By Dr Sigqibo Biggz Mfuywa
South Africans went to the polls on May 29, 2024, to vote for their preferred political parties. This was preceded by intense campaigns on all fronts, in which many manifestos were presented to the electorate. This occurred against a backdrop of record unemployment, growing inequality, violent crimes, and high poverty rates.
These, combined with load shedding and a weak economy, must be the seventh administration’s top priorities in order to encourage investment, build the economy, restore confidence and assist South Africa in its transformation.
Instead of producing a clear winner, the results forced political parties to co-operate for the good of the nation, and the results of these engagement is what is referred to as Government of National Unity (GNU).
There have been many murmurs from many places, and it seems that some people are not comfortable with the GNU that includes the DA because they believe that any advances made in transformation, no matter how small, will be undone.
However, addressing the energy and infrastructure issues, as well as bringing down inflation and lowering interest rates, will help to rebuild confidence and maximise South Africa’s economic potential.
Ideally the seventh administration should carry out changes and seek to mend what is wrong. It ought to be clear what this unity is about, the above descriptions are some of the topics that ought to form the basis of any coalition or unity. We should reject and disapprove of any unity that is not based on changing South Africa’s economic architecture.
Thirty years into our democracy, it is inconceivable that the means of production are still controlled by a few and that the agenda for economic transformation cannot be shelved. Such transformation can be achieved amongst other things by an intentional strategy to invest on small and medium-sized enterprises (SMMEs) development, and this would also enhance and achieve social stability by reducing the high unemployment rate through job creation.
SMMEs have been acknowledged as a means of promoting sensible development and economic advancement. Transformation can no longer be about black elite getting shares, or seats in boards of big JSE-listed conglomerates. The economy must be driven by black business and productive sectors.
No country has developed its industrial base without prior infant industry protection. SMMEs play a significant role in the development of the country, although they face numerous obstacles that hinder their expansion more especially for a country whose economy is not transformed. The SMMEs are key components for advancing inclusive growth and development in South Africa.
In view of this, the Bureau for Economic Research (BER) (2016:18) argued that SMMEs contribute more to employment creation than larger enterprises. In addition, the BER (2016:1) notes that SMMEs constitute 95% of all operating businesses and account for 30% of the nation’s gross domestic product.
At the micro level, the creation of jobs will lead to an increase in household expenditure and stable livelihoods by creating opportunities for earnings. However, macro-economic development happens when labour is reallocated to industries with the highest productivity and most potential for growth.
South Africa will achieve high and sustained economic growth rates, alongside improved levels of social development, only if productivity changes are based on widespread economic diversification.
Our association with BRICS and being party to the African Continental Free Trade Agreement, should be a big driver of our industrial strategy given size and type of the markets these come with. This should, however, not be at the sacrifice of our SMME in the manufacturing sector.
Dr Sigqibo Biggz Mfuywa is the Gauteng chairperson of Black Management Forum and writes in his personal capacity.
BUSINESS REPORT