Why South Africa Needs Radical Economic Transformation
November 9, 2017
Opinion & Analysis
Nkosazana Dlamini-Zuma Correspondent
Zimbabwe Herald
Education, land, job creation and the role of women must be considered in efforts to build an inclusive developmental state. Any discussion about building a South Africa that belongs to all, and therefore about transforming the country’s economy, must acknowledge that we are one of the most unequal societies in the world. The Gini coefficient measures income inequality in a range from 0 to 1, where a totally unequal society will score a 1. Ours ranges from 0,66 to 0,69.
In the world’s most equal societies, the top 10 percent earn about six times as much as the bottom 10 percent. In South Africa, the top 10 percent earn 110 times more than the bottom 10 percent. South Africa operates in a global economy where 75 percent of cities across the world have become more unequal over the past two decades, according to the UN Habitat World Cities Report 2016. Increased inequality is therefore not a uniquely South African phenomenon.
However, there are some uniquely South African causal factors, including the legacy of the well-oiled exclusion machinery of apartheid, consisting of the tight framework of laws and spatial planning that permeated and stifled every aspect of the lives of blacks. The most adverse effects were on African women. This fact made the erstwhile colonial project a “colonialism of a special type”.
The dawn of democracy made it possible for the ANC government to repeal apartheid laws and to introduce measures to progressively address many of the social consequences of apartheid. Sadly, the overall structure of the economy that had been put in place under apartheid has remained largely untransformed. Consequently, while the introduction of a social wage (housing, education and healthcare, water and sanitation, social grants) has helped improve the lives of many, the lack of economic transformation and redistribution means the continuation of deep-seated and structural inequalities based on race, gender and geography.
This lack of transformation is reflected in the structure of the South African economy, in a world where production value chains have become global, where Africa is working to claw out its own space, and where some are moving towards the fourth industrial revolution.
Fundamental change
South Africa must take concerted measures to tackle the deeply ingrained domestic fault lines, the increasing chasm between the rich and poor, and define its space within the African and global economy. The divide between rich and poor, if left unattended, will be to the detriment of all of society, as the poor and marginalised cannot continue to occupy the fort of patience.
Consequently, the radical economic transformation agenda is to the benefit of all South Africans. It is an agenda directed at the large army of the unemployed and poor, to build an economy and society that include everyone, as a precondition for stability.
This is why the ANC has made a concerted effort to focus on radical economic transformation. This will provide a fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor — the majority of whom are young, African and female. Such a path will secure a developmental state which places people at its centre without leaving anyone behind. Inclusivity is at the centre of our approach.
This focus is fundamental to building the society envisaged in our Constitution.
It must include:
1. A targeted intervention in our education and training system to ensure that every school has the basic norms and standards to enable learning. There must be investments in teacher and curriculum development. Science, technology, engineering and mathematics must be strengthened, and there must be free and quality education.
This must be accompanied by a skills revolution which gives school leavers and the young unemployed the ability to contribute to society.
All of this should be underpinned by patriotic pupils who know their history and have a Pan-African and global perspective.
2. Resolving the historical injustice of land dispossession, so that all South Africans have access to land for housing, businesses and other social infrastructure and can help grow agriculture and agro-processing. South Africa and other countries in the region should aim to become a player in the continental and global food markets. They must help play a significant role in reducing the over $70bn bill (about R999.1bn) we spend on importing processed food into the African continent.
3. Placing growth, job creation and industrialisation at the centre of our macroeconomic policies, along with the mandate of the developmental state, state-owned entities, and the partnership between government, business and labour.
4. Having a green (environmentally sensitive) approach, with a strong emphasis on unlocking the blue economy, as a part of our job creation strategy. Our continental shelf as a source of food, tourism and marine manufacturing is badly underdeveloped and holds huge potential for growth, especially job creation.
5. For trade to succeed, the whole value chain has to be integrated seamlessly. It starts with raw materials and includes production, processing, transportation, storage and sales. Our government, other African governments and the private sector have to cooperate to improve infrastructure on our continent.
The current situation, where it is more expensive to transport goods from South Africa to Zambia than to the UK cannot be allowed to continue.
6. The role of women in the professions and management and easing their access into mainstream industries should be prioritised. Our society is still sexist and patriarchal and women quickly hit a glass ceiling in most industries. We must empower women.
Our focus on growth with redistribution means a review of current models of black economic empowerment. We must ensure that it not only empowers individuals, but also communities and employees. There must be a determination on the “once empowered, always empowered” principle to bring it in line with our goal of fundamentally changing ownership patterns.
For South Africa to truly belong to all — black and white, women and men, young and old — we must make it possible for everyone to be part of the economy and to benefit equitably on a level playing field. The developmental state in South Africa should make use of all its available resources to do so.
To unite South Africa around this mission requires a united and vibrant ANC. It must have the integrity, capacity, determination and capabilities to lead society. The ANC, as the movement which is most trusted by the people of South Africa, has a historic and current obligation to ensure that on this journey of transforming our economy, no one is left behind.
