President of the Republic of South Africa, Mr Jacob Zuma delivered his State of The Nation Address (SONA) last evening. The President went to great lengths about a number of topics ranging from the economic landscape, the triple challenges of unemployment, poverty and inequality, crime and more pressing issues. In the run-up to the SONA, we have witnessed a concerted focus on the issue of radical economic transformation.
President Zuma started his transformation talk by stressing out the objective of our struggle in South Africa, as set out in the Freedom Charter, encompassing economic emancipation. “It is inconceivable for liberation to have meaning without a return of the wealth of the country to the people as a whole,” he explained. Zuma further elaborated that the term radical socio-economic transformation means 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 African and female, as defined by the governing party which makes policy for the democratic government.
According to the National Empowerment Fund, only ten percent of the top one hundred companies on the Johannesburg Stock Exchange are owned by black South Africans, directly-achieved principally, through the black empowerment codes. “The pace of transformation in the workplace, the implementation of affirmative action policies as required by the Employment Equity Act, also remains very slow,” said Zuma.
In terms of the 2015/16 information submitted to the Employment Equity Commission, the representation of whites at top management level amounted to 72 percent whilst other racial groups make up the rest. Zuma said the skewed nature of ownership and leadership patterns needs to be corrected. “There can be no sustainability in any economy if the majority is excluded in this manner. In my discussions with the business community, they accepted these transformation imperatives,” he explained. “Today we are starting a new chapter of radical socio-economic transformation. We are saying that we should move beyond words, to practical programmes”.
The state will play a role in the economy to drive that transformation. In this regard, Government will utilise to the maximum, the strategic levers that are available to the state. This includes legislation, regulations, licensing, budget and procurement as well as Broad-based Black Economic Empowerment Charters to influence the behaviour of the private sector and drive transformation. The State spends five hundred billion rand a year buying goods and services. Added to this is the nine hundred billion rand infrastructure budget. Those budgets must be used to achieve economic transformation. “As a start, the new regulations making it compulsory for big contractors to subcontract 30 percent of business to black owned enterprises have been finalised and were gazetted on the 20th of January,” said Zuma. Through such regulations and programmes, government will be able to use the state buying power to empower small enterprises, rural and township enterprises, designated groups and to promote local industrial development.
The president concluded his transformation talk by stating that government will seek to open up the economy to new players, give black South Africans opportunities in the economy and indeed help to make the economy more dynamic, competitive and inclusive. “This is our vision of radical economic transformation,” he concluded.Share this article on Social Networks