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USB’s Prof Daniel Malan to combat corruption on WEF council

USB’s Prof Daniel Malan to combat corruption on WEF council

USB News

USB’s Prof Daniel Malan to combat corruption on WEF council

USB’s Prof Daniel Malan to combat corruption on WEF council

  • Aug 13
  • Tags WEF council, Centre for Corporate Governance in Africa

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Prof Daniel Malan, director of the Centre for Corporate Governance in Africa at the University of Stellenbosch Business School (USB), has been invited by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), to become a member of the WEF’s Global Future Council on Transparency and Anti-corruption for the 2019 – 2020 term.

As a council member, Prof Malan will work with other leading experts to develop new insights and innovative ideas to inform decision-makers around the world. He is also a member of the advisory committee of the Future of Trust and Integrity, a project of the Forum’s Partnership Against Corruption Initiative.

According to its website, the Network of Global Future Councils provides its members with a platform for multi-stakeholder collaboration that enables them to identify creative ways their council can contribute to solving shared challenges.

It is a well-known fact that corruption is stifling Africa’s growth. A recent article on corruption and how it is hindering the continent’s economy, states that one in four Africans had to pay a bribe to access public services last year.  Prof Malan says corruption is a global problem, but Africa faces specific challenges.

“Sub-Saharan Africa is the lowest-scoring region in the 2018 Transparency International Corruption Perceptions Index with an average score of 32 out of 100. In terms of the 2019 Global Corruption Barometer – Africa, also published by Transparency International, it is revealed that most people feel that corruption has increased in their country, but they also feel optimistic that they can make a difference in the fight against corruption,” he says.

“There will never be an easy solution, but more effective enforcement combined with innovative technology and efforts to encourage ethical behaviour can make a difference.”

“The fact that one in four respondents stated that they had to pay a bribe during the last year to access a public service is an indictment against African government officials, but corruption is also a huge problem in the private sector. There will never be an easy solution, but more effective enforcement combined with innovative technology and efforts to encourage ethical behaviour can make a difference.”

According to Prof Malan the Global Future Council on Transparency and Anti-Corruption will develop recommendations and integrate their findings into WEF activities such as the Annual Meeting in Davos-Klosters and regional and industry events, as well as global decision-making processes.

“Business schools have an important to role to play in the fight against corruption.”

He says business schools have an important role to play in the fight against corruption. “Schools must ensure that their own behaviour is always beyond reproach, and academic courses and executive development programmes should aim to build capacity amongst future and existing managers to lead by example,” he says.

USB is a participant in the anti-corruption working group of the United Nations Principles for Responsible Management Education. Prof Malan also played the role of lead consultant in the recent development of university ethics and integrity modules of Education for Justice, a project of the United Nations Office of Drugs and Crime.

*Reference: https://www.weforum.org/communities/global-future-councils

More about the Global Future Councils*
– The Network of Global Future Councils is the world’s foremost interdisciplinary knowledge network dedicated to promoting innovation thinking on the future.
– Two co-chairs lead each of the 41 councils comprised of 20 -25 leading experts from academia, government, international organisations, business and civil society.
– The network gives its members a platform to support the Forum’s vision to better understand and shape global systems in the face of rapid social and technological transformation.
– The council term will run from October 2019 – September 2020.
– The council meets at the Annual Meeting of the Global Future Councils in Dubai, United Emirates in November 2019 and delivers its outcomes as part of the Forum’s ongoing initiatives and meetings.

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Thinking on a future funding system: NHI

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Thinking on a future funding system: NHI

  • Aug 12
  • Tags National Health Insurance, South Africa, Opinion

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It’s important to note that the National Health Insurance (NHI) is a funding system.  Not a delivery system. The NHI is most probably one of the most misunderstood term in health care In South Africa. Its real meaning is sometimes augmented and most frequently diminished to represent something that it should not be or will not be.  The concept seems to be a good political tool and is sold to the voter as the solution to our health care problems.

It is not a strategy or a health structure. Far from that. The NHI is actually only a funding system where money for health care is centrally managed – not the process or quality of care.

Universal health care means that people have universal access to health care. Ideally, the quality of such health care should be good enough to improve the health status of the community and of the individual when needed. A good universal health care model will therefore define the areas of health concern for communities and individuals. It will plan for and service those needs through good planning of high quality services that include health system reviews, adequate staffing and leadership and effective management, understandable care processes, accessible efficient facilities, health data acquisition and proper budgeting and budget control.

