Zuma missed an opportunity to back the little guy

South Africa is at a cross roads. You don't have to be a political analyst or economist to understand this. The average man on the street knows that times are tough. They see the cost of transport and basic food items steadily rising, leaving them with only loose change in their pockets and 8.3 million people remain jobless.

With growing discontent inside the ANC and the growing threat of a credit downgrade, it seems that Government and the ANC have finally woken up to how bad things are. Jacob Zuma’s SONA was an opportunity to set South Africa on a path to growth and recovery. Instead, he led a monolog filled with more promises and empty rhetoric sprinkled with a dash of back tracking.

There was, however, one programme that Zuma touted as an economic champion that would create ‘new manufacturing’ and bring about positive change, that being the Black Industrialists Programme.

It is surprising to see how little research or analysis has actually been done by economists on this programme because the results are quite frightening, leaving the opportunity for billions of Rands to be spent on a scheme which may not be all that it’s touted  to be.

On the 10th of February 2016, the Department of Trade and Industry briefed the portfolio committee on progress to date of the programme. Many figures were thrown about, a lovely slide show was given and everyone seemed to nod in acceptance however there was one glaring omission. “How many jobs will this programme actually create?” I asked Director General, Lionel October.

His response was astonishing. He had no idea. For all the research done by the DTI this is a very worrying response. In essence, the only jobs that will be created that we know of is the ‘industrialists’ themselves, so 100 to be precise and in all honesty, they're probably already self employed.

As I started to dig deeper, this became more obvious by the admission that the grant funding (meaning we won’t get it back) is actually to buy into already existing businesses. By now, you can start to work out that the Black Industrialists Programme is nothing more than a redistribution fund. There is no ‘industrialising’ going on what so ever.

To date, I am unable to figure out how this programme ‘creates’ industrialists. One does not ‘create’ an industrialist, they grow over time, amassing wealth through growing their business interests. Herman Mashaba is a great example of what a real industrialist is. His story is well known and something entrepreneurs should aspire to.

It also seems quite vague as to how these potential ‘industrialists’ will be chosen. So far it appears that a committee of some sorts will choose who gets the free money. If Governments track record in this regard and BEE to date is anything to go by, the opportunity for abuse to enrich cadres is massive. To me it seems the only thing missing on the official application form is space for someone to write their ANC membership number.

So if the programme is not going to create jobs and is going to make 100 people very rich, why are we doing it at all?

Surely at a time like this, we as a country need to be funding programmes that produce concrete job outcomes and diversify the wealth to a number of entrepreneurs, not the same group of already wealthy BEE beneficiaries. If they don't, we shouldn't be supporting them. The choice is that simple and that obvious with the limited funds we have. And there are a number of government schemes that do and can produce thousands of jobs.

The Manufacturing Competitive Export Programme (MCEP), which has run out of money because its so popular is one of them. It has defined job numbers that it produces and requires a job creation component to apply. The National Empowerment Fund (NEF) is another. The NEF suggests that if it is fully capitalised, it can support 80 000 jobs. At an average of 5 dependents per worker, that’s 400 000 people that can be positively empowered through government funding.

The big question is then, why choose 100 ‘industrialists' over 400 000 people? In truth, it’s about patronage and power. It is about making well-connected ANC cronies very wealthy. That is the bottom line. A case in point is the latest Eskom saga, where Duduzane Zuma, the president’s son, is about to receive ANOTHER coal contract from Eskom - his fourth.

In reality, he is using public money under the guise of “support for emerging industrialists” to get filthy rich because of his family connections, and we will all pay higher electricity tariffs because of it. It is legalised theft which has become the hallmark of the Zuma government and will continue for as long as he remains in power.

President Zuma had a great opportunity during his SONA to get on the side of entrepreneurs and government agencies that have proven track records of producing job related results. Instead, he has chosen what he knows best, making an elite few even wealthier.

Dean Macpherson MP is the DA Shadow Deputy Minister for Trade & Industry