TOXIC POLITICS DESTROYING SOUTH AFRICA’S ECONOMY, SAYS DEPUTY FINANCE MINISTER
A toxic political culture is destroying the economy of South Africa and is something which needs to be challenged and addressed, says Deputy Finance Minister Mcebisi Jonas.
Addressing the Federation of Unions of South Africa (Fedusa) 6th National Congress in Ekurhuleni, east of Johannesburg, on Thursday, he noted that the government had stressed, yet again, that the country was likely to grow at less than 1.0 per cent this year.
he said that this was because of a continued commodity down-cycle, subdued business confidence and weak consumption spending, compounded by a toxic political environment in the country.
"I think we must be very upfront and say that our politics are increasingly becoming an impediment for economic growth in our country, and when I say bad politics, I mean bad politics that focuses on sectoral minority interest as opposed to country's interests," Jonas added.
"We need to bring back our country to the centre of politics beyond organizational formations, and if our organizations can't deliver that South Africa, we must be man and woman enough to stand up to our leaders and say 'You are not doing what you are supposed to do'."
Jonas warned against being overly optimistic about positive growth witnessed in certain sectors of the economy in the second quarter.
"If you look at the performance in the second quarter many people are saying these are green shoots, and again I say, 'How sustainable is that' ... and my argument is, unless certain things happen, that (performance) can actually be reversed very easily."
He urged members of Fedusa to address issues that make South Africa vulnerable to external economic shocks.
"We are a very small and open economy, that is susceptible to shocks externally; we must address this -- that is the discussion that we must have -- what are the sources of our vulnerability as an economy?," Jonas said.
"I think we are vulnerable because we have become too dependent in foreign investment to finance our own growth and development ambitions; as government, we have become indebted to both foreign and domestic lenders... that makes us vulnerable to currency fluctuations and monitory policies elsewhere."
Jonas says he is worried about the low levels of fixed capital investment that also contributes to the country's economic vulnerability. South Africa needs to grow its fixed capital investment to about 30 per cent to build a resilient economy. The Deputy Minister says the country needs another national dialogue, and a new national consensus that will transform the economy.
"Continuation of our existing growth model of slow growth and inequality will only increase spending pressure in welfare, security and debt servicing -- and this is one of our fiscus space where we have growing welfare, security and debt servicing," he added.
"When your economy is not growing, it actually means that you have to have more social protection, and to have this you must shift resources and that is the reality that I think as South Africans we need to talk about."
Source: NAM NEWS NETWORK.