Newly appointed finance minister Malusi Gigaba has radical economic transformation at the top of his agenda.
“We need to radically transform the South African economy, such that it works for all South Africans, including those who have been and still continue to this day to be marginalized – the working people and the poor, black people in general, women and youth,” minister Gigaba said on Saturday.
Addressing the media in Pretoria, minister Gigaba said radical economic transformation is not about implementing the tender system more and faster but it is about changing the structure of the economy to bring on board as many players as possible, who can take advantage of the country’s natural resources, infrastructure investment programmes and agriculture sector, as well as other advantages that the country’s economy has to offer.
“Utilising that, we must be able to create industrial capabilities to localise the South African economy to develop new supplier sectors, to ensure that we use government’s vast procurement budget of about R500 billion to empower black people,” said minister Gigaba.
He said the issue of radical economic transformation arises from a criticism that for a long time the structure of the South Africa economy has not been changed.
“We have not paid sufficient attention to the real economy, to industrialising the economy, to ensuring that we create entrepreneurs and industrialists particularly among black people in a manner that is going to expand our skills base, expand the ownership of property and wealth and expand South Africa’s productive capacity.
“The urgent task before us is the pursuit of inclusive growth and a shared wealth,” Gigaba said.
He said the National Treasury is a key enabling institution for progressive change.
According to the minister, for too long there has been a narrative or perception around Treasury, that it belongs primarily and exclusively to ‘orthodox’ economists, big business, powerful interests and international investors.
“Treasury, like all the institutions of our democratic state, belongs to the people of South Africa, black and white, rich and poor, young and old, male and female, urban and rural. Its policies, its management, its communication, must be accessible to all South Africans,” minister Gigaba said.
Finance minister’s priorities
National Treasury will accelerate the implementation of the President’s Nine-point plan for economic growth and job creation.
“I will work with Parliament to approve the 2017 MTEF and ensure its effective and efficient execution, including achieving the fiscal objectives that our Cabinet had approved in January.
“This includes ensuring that our country maintains the broad course of fiscal prudence it needs to be able to sustain its critical pro poor social programmes,” Gigaba said.
The minister will also work with his colleagues in government to reinforce the alignment of the budget to the country’s development objectives as set out in the National Development Plan and other policy documents.
Work with business, labour to continue
In addition, the minister will continue the work with business and labour to ensure that South Africa achieves faster and more inclusive growth so that the country creates more work and business opportunities for people.
“We will use state procurement strategically and vigorously, to ensure localization, promotion of black-owned, women-owned, youth-owned enterprises and SMMEs, and to facilitate industrialisation.
“Equally, preferential procurement must be used to grow genuine productive capacity, not rent seeking,” minister Gigaba said.
Furthermore, the minister will work with the Central Bank to take steps to strengthen and transform the financial sector so that it serves all South Africans.
“We will work closely with provinces to strengthen financial management not as an end in itself, but as a means to deliver more and better quality services to our people,” he said.
National Treasury is committed to maintaining an investment grade credit rating for South Africa, by all credible ratings agencies globally.
“This is important for ensuring South Africa’s access to investment capital at the fair and manageable interest rates, to borrow for productive investments to improve our economic competitiveness,” the minister said.