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SA’S MACROECONOMIC POLICIES LEAVE MUCH TO BE DESIRED

Brian Mahlangu | 17 July 2023

Failure to transform the economy is equivalent to a betrayal of the collective trust of the masses of the vulnerable black people, says the author.


NOTWITHSTANDING the projected economic growth and job creation of the National Development Plan, South Africa’s macroeconomic policies leave much to be desired.

The current blend of radical socio-economic transformation policies and plans, with some glaring weaknesses, may not deliver expected fundamental changes in the economic ideology, economic system, economic structure and economic institutions that are needed for sustainable growth and job creation.


In the name of radical socio-economic transformation, the nature of the ideological superstructure and economic sub-structure in South Africa is likely to remain intact, thus the radical socio-economic transformation may not result in policy outcomes of inclusive economic growth and job creation to counter ever increasing high unemployment.


Inclusive economic growth implies decentralised and de-concentrated economic growth spatially, where poor people live, work, participate in the generation of economic activities and in poor communities where the means of production are used in the production of goods and services for the development of poor people in their areas.


It should be redistributive of national resources and income equitably to all the citizens, as a human right imperative; instead of excluding large section of citizens of opportunities for the fulfilment of their human right of having meaningful standards of living.

Where poor people are permanently excluded from the mainstream economy, the state must devise means to ensure that all citizens enjoy the fruits of inclusive economic growth.

These quagmires of substantive transformation are also witnessed where blacks are in top management and leadership positions in private and public institutions. Acceptably now, there is no sincere commitment to fundamental economic transformation among other leaders who were mandated to accelerate transformation.


The core responsibility of substantive transformation is largely placed in African leadership for its success; rather than by conservative white leadership that historically was the greatest beneficiaries of racial discriminatory apartheid government with the privileges of the past racist political order that ordained that Africans be subjected to largely permanent economic deprivation.

It appears the decisive leadership in private and public sectors to expedite transformation is in chronic short supply and our economy is in an unenviably unfavourable state after 30 years of democracy and freedom, due to economic policy choices and decisions the leadership made and continues to make.

These economic policy choices are dragging the whole economy down, hence, a failure to yield fundamental socio-economic changes, betraying the legitimate expectations of poor citizens.


Historically the deprived black majority is supposedly the primary target groups of the socio-economic transformation outcomes. However, the benefits of institutional economic transformation bypass them to be monopolised by the few capitalist elites for their own individual private interest.

It is highly likely that the transformation model adopted by South Africa will not be able deliver on the expectations of the poor, except for making misleading rhetoric promises and pronouncements.

In some quarters socio-economic transformation is misconstrued as an antithesis of progressive efforts and strategies to paddle forward responsive policy intentions to realise inclusive economic growth.


Pseudo radical socio-economic transformation without economic substance created manipulative small black elites, who always pretend to be the genuine representatives of the downtrodden poor black majority, while it indulges in self -enrichment.

This artificially created black elite is unable to influence white capital control of the economy. Some of these black elites were elevated by entrepreneurship and ‘tenderpreneurship’ deals to become instant millionaires and billionaires who largely share the same interests and resources with white elites.

They have lost credibility and the respect of the people and can no longer claim to have legitimate connections with the black majority; hence they cannot provide credible leadership in black communities now.


If social economic transformation remains an unsuccessful experiment, there is a potential for social instability, public disillusion and popular discontent among citizens. South Africa cannot completely transform without de-racialisation of the economy to be inclusive in ownership, management and control of the commanding heights of our economy.

This may lead to the untangling of the economic ownership monopoly by the few rich elites and expedite required equitable economic redistribution and de-concentration of ownership, management and control of the means of economic production from the monopolistic few rich white males who are said to occupy approximately 65% of management and control in the private sector, especially at the tertiary sector of the economy.


There is oversensitivity to the myth that says economic transformation is the antithesis of economic growth. An untransformed South African economy will not be able to absorb battalions of unemployed young black people for a long time.

It is a reckless error of the leadership to squarely entrust the responsibility of socio-economic transformation generally in the hands of few white leaders who have never demonstrated an interest to accelerate it without resistance by parading excuses to preserve their privileges and monopoly of economic resources ownership.

If the black leadership allows the prolongation of transformation failures, poverty, unemployment and inequality will remain permanent features in our country. Honest leadership should provide credible accountability for the mammoth failure of socio-economic transformation of deserving citizens.


The responsibility of the leaders is that they must be capable and trustworthy for leadership roles in the interest of the poor black majority. If the leadership cannot use political power, influence and constitutional authority to the advantage of the poor people, they must give way to capable and competent ones to deliver socio-economic transformation to end the over-prolonged scourge of deprivation among the black majority.

Genuine radical socio-economic transformation must change the social order and economic structural arrangement with the focus on the fundamental change of the economic system, structures, policies, laws and socio-economic power relations among its citizens.

Currently both the social order and economic order are inherently exclusive and marginalising; thus, the economy displays multiple features of the inequities and inequalities of an unparalleled scale. Genuine radical socio-economic transformation should imply fundamental changes of the highest order – the superstructure and substructure level – in the economy.


Radical socio-economic transformation is about mainstreaming, empowerment and participation of the poor people in crucial management areas of economic affairs for the country to become substantively united, democratic, non-racial and non-sexiest, human right-sensitive and social cohesion in line with constitutional imperatives.

Radical socio-economic transformation is also a matter of political economy and power relations. Those with economic power should be prepared to relinquish and decentralise some of it for the powerless ones to exercise power of economic decision-making in their respective yet critical area of governance.

Failure to transform the economy is equivalent to a betrayal of the collective trust of the masses of the vulnerable black people, while the success of transformation will partly facilitate public participation in the economic policy decision-making process.


‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.



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