Only people power can save SA’s economy

26 November 2020

This past week tech entrepreneur Elon Musk surpassed Microsoft founder Bill Gates to become the world's second-richest person while the country of his birth, South Africa, got downgraded deeper into junk status by two of the big three ratings agencies.

Could Musk have achieved what he has if he’d stayed in South Africa? Will he be investing in South Africa any time soon? Not likely.

And nor will many other potential investors. Which should concern all of us, because South Africa’s economy – our lifeline – is in very serious trouble. We are heading for a sovereign debt crisis which as Finance Minister Tito Mboweni has pointed out will lead swiftly on to a banking crisis. Unemployment is at an all-time high of 43%. This is an unnatural level of joblessness and there is nothing Ramaphosa can say to investors to get that number down. Only real reform will do it and if ratings agencies don’t believe that’s going to happen, people shouldn’t either.

South Africans cannot sit this out and trust the ANC’s talk of economic recovery even as their actions - or lack thereof - spell economic suicide. For as long as the ANC controls SA’s economy, we’re heading straight for Zimbabwe. The only way to save our economy is to get economic decision-making power out of the hands of the ANC and into the hands of ordinary people.

And only the people of South Africa can achieve this.

And they can only achieve it at the ballot box.

The ANC has constructed a system of disincentives that repel entrepreneurs and investors like Musk. Most investors will stay away while the ANC hangs out policies like expropriation without compensation, BEE, NHI, Reserve Bank nationalisation, asset prescription, the Mining Charter, Eskom’s monopoly, inflexible labour legislation and the propping up of failed state-owned companies, all of which red flag our country as a no-go zone for investment.

Entrepreneurs and investors are freedom-loving by nature and necessity. That’s why economic freedom and prosperity go hand in hand in economies across the globe. The DA understands this, and we have pushed relentlessly for open energy and labour markets, for secure property rights, for workers’ pensions and medical aids to be protected from a ravenous state. We believe every policy decision in South Africa must aim to put more economic decision-making power into the hands of ordinary people.

Freedom equals prosperity. Power to the people.

The DA have worked relentlessly to create an attractive environment for investment in the Western Cape, so it is gratifying that Google has decided to invest R2.2 billion there despite the ANC’s repellent policy framework at the national level.

If Ramaphosa is serious about attracting investment into South Africa, then he needs to offer real incentives through economic reform. Soothing sentiments at investment summits are not going to cut it, as the ratings agencies know. Investors respond to nothing except the real opportunity to make profits. And that’s a good thing. There wouldn’t be multiple covid vaccines in the pipeline were it not for the profit incentive.

Ramaphosa’s ANC is long on talk but short on action. They endlessly promise reform but have made almost no progress. They call for a week of mourning for GBV victims but reinstate to the ANC’s Mpumalanga executive committee a former MEC who stands accused of raping his two daughters.

They profess concern for the poor but then dip into health and education budgets to subsidize air travel for the rich. They condemn Malema’s incitement to violence against police officers but fall short of charging him. They are all talk, no action. They have lost all credibility.

As we slide deeper into junk status it will be harder and more expensive to get the funding we need to continue living beyond our means. With every day that passes, we dig the debt hole deeper and it gets harder to get out. Next year’s local government elections are a crucial opportunity for voters to use the power of their vote to take back their economic decision-making power. Please don’t sit this out. Vote DA for a people-powered economy that offers the chance of profits to the likes of Musk, and prosperity to all

Warm regards,

John Steenhuisen

DA Leader