A Letter to the President on Economic Recovery

"You used language like ‘we must’ when you should have said ‘we will’. You say ‘it could’ when you should have said ‘it will.’ I do not believe that even you have confidence in your own plan."

Herman Mashaba
Add your signature to Herman Mashaba's letter to the President.

Dear Mr President,

Your economic recovery plan tabled on Thursday did not fail to disappoint.

I have never been a fan of yours and I should put that on the table. With President Zuma, in spite of all of his faults and the rampant levels of looting, there was at least a sense that he was in charge. With your Presidency, it looks like nobody is in charge.

Your address on Thursday was possibly the biggest opportunity South Africa has had to make a shift in a new direction.

You used language like ‘we must’, when you should have said ‘we will’. You say ‘it could’ when you should have said ‘it will.’ I do not believe that even you have confidence in your own plan.

At a time when we needed bold leadership, you delivered platitudes. At a time when we needed decisive action, you provided more of what has failed in the past. At a time where we needed a plan for real jobs, you delivered temporary work opportunities.  

You laid out a plan of expenditure which lacks even the slightest sense of where the money would come from. Our tax deficit stands at R360 billion and counting, our debt to GDP ratio stands at 81%, the cost of servicing debt is now more than our expenditure on education or policing. And yet you announced more spending without offering any sense of where these funds will come from.

You delivered a long list of projects amounting to a 4 year, R2 trillion infrastructure plan. It does not represent a massive investment in infrastructure, it represents the same investment that has been promised by President Zuma.  

You deliver this infrastructure plan without reference to the problem that it will have to be delivered by the very same governments that have failed, looted and mismanaged with impunity.

You stood before us and spoke of 2 million jobs lost in the 2nd quarter of 2020. Instead of real economic reforms that bring back real jobs, you promised 800 000 temporary work opportunities created by government. You made no mention of the 10 million unemployed and the 14.6 million South African who are now ‘not economically active.’

I have seen your work opportunities; ad-hoc work reserved for ANC members. I noted that you even acknowledged this when you stressed that the work would be fairly allocated, but I know that you realise that your Premiers and Mayors will exploit this ahead of the 2021 elections.

You speak of sorting out ESKOM and its separation of its generation, distribution and … functions, despite the fact that your tripartite alliance and your own Secretary General have come out saying it will never happen. You speak about independent power production to a nation, living under constant threat of load shedding, when your own Minister has done nothing to provide licenses since you announced this in 2019.

If there is anything that your speech has affirmed is that the work of establishing ActionSA, could not be more important.

South Africans waited for this address after months of suffering. Reals jobs were lost, businesses have collapsed and the livelihoods of South Africans taken. They needed some sign that their future would deliver a path to prosperity, that the depths of economic depression would jolt government to make the changes our economy needs.

This is what I believe South Africans needed to hear from you on Thursday:

  1. The Re-Arrangement of the National Budget

As too many South African households know, when your income is reduced, you need to re-arrange your budget.

Our government will be no different.

South Africa needs a massive amount of money freed up so that we can spend extensively on our infrastructure, on education, on safety and on incentivising investment.

This requires the political will to make tough decisions.

We will cut our bonds to state-owned entities like SAA into which billions have been sunk without any promise of recovery.

We will reduce our civil service wage bill, which was more than doubled from R340 billion in 2010 to R745 billion in 2019, and end the era of government acting as a cadre employment agency. 

You need to provide leadership in the reduction of civil service by reducing the size of your cabinet. South Africa can do with a maximum of 25 Ministers, without a single Deputy in place.

In its place has to be record breaking levels of expenditure in stabilising our electricity grid, investment in roads and rail, building of hospitals, schools and universities, providing access to free WiFi and delivering electricity and water to more communities.

  1. The Reform of Labour Legislation in South Africa

South Africa now sits with 42% unemployment with 2.2 million jobs lost in 2020 so far.

The labour laws of our country make it difficult to hire South Africans at a time when we need to make it easier. They protect those who are employed for now, at the expense of those who could be employed but, are not.

It is a crime in South Africa, that millions of people who live without the dignity of work, while our labour laws discourage businesses from employing more people.

We will embark on a fundamental review of South African labour laws that will encourage businesses to hire more of our citizens.

The rights of workers must certainly be protected, but not at the expense of the millions of South Africans who are without the dignity of gainful employment.

  1. The End of Trade Union Dominance

I am fully aware that what we propose will involve a fallout with trade unions.

The Tripartite Alliance has given trade unions more power than any other stakeholder in our economy.

Who voted for the trade unions to hold this kind of power over the people of our country?

Trade unions must be offered a seat at the table as a key stakeholder, but, alongside, and equal to every other key stakeholder in our economy.

If this means a showdown with the trade unions, so be it, because we will never advance, so long as we have to wait to hear whether the economic direction set by an elected President, is approved by the unions.