But people, not governments, pay for healthcare. Present South African healthcare is funded by individuals (for themselves) and by the taxpayer (read: mainly the same individuals that fund their private health insurance) for the public sector.  The funding per individual in the two sectors (private and public) is therefore highly unequal, mainly due to the small taxpaying base that South Africa has.  If quantified, a private sector health care medical scheme member will pay for his/her and his/her family’s private health insurance according to what they can afford in benefits. These taxpayers will, collectively also pay about 60% of the care in the public sector through taxes.

The NHI is one way to fund universal health coverage.  It uses (mainly) tax money to fund health care for all and the taxpayer is therefore mainly responsible for footing the bill. It also, in the SA guise, may reduce the ability of the individual to continue to pay for e.g. no- NHI benefits in a medical scheme. This may be unappetizing for certain taxpayers and voters.

The quality of care in the two sectors (public and private) are also (with some very infrequent exceptions) very different. Where it costs more, the service is normally better but not yet optimal for the money spent.  Although more expensive than the private sector, the care in the private sector is mostly, but not always, comparable to services in some first world countries. In these countries the per capita expenditure in real money on health (not percentages of Gross Domestic Product as is frequently used) is 6 (UK) to 9 to 10 times (USA) what it is in the South Africa Private sector.

Market inefficiencies, market enquiries and other reports have shown this.  These cracks are not very large or unsurmountable to rectify, in the private sector.  Even if the fault-lines are fully fixed and amount to ZAR10 – 15Bn savings, this will not be enough, if efficiently funneled in some way or another to prop up a failing public sector. There is much less money per capita in the public sector. Management of money can improve patient benefit. Compared to the private sector, the quality of care in the public sector is frequently low and is fraught with solvable problems: bad access or when accessed, frequently suboptimal care, overcrowding and more than occasionally, a non-caring attitude from health professionals that are closest to the patient. There are reports of drug outages, non-availability of existing theatre and other treating facilities due to lack of qualified staff to man open workspaces and other problems that may elevate this to a potential perfect storm that will threaten health care on the ground.

When we fund, we must know what we are paying for and how much we need to deliver those services.

The NHI as funding system can only work if there are predefined health care benefits covered under this system. These must be carefully defined and quantified. This calls for gap analysis on facility and personnel needs and concerted efforts to improve these.  It calls for a list of carefully planned, NHI funded health care benefits that will be universally available.

This will lead to a clear idea of the quantum of funds needed and how funds will be spent if procured.  It will also afford South Africa well-grounded motivation to secure funds and to speed up funding for a good health system overseas.  Investors in countries’ well-being want to know what they are funding.

So where to with the possibilities of NHI? How can it work?

A pragmatic approach to implementation of a funding system such as NHI is needed. It is not adequate to say that it is a political decision and that if we implement it, we will start to plan the nuts and bolts of who and what will be funded.  The NHI will not solve the other problems that make health care in South Africa a very challenging space.  It will not solve for infrastructure, scarce leadership and management, the attitudes of health professionals, how it will service ill people and look after the health of those that are healthy.

Deeper, pragmatic modelling of care systems on the ground, concerted implementation of such good planning, infrastructure, care system logistics, supply of consumables to meet demand and prevent outages, staffing and good leadership and management skills (including financial planning and management skills) are needed. We need to use the time that we have available, very efficiently.

Can universal health coverage funded by and NII mechanism improve health for South Africans? Yes – if we do the right things right! If the above is quantified and properly implemented well-rounded planned universal health coverage, funded by adequate amounts of money with services delivered by good facilities with motivated staff, may be possible.

PROF MANIE DE KLERK IS THE HEAD OF THE UNIVERSITY OF STELLENBSOCH BUSINESS SCHOOL’S MBA IN HEALTHCARE LEADERSHIP.

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Elections

Elections 2019 and the impact on SA’s economy

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Elections 2019 and the impact on SA’s economy

Elections

  • Prof André Roux
  • MAY06 2019
  • Tags Elections, Economy, South Africa, Prof André Roux

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Assume that the ANC wins the national election by a comfortable margin (gaining, say, 60% of the national vote). Assume then that President Ramaphosa remains at the helm of the party and the country for the next 10 years, and that he slowly but surely instills a spirit of constitutionalism (as opposed to populism).

Can we now assume that economic growth will climb to 5% within the next year or two; that millions of new jobs will be created; that the “lights will stay on”; that most forms of crime will be of a petty nature; and that decent health care will be available and accessible to all? Of course not. With the best will in the world, one person (President Ramaphosa) cannot undo a decade of mismanagement and the warped allocation of scarce financial and human resources. Moreover, the predicament in which South African society in general, and the economy in particular finds itself can be attributed to a combination of external forces and internal, self-inflicted weaknesses.

