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Does Mboweni have the tools to implement his plan?

Publish date: 12 September 2019
Issue Number: 4781
Diary: Legalbrief Today
Category: Economy

Finance Minister Tito Mboweni's new blueprint for SA's economic recovery, released last week, is uncannily similar to the much criticised Growth, Employment and Redistribution (Gear) plan. Mboweni's Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for SA plan, writes John Dludlu, executive for strategy and public affairs at the Small Business Institute, is a response to growing calls for action, as was Gear. 'As a diagnostic tool and conversation starter, Mboweni's paper is useful and contains some good ideas. Also, its implied admission that the country has no economic strategy and plan has to be commended.' But its proposed interventions are inadequate for the scale of the crisis, writes Dludlu in a BusinessLIVE analysis. He says the measures and attendant targets, for GDP growth, for example, are not ambitious enough and most reforms are incremental in nature and lack a sense of urgency. 'Others, such as the introduction of competition in areas of near state monopoly (such as ports, energy and rail), have plainly been on the cards for years. It is not clear how the state plans to expedite them this time around.' He notes that the plan will not likely find favour with radical economists as it is clear, from the document's bibliography, that the source of the Treasury's latest wisdom is the same orthodox thinking that was behind Gear. Dludlu says, as with Gear, government's biggest problem is the implementation of its plans, and 'a poor record in institution building'. 'The paper does not say how this problem, which is inextricably linked to the skills crisis, will be fixed.' Dludlu says ultimately, whether Mboweni's paper decisively moves SA's economy away from its jobless, low-growth trajectory will depend on how open he and President Cyril Ramaphosa are to fresh ideas. To government's credit, however, the plan, which has apparently been in the pipeline for some time, has been released for public comment and suggestions, saving the President from having to go to war for the document. Unlike former President Nelson Mandela, who had to put up a fight for Gear after dropping the Reconstruction and Development Plan, Ramaphosa has not immediately put his weight behind the proposals, and has 'sought to invite proposals to enrich the document, a move that gives him room to be persuaded otherwise'.

Full BusinessLIVE report

Treasury document