  1. An Education Revolution in South Africa

ActionSA offers the promise of a revolution in education.

Despite spending a large proportion of our budget on education, our education system graduates learners to a life with little hope or opportunity.

ActionSA promises to overhaul the entire curriculum, and orientate it in line the 4th Industrial Revolution and the future world of work.

We need to teach entrepreneurship to our learners so we can become a nation of employers, not just employees.

Teachers and principals need to be trained, performance managed, and replaced where necessary, because the future of our children have to be left in the most capable hands.

ActionSA offers the building of more universities, teachers, and nursing colleges, as well as FET and vocational schools.

This education must be made affordable to all, because without education, there is no prosperous future for our youth.

Municipalities must invest in early childhood development centres. Aside from giving parents a safe place for their children when they go to work, early childhood education has proven essential for equipping children to enter formal schooling. It is a proven fact that teaching the skills of learning early on, helps reduce the dropout rate in high school.

  1. Doing Business in SA must be Easier

For our economy to grow, it must be easier for new businesses to setup here, and for existing businesses to conduct their activities.

We will establish business support hubs where SMMEs can receive immediate support with registration, tax compliance, municipal electricity, and water connections, and a host of other requirements.

We will nurture a nation of entrepreneurs, and empower them with the skills, and support they need in order to grow their businesses and employ more South Africans.

Small and medium sized businesses in South Africa are drowning in reporting and compliance requirements that add no value to the bottom line, this will end. Bureaucratic red-tape must be removed, and a review of all legislation undertaken to eliminate barriers to conducting business.

The constant moving of goal-posts of compliance will end, and the failed BBBEE policy needs to be relegated to the rubbish dump of our history.

In its place will be a new set of policies that incentivise redressing the legacy of our past, rather than the malicious and cumbersome compliance to failed policies that we see today.

  1. We Need to Become a Nation of Employers and not just Employees

Ladies and gentlemen, the engine room of our future economy must lie with small businesses.

What we need is a government that ignites the potential in our country by equipping small businesses with the skills, support, and experience that will allow them to flourish.

Our education system must be reformed to include an entrepreneurial stream that will equip young people leaving school with the knowledge, skills, financial know-how and inspiration to start a small business.

We will partner with commercial banks to provide innovative and alternative funding options to entrepreneurs, backed by government.

We will declare small businesses tax-exempt in the early years of their establishment, and incubation facilities must be opened across the country in partnership with the private sector.

  1. The Rule of Law Must Prevail

My fellow South Africans, no economy can grow in a state of chaos and anarchy.

Put simply, when a crime is committed, a criminal must be arrested, prosecuted and jailed. It is just that simple.

An essential part of this is the need to address corruption as another barrier to growth.

What we need is to send a strong message of intent. High-profile cases of corruption must be brought before the courts. Individuals found to be corrupt, must be prosecuted and jailed without fear or favour.

We will now begin the work to secure the borders in our country. South Africa, like any other sovereign country, must control who and what enters through her borders.

We will allow entry to those entitled in accordance to our laws, and deny entry to those who wish to take advantage of the vulnerability our government has created.

Agriculture is not just a strategic industry in our country’s economy, it feeds this nation. If doctors or teachers were subject to such levels of criminality, we would act more decisively because we deem healthcare and education important functions in our society.

The same concern has to extend to agriculture.

Just like we need a policing strategy to address priority crimes like drug dealing, and gender-based violence, we will deliver a policing strategy for the farming communities of our country.

  1. The Low Hanging Fruit that Need to be Plucked

In Johannesburg alone, 154 hijacked buildings were handed to the private sector, with plans to generate R32 billion in investment, thereby creating 12 000 construction sector jobs, and offering affordable housing to those needing a minimum of 3 taxis in commute to seek work.

Imagine the possibilities of replicating this across the cities and towns across our country!

In the past industrial areas like Babelegi, Garankuwa, Mogwasi, XwaXwa, Seshego and many others meant that the people who did not work, were those who did not want to work.

Hundreds of these factory facilities lie empty today, while the communities around them have unemployment figures approaching 70%, and our manufacturing industry is in sharp decline.

We will begin handing these facilities over to the private sector on the basis of how much they will invest and how many jobs they will create in their operations.

South Africa has many similar examples where opportunities, just like those factories, lie empty awaiting the simplest actions to generate job-creating activity.

  1. Uncompromising Execution of Economic Policy

It is important to note that the greatest issue impacting South Africa’s economic growth does not lie with policy, but rather with implementation, where words do not translate into Action.

Furthermore, we will put great effort to professionalise the civil service and effectively execute a plan where their mandate does not get confused by political flip-flopping.

The very best minds in our country need to be brought in, to implement economic policy, and they need to be given the full and unequivocal mandate to do what is necessary to succeed.

Political leadership must provide the support needed for implementation, or, simply get out of the way.

Yours sincerely,

Herman Mashaba

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