Regarding external forces, the desired economic growth path of 6% per annum for a period of at least 20 years has to be achieved in a global economic environment that is less friendly and more volatile than 10 years ago. Indications are that world growth, especially in Europe, will remain sluggish for the foreseeable future, while trade tensions and the more robust oil price increase the risks for further contraction.

In some ways SA has “painted itself into a corner” with regard to its socio-economic lethargy.

For instance, the country, and its stakeholders, are living beyond their means in the following ways:

  • Domestic expenditure exceeds domestic production.
  • Government spending exceeds government revenue.
  • Exports exceed imports.
  • Household expenditure exceed household income.
  • Investment demand exceeds savings supply.

The loss of fiscal discipline since 2008 is of particular concern. In the period between 1995 and 2008, a large measure of progress was recorded with regard to the country’s fiscal situation: government spending growth stabilised; government spending was re-prioritised; the country’s tax collection effort became increasingly efficient; the budget deficit was been narrowed (relative to GDP) to acceptable levels; and the public debt ratio was reduced. These improvements enabled the government to embark upon a programme of fiscal expansion to counteract recessionary conditions. However, the large rise in government debt since 2008 (currently approaching 60% of GDP), together with other fiscal developments, has attracted the attention of inter alia the well-known credit ratings agencies. The deterioration in South Africa’s fiscal prospects is largely due to government expenditure decisions over the last 10 years that are unrelated to the financial crisis. Of particular concern is the fact that about 30% of the rise in the spending-to-GDP ratio can be attributed to government wages; 15% to goods and services; and 11% to transfers. This is in addition to repeated rescue packages for inefficient state-owned enterprises. Moreover, the contraction in economic activity (and therefore the tax base of the economy), together with the political inexpedience of lowering government spending, is more than likely to result in relatively high budget deficits in the next few years, with a concomitant rise in the government debt to GDP ratio. Meanwhile, the budget will come under increasing pressure as a result of a rising debt servicing burden.

South African consumers are also living beyond their means. Household consumption expenditure on goods and services has exceeded household disposable income for more than a decade. As a consequence, the household debt-to-disposable income ratio has averaged just below 80% since 2006, compared to a long-term average of between 50% and 60% in the previous few decades (SARB, historical series). In addition, the ratio of household savings to disposable income has been negative for most of the period since since 2006; in 1992 it was as high as 6.1% (SARB, historical series).

The overarching and cross-cutting implication of the growing indebtedness of ‘SA (Pty) Ltd’ is that the country lives in perpetual hope that its various deficits will be financed by non-residents, at an affordable cost. Until about five years ago this outcome was generally achieved, as foreign savers found the country to be sufficiently attractive to warrant a meaningful investment in shares, bonds, plant, equipment and other forms of direct investment. But this might have been not so much a vote of confidence in South Africa, but rather a motion of no confidence in the short-term economic outlook then prevailing in the USA, Western Europe, and Japan. Today, investors are probably finding it more difficult to formulate good reasons for financing South Africa’s fiscal, household, foreign and savings deficits. On reflection, therefore, South Africa’s relatively robust economic growth performance during the first few years of the 2000s was largely driven by consumer and investment spending, which, in turn, was accommodated by rapidly expanding debt levels. The latter are not sustainable; in fact, as both the household and government sectors attempt to restore the integrity of their balance sheets, growth in these sectors is being curbed.

When all is said and done productivity is a prerequisite for international competitiveness and economic growth and development. Labour productivity is the most common measure of productivity, largely because labour costs constitute the largest share in the value of most products (in South Africa wages and salaries represent more than 50% of the cost of producing GDP). Capital productivity measures the output per unit of capital employed (fixed capital, inventions and land resources). Total factor productivity (TFP) measures the efficiency of all inputs to a production process; i.e., it not only labour or capital. Its level is therefore determined by how efficiently and intensely inputs are utilized in production. It plays a critical role in explaining economic fluctuations, economic growth and cross-country differences in per capita income. Factors contributing to TFP growth include innovation, the availability of skilled labour, the cost of conducting R&D, the availability of technology (and the efficiency with which technology is used), and the availability and ability of management to harmoniously and efficiently blend the available inputs.

