Zuma and allies are a disaster for economy

By Beverly Schafer, MPP:

South Africa is suffering under an economic policy paralysis while the government slowly but surely suffocates the private sector. This is leading to massive jobshedding and unemployment.

The paralysis stems from an increasing laager mentality where South Africa is isolating itself from the rest of the world and international trade relations, with a clear message that we are not open for business. ANC secretary-general Gwede Mantashe’s recent comments that “we won’t be dictated to by the US over the private security bill”, is once again a clear sign of the ANC’s paranoia.

Completely blind to what is happening to our economy, the national government consistently introduces policy and releases media statements that negatively affect foreign direct investment, exporters and our tourism industry


The ANC ignores the realities and in one of their policy documents they state that “the world is literally bending over backwards to make us a success story”. Nothing could be further from the truth.

Mantashe’s battle with the US is totally short-sighted. The Private Security Industry Regulation Bill forces foreign-owned security companies to sell 51 percent of their shares to local shareholders.

Despite the legislation being in breach of the current World Trade Organisation General Agreement on Trade in Services, it risks our much-needed non-reciprocal trade agreement – the Africa Growth and Opportunity Act, which gives South Africa preferential access to about 7 000 product tariff lines.

The Expropriation Bill, the Protection of Investment Bill, the Land Act Amendment Bill and the Mineral and Petroleum Resources Act all contain sections that will require foreign-owned companies to shed some part of their shareholding to South African-owned groups or the government. The reasons behind South Africa’s economic policy paralysis is entirely understandable if you consider the contradicting policy documents of the governing party.

On the one hand they steamroll legislation through, without doing the necessary regulatory impact assessments creating confusion and uncertainty in the marketplace. Yet, on the other hand, the ANC says it wants a trade policy which aims to raise the level of productivity and improve the international competitiveness of South Africa’s economy as a whole.

We consistently see various pieces of legislation that speak to the blatant disregard for economic growth, or perhaps it is more of an obsession on the part of the national ministers, with a crippling command-approach to the economy The new visa regulations are the most obvious case in point.

While much attention has been placed on the tourism sector, which for the first time in decades saw a decline in tourist numbers to South Africa, very little has been said about the impact of these regulations on the business sector.

For example, intra-company visas no longer allow regional chief executives of multinational firms to have their contracts renewed or extended beyond four years.

We see middle managers from multi-national companies travelling between offices equally being affected and unable to get the necessary visas required to work here. South Africa lacks middle managers in general across sectors and the transference of skilled managers from abroad is necessary and needed.

The over-confidence, bordering on arrogance, by the ANC is quite startling bearing in mind that South Africa’s growth is at a snail’s pace of well under 2 percent.

With unemployment at its highest since 2003, together with the added challenges of power shortages, a looming drought, labour unrest and an increase in crime and public violence, surely by now we should be seeing panic stations erupting out of the ANC leadership to secure the much-needed jobs and stimulate economic growth particularly leading up to the municipal elections?


South Africa must change its economic policy direction towards an enabling environment if we are to ever come out of the current “mess” we find ourselves in.

President (Jacob) Zuma must realise legislation sets the course for South Africa’s trajectory – either inhibiting or enabling the country to move forward.

South Africa should be taking advice from across the pacific with the recent Trans-Pacific Partnership agreement between the US and east Asian countries making it one of the most enticing free trade agreements that has ever existed.

The government needs to decide whether it wants economic growth, increased employment and a growing tax income to pay for social upliftment.

The Zuma administration, together with its partners in Cosatu and the SA Communist Party, have been a disaster for this economy on all levels and the sooner the coalition disappears, the better.

Beverley Schafer is the DA’s Western Cape provincial spokesperson on economic opportunities, tourism and agriculture. A number of bills contain sections that will require foreign-owned companies to shed some part of their shareholding to SA-ovvned groups or the government.