The following appeared originally on the africanlightbulbsociety blog.

Author: Taelo Immanuel

Link To Part 1.

In my previous post I established that African politicians generally don’t understand Economics. That’s mainly because their focus is liberation politics which usually seeks to supplant colonial influences and replace them with what is perceived to be essentially African.

They shun capitalistic views because they’re Western in origin. They’re views of the oppressor and colonizer, their adoption is seen as counter-intuitive since Africa’s drive is to decolonize and establish that which is essentially African.

Since there is no established African pre-colonial economic system that can rival Capitalism, equivalents such as Communism and Socialism have always been hot favourites because of their hostility towards Capitalism and their communitarian leanings which are widely accepted to be essentially African.

Instead of embracing Freedom, most African governments become central planners. They assume a paternalistic stance which often leads to corruption, the nationalization of key resources, indigenization efforts (taking from whites and giving to blacks), no protection of private property rights, the setting of a minimum wage, no free press freedom, running the police and military as a private bodyguard service, and the privatization of the State and its resources for the benefit of family and friends.

In an attempt to redeem itself and placate its electorate, this form of government then goes on a ‘job creation’ drive by hiring more policemen, soldiers, teachers, government department employees, and State Owned Enterprise workers, etc. This then leads to a bloated civil service which by and large doesn’t make, create, produce or manufacture anything.

That which they do produce is done at a huge cost because of their huge wage bill which makes their input costs too great to guarantee any sizable profit. Since many of these roles are minimum wage jobs, they pay next to nothing and therefore contribute nothing the to the country’s tax base. This then leads to a contracting GDP and thus a stagnant or shrinking economy. Most African politicians don’t understand any of this.

The EFF’s central planning tendencies embrace policies mentioned above. Like their pro-minimum wage efforts their policies can only contract the South African economy. Those who can’t afford their proposed R4 000 minimum wage will have to let go of their gardeners, cleaners, child-minders, painters, plumbers, etc. This can only lead to more unemployment.

Their expropriation of land without compensation policy will not be the game changer they hope it will be. Confiscating productive land from professional farmers and breaking it into smaller parcels for family farming and occupation is a non-starter. This can only take us back to a pre-industrial agrarian economy where families will live off the land but won’t have enough to sell so as to afford basic goods and services.

Julius Malema, like many other political messiahs before him, doesn’t understand modern economic theory. His policies are misinformed populist views that appear revolutionary but are actually proven failures that are as old as the hills.

ludwick marishane

He needs to discover the effects Freedom and Democracy have on an ailing economy. He needs to discover the laws of supply and demand. If the employer can only afford to pay R1 000 and the employee’s willing to work for that much then that’s what the market dictates. Let the employer and employee settle it amongst themselves.

If the employee’s skill levels demand that he or she be paid more then he or she must be given the Freedom to quit and find employment elsewhere. Stimulate growth through competition where the cream rises to the top. Reward merit and hard work with higher wages and punish laziness and mediocrity with lower wages and unemployment.

Don’t assume everyone to want to be a farmer. Give people the right to choose their own destiny in life. Many have arable land back home but opt to migrate to the city where there’re better opportunities. Afford people this right, let them make their own decisions and live with the consequences. Treat them like adults and not children.

Rather create economic messiahs who will save our economy. Rather stimulate economic growth by giving all enterprises under 5 years and or with revenue less than R3 million a zero tax rate. Make company registration a 5-minute process. Give them free WiFi and internet access. Give them access to printers and copiers free of charge. Foot web design and stationery costs. Invest in their continued education. Set up free mentorship programs and leverage the skills and knowledge of successful entrepreneurs. Listen to business.

By creating the right temperature and atmosphere, businesses will grow. Jobs will be created and the endemic unemployment, inequality and poverty will wane, very quickly. In other words, innovate.

Author: Taelo Immanuel is an entrepreneur, creative consultant, blogger and speaker based in Johannesburg. His blog challenges Africans to think differently about their present reality. He presents Freedom and Innovation as solutions to Africa’s complex problems. You can follow him on his blog www.africanlightbulbsociety.com.

Non-permanent writers and guests can submit their articles to us and we’ll publish them. If a writer proves their writing skill, they may be invited to come on as a permanent writer.