The productivity of labour in South Africa has, at best, stagnated over the last 10 years, while remuneration growth has increased by more than 6% per annum. As a result the unit costs of labour have escalated to be almost three times higher today than at the beginning of the 21st century. All of this has occurred during a period of near-recessionary conditions and chronically high unemployment.

South Africa’s TFP performance over the last three decades has been disappointing when considered according to its own historical development, as well as when compared with other countries of a similar nature. There were 15 annual declines in the country’s TFP between 1990 and 2014. Consequently, the level of TFP in 2014 was 22.6% lower than in 1989 (computed from The Conference Board Total Economy Database; Adjasi, 2015).

The reasons for South Africa’s sluggish TFP performance can be attributed to, inter alia, low efficiencies in the use of labour and capital; a variety of challenges (including regulatory and financial barriers) that prevent businesses from maximizing their potential; and a low competitive base.

A key question, therefore, is whether we will we manage to generate sufficient appropriate skills to match the demands of employers? The OECD stated recently that the biggest challenge in South Africa is the unequal quality of school education, its low average level and the high drop-out rates.

Institutions matter a lot – generally, the prosperity of a country is closely correlated with its institutional quality. When institutions fail, trust is eroded and the stock of social capital depreciates, thereby compromising economic growth and development. Moreover, collaboration between the public and private sectors is a crucial co-creator of productivity growth; in the absence of strong institutions, however, the collaboration between the public and private sectors may become dysfunctional, with both sectors colluding in the pursuit of personal gain at the expense of consumers and taxpayers. Unfortunately, there is large body of both anecdotal and documented evidence suggesting that some of South Africa’s once-proud institutions and institutional values were dealt a cataclysmic blow during the almost decade-long leadership of former President Jacob Zuma.  This was also accompanied by a warped allocation of financial and human resources. This is the legacy that President Ramaphosa has to contend with and repair. The crucial question in this regard is whether we will be able to restore and preserve the integrity, autonomy, and competence of our democratic institutions. Institutions establish constraints – both legal and informal (norms of behavior) – thereby determining the context in which individuals organise themselves and their economic activity. Moreover, institutions influence productivity, mainly through providing incentives and reducing uncertainties

Bearing in mind that all the forces and trends that drive socio-economic success are inter- and co-dependent, it can be argued that the two key uncertainties – the “make or break” issues that will determine the country’s future, are

  • the generation of sufficient and appropriate skills; and
  • the restoration of the capacity and integrity of our democratic institutions.

These two driving forces can be used to craft four scenarios of South Africa in, say, 2030, as depicted below.

The basic narrative of the “best case” (Gold at the end of the rainbow) and “worst case” Winter of discontent) scenarios can be presented as follows:

 

Winter of discontent Gold at the end of the rainbow
  • Rent-seeking behaviour
  • Enclaves of prosperity
  • Vigilantes/warlords
  • 80/20 society
  • High import propensity
  • Elitist growth path
  • Skills divide
  • Digital divide
  • Uncontrollable state debt
  • Tax evasion
  • State loses control
  • Social pact (capital, labour, govt, civil society)
  • No tolerance for crime
  • Jealous protection of democratic institutions
  • Tolerance and goodwill
  • Accountability
  • Leveraging of natural resources
  • Appropriate skills
  • Competitive exports (tradeables)
  • Entrepreneurial spirit
  • Broader tax base (through organic growth)
  • Sensible govt spending

It is rather unlikely that either of these extreme outcomes will transpire in exactly the way described above. The real, current question, therefore, is whether the future of South Africa will tilt towards the first, sanguine set of outcomes; or will we experience the tragic denouement portrayed in the second narrative.

A victorious ANC and its leader will not in and of themselves determine the country’s future. However, President Ramaphosa will hopefully use this window of opportunity to restore the aesthetic and moral fibre of society, so that normlessness, entitlement, and selfishness give way to ethical behaviour. He also needs to eradicate elitism, autocracy, and illegitimacy; and establish and entrench of a shared image of a desired future, with government playing a key visionary role, moulded by foresight and long-term planning,

At this crucial juncture of South Africa’s post-apartheid era, President Ramaphosa is arguably the only person with the ability and will to introduce and implement a plausible turnaround strategy. However, “one swallow does not make a summer”, and there is no quick fix that will yield immediate tangible results.

