WILLIAM GUMEDE: How the government has lost more jobs than it made

ANC and government actions have destroyed more jobs, investment opportunities and growth in the past decade than they have created.

For every job created, it is very likely that at least three were destroyed solely by ANC and government actions, decisions and incompetence.

Creating new overarching economic policies without stopping job-destroying actions will therefore deliver little growth. The economy will continue to lose jobs, no matter the new economic policy, unless government and ANC decisions, actions and management practices become more rational, efficient and honest.

This is not to say that new economic policies are unnecessary. But new ANC and government strategies often try to tackle seemingly politically “easier” side issues, rather than address the elephants in the room that cause job losses, investment strikes and low growth. The best such policies can do is tinker at the margins of the economy.

The number one destroyer of jobs, investment and growth is out-of-control corruption. Any new economic policy must therefore include strategies to tackle corruption in such a way that the public, markets and investors are convinced.

Corruption, mismanagement and incompetence not only plunged the SABC into bankruptcy and caused it to run out of funds to flight local soccer, they also destroyed the creative industry economy linked to the public broadcaster.

Corruption, mismanagement and ideological opposition to restructuring Eskom have led to factory closures, investment flight and the collapse of many industries.

Therefore, economic policy must genuinely restructure state-owned enterprises (SOEs), finally appointing people from outside the ANC cadre circle and getting rid of SOEs where services are already more cheaply provided by the private sector.

Incompetent public services and SOEs staffed in crucial areas by incapable cadres have undermined development. An economic strategy must therefore include an approach that ensures competent appointments to the public sector, no matter the factional, political or colour considerations.

Non-payment by the government of service providers, because of inefficiencies, has led to the closure of factories and mines and has deterred investment.

Restoring the rule of law, combating violence and crime and making the police and prosecuting authorities more effective are crucial elements of economic policy.

The capture of BEE has caused the deindustrialisation of many economic sectors, leading to the collapse of companies and the destruction of viable industries and jobs.

A case in point is corrupt BEE players, acting as front men and women, importing products from abroad, undermining local content rules and destroying local companies.

A new economic policy must either abolish BEE in its current form or fundamentally overhaul it.

Incoherent and populist policy statements by ANC leaders have chased away investment

Supporting dictators in Africa, because of so-called African solidarity, pan-Africanism and historical allegiances, indirectly supports these regimes in destroying their countries’ economies, forcing their people to flee to SA and putting pressure on the SA economy.

Similarly, blindly partnering with China without defending our industries means cheap products flood the SA economy, destroying local industry.

Incoherent and populist policy statements by ANC leaders have chased away jobs, investment and skills. An overly ideological approach to establishing National Health Insurance (NHI) will cause capital and skills flight.

An economic policy must encourage local entrepreneurs, prevent financial and human capital flight, champion those already creating jobs and prevent closures of local companies.

The SA economy is on the verge of crashing, because of corruption, mismanagement and the manipulation of policies for self-interest.

This is no time for grand experimenting. We desperately need to get the basics right, make ideological compromises and include talent from outside the ANC inner circle.

• Gumede is an associate professor in the School of Governance at Wits University, and author of South Africa in Brics (Tafelberg)

This articles was first published by the Sunday Times