Nkosazana Dlamini-Zuma is an ANC MP, former chairperson of the African Union Commission and former Cabinet minister
Opinion & Analysis
Nkosazana Dlamini-Zuma Correspondent
Zimbabwe Herald
Education, land, job creation and the role of women must be considered in efforts to build an inclusive developmental state. Any discussion about building a South Africa that belongs to all, and therefore about transforming the country’s economy, must acknowledge that we are one of the most unequal societies in the world. The Gini coefficient measures income inequality in a range from 0 to 1, where a totally unequal society will score a 1. Ours ranges from 0,66 to 0,69.
In the world’s most equal societies, the top 10 percent earn about six times as much as the bottom 10 percent. In South Africa, the top 10 percent earn 110 times more than the bottom 10 percent. South Africa operates in a global economy where 75 percent of cities across the world have become more unequal over the past two decades, according to the UN Habitat World Cities Report 2016. Increased inequality is therefore not a uniquely South African phenomenon.
However, there are some uniquely South African causal factors, including the legacy of the well-oiled exclusion machinery of apartheid, consisting of the tight framework of laws and spatial planning that permeated and stifled every aspect of the lives of blacks. The most adverse effects were on African women. This fact made the erstwhile colonial project a “colonialism of a special type”.
The dawn of democracy made it possible for the ANC government to repeal apartheid laws and to introduce measures to progressively address many of the social consequences of apartheid. Sadly, the overall structure of the economy that had been put in place under apartheid has remained largely untransformed. Consequently, while the introduction of a social wage (housing, education and healthcare, water and sanitation, social grants) has helped improve the lives of many, the lack of economic transformation and redistribution means the continuation of deep-seated and structural inequalities based on race, gender and geography.
This lack of transformation is reflected in the structure of the South African economy, in a world where production value chains have become global, where Africa is working to claw out its own space, and where some are moving towards the fourth industrial revolution.
Fundamental change
South Africa must take concerted measures to tackle the deeply ingrained domestic fault lines, the increasing chasm between the rich and poor, and define its space within the African and global economy. The divide between rich and poor, if left unattended, will be to the detriment of all of society, as the poor and marginalised cannot continue to occupy the fort of patience.
Consequently, the radical economic transformation agenda is to the benefit of all South Africans. It is an agenda directed at the large army of the unemployed and poor, to build an economy and society that include everyone, as a precondition for stability.
This is why the ANC has made a concerted effort to focus on radical economic transformation. This will provide a fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor — the majority of whom are young, African and female. Such a path will secure a developmental state which places people at its centre without leaving anyone behind. Inclusivity is at the centre of our approach.
This focus is fundamental to building the society envisaged in our Constitution.
It must include:
1. A targeted intervention in our education and training system to ensure that every school has the basic norms and standards to enable learning. There must be investments in teacher and curriculum development. Science, technology, engineering and mathematics must be strengthened, and there must be free and quality education.
This must be accompanied by a skills revolution which gives school leavers and the young unemployed the ability to contribute to society.
All of this should be underpinned by patriotic pupils who know their history and have a Pan-African and global perspective.
2. Resolving the historical injustice of land dispossession, so that all South Africans have access to land for housing, businesses and other social infrastructure and can help grow agriculture and agro-processing. South Africa and other countries in the region should aim to become a player in the continental and global food markets. They must help play a significant role in reducing the over $70bn bill (about R999.1bn) we spend on importing processed food into the African continent.
3. Placing growth, job creation and industrialisation at the centre of our macroeconomic policies, along with the mandate of the developmental state, state-owned entities, and the partnership between government, business and labour.
4. Having a green (environmentally sensitive) approach, with a strong emphasis on unlocking the blue economy, as a part of our job creation strategy. Our continental shelf as a source of food, tourism and marine manufacturing is badly underdeveloped and holds huge potential for growth, especially job creation.
5. For trade to succeed, the whole value chain has to be integrated seamlessly. It starts with raw materials and includes production, processing, transportation, storage and sales. Our government, other African governments and the private sector have to cooperate to improve infrastructure on our continent.
The current situation, where it is more expensive to transport goods from South Africa to Zambia than to the UK cannot be allowed to continue.
6. The role of women in the professions and management and easing their access into mainstream industries should be prioritised. Our society is still sexist and patriarchal and women quickly hit a glass ceiling in most industries. We must empower women.
Our focus on growth with redistribution means a review of current models of black economic empowerment. We must ensure that it not only empowers individuals, but also communities and employees. There must be a determination on the “once empowered, always empowered” principle to bring it in line with our goal of fundamentally changing ownership patterns.
For South Africa to truly belong to all — black and white, women and men, young and old — we must make it possible for everyone to be part of the economy and to benefit equitably on a level playing field. The developmental state in South Africa should make use of all its available resources to do so.
To unite South Africa around this mission requires a united and vibrant ANC. It must have the integrity, capacity, determination and capabilities to lead society. The ANC, as the movement which is most trusted by the people of South Africa, has a historic and current obligation to ensure that on this journey of transforming our economy, no one is left behind.
Nkosazana Dlamini-Zuma is an ANC MP, former chairperson of the African Union Commission and former Cabinet minister
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