South Africa’s 3.2% contraction in GDP for the first quarter has come as a shock only to those who have gullibly believed that that President Cyril Ramaphosa is able to fix our economy.
The Capitalist Party of South Africa (ZACP) is clear that the contraction is the inevitable consequence of current and proposed government policy shaped by the ANC — policies similar to those which led to destruction of wealth in once prosperous societies such as Zimbabwe and Venezuela.
Already, spin doctors are at work trying to frame the contraction as a momentary aberration because of load shedding in the first quarter. We expect the inevitable platitudes about the need for Government. Business, and Labour to work together to address the problem. This is nonsense. The widely held prediction that the economy would only contract by 1.7% would have been more accurate if government spending had not increased by 1.3% in the same period. Our government is the problem. It cannot provide the solution.
Meanwhile in its issue dated 23 May, The Economist notes that most of the rich world is enjoying a jobs boom of unprecedented scope. “Not only is work plentiful, but it is also, on average, getting better. Capitalism is improving workers’ lot faster than it has in years…”
If government is serious about fixing the economy, the way forward is clear:
1. Unequivocally abandon the policy of expropriation without compensation (EWC). The motion for expropriation without compensation (EWC) as a constitutional amendment has seen a 13.2% decline in the agricultural sector
2. Unequivocally abandon the Mining Charter which has triggered a 10.8% decline in the mining industry. The anticipation of this amendment being made to the Constitution has undoubtedly led to the diversion of investment, if not outflow.
3. Scrap the National Minimum Wage which has directly led to the loss of 237 000 jobs in 2019
4. Abandon the attempt to intervene in entrepreneurial activities that create wealth — notably the new Tourism Amendment Bill which threatens South Africans who operate AirBnbs with regulations that will destroy their businesses.
5. Abandon racist Affirmative Action policies which have directly led to qualified South Africans abandoning the country of their birth because foreign countries offer them opportunities not available at home.
6. Cut taxes on the middle class who are the single biggest contributor to the fiscus but have seen systematic reduction in real income and living standards post the 2008 financial crisis.
7. Fire the Minister of Trade and Industry and the Minister of Economic Development. They are both avowed communists whose policies have cancelled successful trade agreements, destroyed 83 000 businesses, and killed millions of jobs.
None of these steps will be taken because government is bolstered on two fronts: by business interests who actively collude in their own demise by acquiescing to job-destroying policies, and by media commentators who are afraid to speak truth to power for fear of being branded anti-poor or racist.
To our fellow South Africans who bear the burden of the ANC’s incompetence, our recommendations are that you increase automation in your businesses, go off grid for electricity and water, and invest in home agritech to supply basic foodstuffs. And make use of every legal way to reduce your tax burden. Tax evasion is illegal but tax avoidance is sensible.