and civil society in a meaningful social compact to construct a prosperous, just society founded on opportunities for all.
This does not represent a change in policy direction.
The new deal must be guided by the National Development Plan, the policies of the ANC and the electoral mandate which we have received from our people.
It will require commitments from each of the social partners.
Government needs to rid the state of corruption, ensure policy consistency and certainty, promote macroeconomic stability, address weaknesses at state-owned enterprises (SOEs), and ensure better use of public resources in infrastructure, education and health.
Business needs to significantly increase investment in the productive economy, promote job creation and youth internships, pursue efforts to reduce wage inequality and implement the national minimum wage, pursue employment equity, transform supply chains to support emerging black businesses, ensure greater worker involvement in decision making, and root out corruption, collusion and other anticompetitive behaviour.
Labour needs to promote industrial partnerships, market stability and effective conflict resolution.
It needs to strengthen collective bargaining, confront corruption and waste, and work with employers to improve productivity.
For the economy to recover and thrive, we need to:
. Place the creation of decent jobs at the centre of every policy, programme and action.
All social partners together need to lead a national initiative to create at least 1 million jobs in five years.
Largely manufacturing-led, this drive should be underpinned by the right mix of special economic zones, tax and other reforms, incentives, and small and medium-sized enterprise (SME) development;
. Have an unrelenting focus on growth and investment.
We should be targeting 3% gross domestic product growth in 2018, rising to 5% by 2023.
An immediate priority is to restore confidence among investors by achieving policy certainty, improving institutional stability, restoring the credibility of the criminal justice system and demonstrating the political will to turn the economy around;
. Pursue meaningful economic participation for the poor.
SMEs must be placed at the centre of industrial, trade and other policies as they have the highest potential to create jobs.
We should accelerate land redistribution in combination with systems to improve land productivity and support new farming activity;
. Implement a macroeconomic policy that promotes growth and secures our economic sovereignty.
We must maintain fiscal discipline to ensure that our resources are directed to where they have the greatest developmental impact and are not diverted to servicing debt or populist projects.
We must not allow a situation where external creditors can impose conditions and limit our policy options;
. Accelerate the transfer of ownership and control of the economy to black South Africans.
We need to explore more effective and sustainable models of black economic empowerment through the participation of communities, entrepreneurs and workers.
We need to deconcentrate our economy, increase competition and increase the proportion of small and medium-sized businesses;
. Improve access for all to quality, relevant education.
Working together with education department officials and teacher unions, we should agree on a comprehensive agenda to improve the quality of education, especially in township and rural schools.
We need to move with urgency to provide free higher education for the poor;
. Revitalise and expand our manufacturing capacity.
This requires preferential procurement in both the public and private sectors to stimulate demand for local goods.
Our trade policy must diversify South Africa’s exports, together with well-targeted import substitution policies.
Manufacturing costs must be reduced by significantly improving Eskom’s financial and operational performance, ensuring effective energy price regulation, reviewing port tariffs and increasing investment in rail and road infrastructure;
. Maximise the impact of our infrastructure build.
We must build on the successful examples of investment in this sector and boost spending on critical infrastructure over the next five years to R1.5 trillion.
Private sector expertise must be brought in to complement the capacity of the state and to unlock resources.
There will be a greater focus on job creation, localisation, skills development of young artisans and engineers, and small business development;
. Restore the role of SOEs as drivers of economic growth and social development.
An immediate task should be to appoint boards and executives at strategic SOEs that are committed to transformation, skilled and experienced, incorruptible, and committed to public service.
Private capital should be considered on a co-investment or strategic partnership basis.
We need to explore the formation of a single SOE investment company that can manage all government’s investments in SOEs; and
. Confront corruption and state capture.
Immediate steps must be taken to remove from positions of responsibility those individuals who have facilitated state capture.
Law enforcement agencies must be strengthened and critical state institutions rebuilt.
A judicial commission of inquiry needs to be established without delay, and legal and criminal action must be pursued against the perpetrators.
We should establish a special anticorruption appropriation fund, through which the recovered proceeds of corruption will be channelled towards youth training and employment initiatives.
Progress towards the vision expressed in the Freedom Charter – that the people shall share in the country’s wealth – has suffered a setback in recent years.
Despite progress for much of the first two decades of democracy, South Africa’s economy still benefits only a few.
Through a new deal, we can build an economy that benefits all.
With the right leadership, with a competent and committed team, with a clear programme around which all social partners can unite, there is no reason the economy cannot be turned around and the process of economic and social transformation accelerated.
South Africa now has a unique opportunity to confront its challenges. Let us seize this and forge a new deal for jobs, growth and transformation.