It is difficult to escape the sceptism attached to the President’s recent announcement of an R50bn stimulus package for the economy. This stems from the imminent general election, which he has just announced during his trip to the United Nations, will be held before May next year, and the need for the ruling party to provide some ‘sweetener’ to a highly demoralised and economically battered electorate.
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The reality is that without some form of meaningful intervention, the downward trajectory our economy was headed for terminal velocity.
While accepting that some of the economic pressures we are experiencing is due to external factors such as a rocketing crude oil price and strong dollar, the President must rue not taking stronger action as the fiscus was plundered, essentially leaving the Treasury cupboard bare.
This is evidenced by the fact that he could only garner the R50bn by reallocating existing budget allocations, and similarly, the vaunted R400bn Infrastructure Fund is being created by centralising the spend of all government departments under one structure, and encouraging the private sector to come on board as partners.
The reality is that for all the sweet words and soundbites, corporate SA is not going to climb in wholeheartedly until severe concerns have been addressed. These include:
- Certainty over the land issue and its resolution
- Meaningful action being seen to start controlling rampant corruption at all levels of government
- Improved governance and financial management at SOE’s
In the meantime, there is much the President can do address the pressures business and the economy finds itself under, that does not require additional funding.
Firstly, ensuring that all businesses transacting with the government are paid within 30 days or less. This will ensure more liquidity circulating in the economy and build sustainability in the SMME sector.Secondly, he will must ensure that all goods identified on the ‘designated lists’ i.e. goods that have been identified as available from SA manufacturers are procured from them.
Too much of government procurement is bypassing this provision that has the potential to transform the sector, either wilfully for corrupt means or by lack of knowledge.Thirdly, there is still tremendous ‘fat’ in government operations. Can we really justify spending more than R2bn on ‘Executive Protection and Security’ for government officials?
The President will show his true mettle by his willingness to confront these holy cows of privilege and perks attached to the bloated Executive arm. Window dressing will no longer cut it.
We find ourselves on an economic precipice, and only concerted action by all stakeholders is going to bring us back from the edge.
After matriculating, Vijay Naidoo studied Economics in the UK. Upon his return, hejoined the family construction business as MD for 10 years.
He subsequently joined his sister in their furniture manufacturing business as director for quality assurance and operations. He was responsible for all quality aspects of their products, and led the project to the business achieving an ISO 9000 quality accreditation. As an export focused business, this was important for our international competitiveness.
Mr Naidoo has an abiding interest in quality management and productivity improvement, particularly in manufacturing.
More recently, he has focused a lot of his time on giving back to the community by way of mentorship of small businesses and sitting on the executive of the South Coast Chamber of Commerce. He also sits on the Board of the Ugu South Coast Development Agency.
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