President Ramaphosa has cracked the whip on the private sector in his latest weekly newsletter, admonishing those in business for not transforming quickly enough.

Despite the rhetoric which he repeats at various investor conferences, and general talk about his government’s intention to roll up its sleeves and bring about real economic growth, this latest salvo against the private sector will only serve to undercut the positive things he has said. One presumes he only wants investment and growth if it is of the ‘right’ kind. If not, it does not appear that he is truly serious about changing SA’s downward trajectory.

The president is reinforcing the government’s view of itself, the presumption that it is part of a government’s proper role to dictate to a business what its racial composition ought to be. This is far removed from a government’s proper role; this role, properly understood, is to protect individual rights – nothing more. When governments try to interfere in the economy, as South Africa’s government has done in terms of racial transformation, the systematic breaking down of the concept of merit occurs.

The obsession with transformation, with ticking superficial boxes, is going to result in an ever-shrinking pool of businesses in SA. Apart from the draconian regulations to which they must adapt, chief amongst which is the National Minimum Wage, businesses are now hauled over the coals for not forcing through the government’s artificial, and immoral, edicts.

Enforced diversity is a shallow attempt at addressing the wrongs of the past. In his speech, the president said: ‘Let us move beyond the psychological barrier in the interests of rebuilding this country together.’ The president is unfortunately unaware of the psychological damage these policies will cause. For the government to impose racial quotas and requirements on private businesses presumes that black South Africans are incapable of competing with their white, coloured, and Indian peers, and that the only way they can succeed is if the government ‘helps’ them. Unfortunately it appears that SA has not progressed as much as many had hoped since 1994.

Perhaps the president sees transformation as an easy drum to beat – this is much easier to do than looking at the government’s own many shortcomings and failures.

We shouldn’t underestimate the massive damage which has been done to young black South Africans’ education. Students are dropping out at an alarming rate. Where companies are making the move to all-digital, students are being underserved and come out ill-prepared in terms of being technologically proficient. As of 24 November, 9 618 pupils in Gauteng had still not secured a place in a school (according to Gauteng education MEC Panyaza Lesufi). The atrocious state of public education is the result of the government’s failures, yet it will not own up to the fact that it is under-preparing young people, the overwhelming majority of whom are black, for the corporate world. It is not giving them the skills they need to compete with current businesses and players in the market.

The president’s comments betray his underlying beliefs and philosophy: that success is immoral, that wealth is fixed, and that it is the government’s proper role to interfere in the market and dictate to businesses how they may or may not act. President Ramaphosa’s way of thinking is mired in the past, when wealth was taken by force and not created. The president sees business as inherently a ‘white’ affair which must be shaped by the forceful hand of the state. There is little to zero room for individual agency and achievement in this kind of philosophy.

President Ramaphosa referenced a report in his speech: The Commission for Employment Equity Report 2018- 2019. For as long as we believe people ought to be employed in a particular job because of the colour of their skin, SA will not prosper as the president so fervently desires. Prosperity will only come about if the government drastically reduces the regulations on businesses, especially small and medium enterprises, and truly allows people to create wealth for themselves.

The Report itself shows that the government’s own transformation plan, through the tool of BEE, has been largely unsuccessful. Immoral policies and laws tend to flounder, and people tend to find a way around them. It would be to the government’s credit if it did a bit of serious self-reflection on its own transformation failures.

In imposing its own arbitrary requirements, the government is discouraging true, meaningful diversity; diversity which will arise if people realise they have to work and learn together in a free, competitive market space.

Black-owned South African companies are more numerous now than ever before – they have tried their best to grow, despite the government’s ever-growing list of regulations and taxes. It is an indictment of this government that there could have been an exponentially greater sum of such businesses if only the government had not adopted immoral socialist policies. These policies serve to increase state control over people’s lives and skew the market in favour of entrenched interests, both public and private.

The myriad regulations and socialist policies which have been enforced by successive ANC governments have led to our current state of 0.3% economic growth. President Ramaphosa would be better served in scrapping these policies instead of attacking the private sector, which has carried SA despite the best plans of the state to control each and every aspect of how they operate.

The views of the writer are not necessarily the views of the IRR.

4 COMMENTS

  1. Agree. But the ANC simply doesn’t think like that.

    I know several black businessmen doing business with the government via the ANC process and when asked about the general South African population and what is good for the masses of people, their eyes either glaze over or they simply come up with an in vogue quip like “We didn’t wait for this long to be poor” as if to justify their looting.

    How to change the ANC mindset…

  2. Mr Ramaphosa’s wealth is estimated to be around R650mln so why would he give a damn? I certainly wouldn’t if I had that sort of money. I’d talk whatever claptrap my gullible voters wanted to hear in an attempt to stay in power. After money it is power that is the great motivator.

  3. Dear Cyril,

    When the ANC demonstrates that it can run a spaza shop or (non-Saxonwold) shebeen profitably and without looting from it or killing colleagues to get fingers-in-the till (let alone a SOE or “grabenment” department), you are welcome to dispense advice to those who can.

    Until then, kindly STFU!

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