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Stand Aside, Let Mboweni Do His Job

These past few weeks I have had the pleasure of visiting the premises of a few firms in Gauteng, and some in the Eastern Cape and in Mpumalanga, to see what really is happening on the shop floor.

Entrepreneurs out there are enthusiastic and see opportunities in the midst of all the noise and toxic environment fostered by the clueless politicians in charge of the government.

At Mkhondo, the town previously known as Piet Retief, in late August I met a community of poor people who live on land rich in coal.

With nothing, they have woken up and started companies that are making a serious effort to partner the companies that have been mining their land for more than 50 years. They are not begging for handouts.

National Treasury’s latest economic blueprint, ‘Economic Transformation, Inclusive Growth, and Competitiveness: Towards an Economic Strategy for South Africa’, is for people such as these.

If implemented, finance minister Tito Mboweni’s plans are exactly what SA has been missing for the past 10 years. Of course, to unleash growth, we could do a lot more than the plans envisaged in the document.

South Africa is one of the toughest places in which to do business, and that can be seen in the huge unemployment numbers published quarterly by Statistics South Africa. To bring to those sad statistics a human face, one needs only to visit our townships, suburbs and towns to see the sheer scale of unemployment.

Large numbers of people have given up all hope of finding a job or earning an honest income. They have given up the hope of restoring their dignity. This we cannot afford.

As such, South Africa must do everything possible to embrace entrepreneurship. For South Africa to prosper and deal with unemployment and poverty, we must embrace profit, particularly from private sector companies and the many small businesses choked by unnecessary red tape.

It is only from the profits earned by the men and women who risk private capital to produce goods and deliver sorely needed services that the tax income on which the system runs is derived. It is also from these profits of private industry that South Africa is able to meet the social security payments to the indigent. Yet private capital has endured not only the tough business environment, but also daily insults by the very politicians who depend on lofty promises to their constituencies.

It was not surprising to see the very people who most need the jobs that Mboweni is trying to help create insult him and insist he withdraws Treasury’s economic blueprint. Cosatu and its union allies stand to benefit the most, in the long term, should Mboweni’s plans be implemented.

The additional jobs that would be created, through liberalisation of the key sectors of industry, would immediately benefit trade unions through membership subscriptions. Those subscriptions from an expanded membership base will go straight to the unions. It is a no-brainer.

Instead of berating Mboweni for doing his job, the unions should be embracing him and giving him the support he needs to succeed. Yet they are obsessed with the need to protect the few jobs that remain in the companies owned by the state.

The blueprint goes further than most in its pursuit of growth when it calls for Eskom to sell some of its coal-fired power stations, particularly those nearing the end of their design life. The unions should embrace this, instead of rejecting it out of hand.

When a power station, such as the Camden power station, has reached the end of its design life, the approximately 300 people who work there would be rendered jobless, particularly by an Eskom that employs 33% more people than it needs.

The unions should see this for the opportunity it really is: to give private investors the option of extending the life of the station and the jobs for their members.

The public auctions of state property in this example would help to not only bring in much-needed billions of rand to the public coffers, but also to provide transparency and real competition in the cost of buying coal for SA power generation.

Electricity prices have been increasing by an average of 18% for the past 10 years, says the document. This is clearly both unsustainable and unaffordable.

The real cost is paid by the consumers of electricity and of the end products coming from the factories. Union members are not exempt from paying these exorbitant fees for their electricity.

In Edenvale, east of Johannesburg, a small engineering firm I visited has just invested more than R1-million to install solar panels on its roof, not only to reduce its reliance on the expensive Eskom electricity, but also to sell its own power back to the national grid should it be permitted to do so.

Many households are also resorting to generating their own power. The unions can do nothing about the loss of that revenue to Eskom.

As renewable technologies become ever cheaper, more and more households and business will increasingly go the rooftop generation route.

Electricity generation is just one of the many examples where the technology train will not wait for trade unions stuck in the long-gone Soviet era.

So, instead of blocking the finance minister from attempting to unleash the full potential of the economy through embracing entrepreneurs and profit, we should be giving him our support.

After all, the long-promised better life for all can only be realised when the people have access to affordable and reliable electricity, and reliable and affordable transportation.

A better life for all can only be realised when private companies make profits and pay tax on them.

Everything else, including the dreams that the state can better deliver, will remain pie in the sky. Haven’t we been trying for 25 years in the democratic South Africa context?

Let a thousand new ideas flourish! 

OPINION: Sikonathi Mantshantsha