Tuesday, February 05, 2019



Floyd Shivambu 

One of the biggest failures of  the post 1994 Government has been the inability to create jobs, in particular for able, willing and young people. South Africa has more than 22.6 million people who can work, of which 16.4 million are employed and 6.2 million are unemployed. These figures do not include the more than 2 million people who looked for work, could not find work and now they have given up in looking. In expanded definition, which is the real definition, close to nine million South Africans are jobless. All aspects and sectors of the EFF 2019 manifesto have jobs dividend, and this article only focuses on the industrialisation and procurement jobs plan contained in the Manifesto.

Historically and currently, the most effective way to create jobs is to build sustainable industries to produce things that people consume on a daily basis and involve people in all stages of production. South Africas semi-colonial character has positioned the country to be the importer of almost all finished goods, products and services, and exporter of natural, and semi-processed products. The domestic consumption of goods and services therefore create and sustain jobs of many people in China, Vietnam, South Korea, Europe and America. It is not Gods instruction that all cars, electronics and textile used by South Africans should come from the oceans. The massive and almost complete importation of finished goods and products is man-made and the EFF carry the political and ideological will to fundamentally change that. 

The post 1994 Governments industrial policy has failed drastically because the kind of industrialisation pursued was not the kind of inward industrialisation needed to build sustainable Labour absorptive factories for production of daily consumables. This failure was made worse by the fact that the movement of investors money that come to South Africa was less regulated and shaped, as a result a larger component of foreign capital in our country came in as speculative capital, which do not have the much-needed jobs dividend. 

The failure of the ANC led Government can be seen by the fact that in the last 25 years, only five special economic zones i.e. Coega, Richards Bay, East London, Saldanha Bay and Dube Port are functional. The direct state investment in the SEZ for the entire 25 years is around R10 billion, and thats insignificant for a country that expends more than R150 billion on social assistance annually. Just under 14 000 jobs has been created by the SEZs, which if massively expanded, protected and supported could end SAs socio-Economic crisis of joblessness. 

As an interim measure of poverty alleviation, social grants are a progressive intervention, but can not and should not be a permanent solution to South Africas developmental, poverty, and inequality challenges. Social assistance programmes must be accompanied by an equally aggressive Labour absorptive industrialisation, and this is the argument contained in the EFFs Founding Manifesto and clearly located in the 2019 General Elections Manifesto. 

Firstly, to create sustainable jobs, the EFF industrial policy will focus on inward industrialization with export capacity. The policy of inward industrialisation will also aim to depopulate high density populated cities such as Johannesburg, Durban and Cape Town through creation of Labour absorptive industries in parts that have not realized any form of economic development since time immemorial. 

To achieve this, the EFF government will declare zero company taxes in multiple special economic zones in various regions in South Africa, starting with 35 areas and the whole of Northern Cape Province. The multiple special economic zones will gain special economic zones benefits such as tax incentives and factory building allowance. The non-negotiable and legislated basis of each company gaining access the SEZ benefits will be employment of a minimum of 2000 workers per company per investment area. 

As the EFF we studied areas that have immense potential either informed by historical infrastructure, market and resources to identify viable special economic zones. Some of the special economic zones will be declared in Qwaqwa and Thabanchu in the Free State, Butterworth and Mbizana in Eastern Cape, Bushbuck Ridge and Enyibe in Mpumalanga, Shayandima and Groblersdal in Limpopo, Kagisano and Moses Kotane in North West, uMhlabuyalingana and Maphumulo in Kwazulu-Natal, Cape Agulhas and Beaufort West in Western Cape amongst others. 

Any investor who can commit to a minimum of 2 000 sustainable jobs, pay employees a minimum wage and employee benefits will have access to these multiple special economic zones benefits. The EFF government will spend a minimum of R100 billion annually in pursuit of massive inward industrialisation. An emphasis is placed here that the form of inward industrialisation we will pursue will not be the same as the one of many post-colonial societies, which substituted imports with inferior domestic products. The inward industrialisation pursued by the EFF will necessarily have maximum quality controls with export capacity. 

The underpinning belief of the EFF industrialization policy is creation of jobs and any investment must clearly demonstrate commitments to jobs to access special economic zones. These tax free multiple economic zones alone have the potential to generate a minimum of 400 000 by 2024 if each zone can attract in average between five to ten companies who will commit to sustainable 2 000 jobs per investment per area. 

The industrialists in all these sectors should primarily be South Africans whom the State should incubate, guide and finance with an appreciation that not all industries will be immediately profitable. Developmental Finance Institutions must be positioned to finance and support not less than 30 000 initiatives annually, and a 60% success rate in this regard would have created many jobs. 

These industries will not be producing daily consumables only but will leverage on the domestic beneficiation of South Africas natural resources, with a firm legislative framework that ensures that a minimum of 50% of all-natural resources are added value domestically. Massive and decisive industrialisation will in turn develop financial and professional services sector and boost other household industries because many people will have work and in need of other consumables. 

Secondly, the EFF government will decisively use state procurement in all spheres of government including state-owned entities (SOEs) and local government to guide industrialization including in these multiple special economic zones. A conservative estimated is that all spheres of government including SOEs spend above R1 trillion every year in procurement, and this should be the enabler of industrialisation and localization. 

The EFF government will amend the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA) to compel national, provincial and SOEs to procure 80% of all goods, and products from local producers of which 50% should be owned and controlled by women and the youth. Products such as glasses, cups, plates, spoons, tiles, energy efficient building materials, furniture, washing products, electronics, textile products that government use on the daily basis must be produced locally through labor absorptive means. 

The EFF government will leverage the economies of scale to purchase commonly used products such as motors, linen and garments for hospitals, clinics and correctional services facilities, food and other consumables to expand on the value for money to use government budget to have a maximum impact on industrialization and job creation.

At the core of the EFF industrial policy that is underpinned by employment dividends is the call for quality work and living wage. Those South Africans that work but continue to live in poverty because they are paid low wage, many are as good as unemployed. Any industrial policy that intends to create jobs but does not emphasis quality of work and living wage will fail to address South Africa problems of unemployment, inequality and poverty. 

It was for this reason that the EFF in Parliament objected to a R40 national minimum wage across all sectors and strongly called for sectoral determinations. For far too long, the value of wages continues to decline unabated while companies continue to make millions in profits for the shareholders. 

The EFF government will marry closely the need to create jobs through inward industrialization with quality export capacity, maximally use state procurement capacity and fast-track the process of industrialization and at the same time, the quality of work and a living wage will also be a key priority. Added to the comprehensive job creation plan that will come with the abolishment of unnecessary tenders, the EFFs plan on jobs is cogent and a decisive departure from what the post 1994 Government has been doing. The people of South Africa should give the visionary EFF political power and will gain economic power as a result. 

Floyd Shivambu is EFF Deputy President and Parliamentary Chief Whip. 

1 comment:

Unknown said...

Is clear and profound from Chief of Staff. Maybe if we also engage or look into the negatives/impacts the shift of direction will have, clearly because there wont be profit and instant jobs at least the first 3-4 years. My vote is with EFF