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Private Sector 2.0: Fusing Business and Human Rights

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Private Sector 2.0: Fusing Business and Human Rights

  • Prof Brian Ganson
  • MAR 20 2019
  • Tags Opinion Piece, Human Rights day, Business, Future, Private Sector

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It is not hard to conclude that business and human rights have been at odds for most of the history of what is now South Africa. In 1893, the British periodical Truth called Cecile Rhodes ‘the head of a gang of shady financiers’ who operated ‘on the principle that “godless heathen” ought to be mowed down with Maxim guns if they happen to inhabit a country where there may be gold’. A century later, the Truth and Reconciliation Commission documented ‘the role business played or failed to play in the apartheid years’, ranging from active collaboration in security structures to complicity in labour repression, pass laws, and forced removals.

“We only need to look around, from smallholder farmers to street traders, to remind ourselves that making, buying, and selling are deeply embedded in our collective DNA.”

And with the South African Human Rights Commission stating unambiguously in 2016 that “the mining sector is riddled with challenges related to land, housing, water, the environment, and an absence of sufficient participation mechanisms and access to information”, as well as a slew of more recent corruption scandals involving not only shady actors but some of the world’s most prominent corporate names, the post-apartheid story seems to be one of sorry continuity rather than of positive change.

Yet measured voices such as that of Harvard economics professor and Nobel laureate Amartya Sen remind us that ‘no economy in world history has ever achieved wide- spread prosperity, going beyond the high life of the elite, without making considerable use of markets’. We only need to look around, from smallholder farmers to street traders, to remind ourselves that making, buying, and selling are deeply embedded in our collective DNA.

A sensible question therefore seems to be how we can have a market economy in South Africa – supporting and rewarding human enterprise – without also falling victim to what political philosopher and Harvard Law School Professor Michael Sandel calls the market society – one where human beings are disposable inputs and the human rights of people outside the workplace not a business concern.

“A next step may be to unambiguously acknowledge that business is part and parcel of our political economy, directly shaping human rights outcomes through its own actions and inactions.”

A starting point for an answer might be to more critically examine the global economic system we have wholeheartedly embraced since the democratic transition – one where hot capital with short-term objectives is richly rewarded in South Africa, to the detriment of long-term investment in productive assets and human capital. Ethiopia and Rwanda, African countries that have experienced positive growth in both the economy and a wide variety of social indicators – as well as China – have notably implemented heterodox approaches to economic development that help to take the sharper edges off of global capitalism. In South Africa, in contrast, we argue endlessly over the minimum wage for farmworkers, while in practice we let it be set by global buyers who threaten to stop buying fruit from us should we dare to raise wages and thus prices.

A next step may be to unambiguously acknowledge that business is part and parcel of our political economy, directly shaping human rights outcomes through its own actions and inactions. It is almost quaint to look back at how mass movement and white business leaders gathered under the banner of an “apolitical economy” when, in 1990, the Consultative Business Movement (CBM) helped to organise a meeting to reduce mutual distrust and start work towards a new national economic framework. The intervening years have made clear that we must put to rest any notion that wealth creation and the human rights advancement that comes from wealth distribution can somehow be treated as separate.

South Africa has a youth unemployment rate around 50%. The prospects for the future may be even dimmer: extrapolating from recent statistics, less than a third of students currently in grade one will achieve their matric, and only a third of even them will go on to higher education – even as the economic prosperity and civic engagement that underpin human rights require ever greater skill and engagement.  This is a recipe not only for human rights disaster, but for massive social upheaval.

Even a private sector driven largely by its own interests should therefore be looking much harder at itself and the role that it can play in advancing human rights. Yet, as the founders of the CBM critiqued in the apartheid era, private sector actors in contemporary South Africa – even when they are not directly undermining human rights through practices that are either outright illegal or merely brutal from a human rights perspective – appear ‘to want to follow an on-going incremental route and to rely primarily upon Government-led initiatives’.

The CBM was a latecomer to the democratic transition, and even its supporters caution that ‘it is important not to exaggerate the role CBM played, nor to make claims for business in general’. All the same, it operated under the principle – one that resonates again today – that business ‘cannot afford itself the privilege of staying out of difficult conversations’.

It is perhaps again time to recognize that ‘traditional methods of interaction’ by business on issues of human rights are inadequate. A vanguard is once again required to reaffirm the power of dialogue, trust building, and consensus within the broadest possible circle of South African society; to exercise fearless opposition to those inside and outside of government who resist the progress envisioned by the Constitution; and to empower those change agents in the broader society most in need of support.

This in turn will require a ‘voluntary and independent group of senior business leaders and corporations’ today, as the CBM described its own role then, willing to ‘acknowledge and support the need for constructive transformation of South Africa’s political economy’ in the interest of human rights for all.

Brian Ganson, JD, is Head of the Africa Centre for Dispute Settlement and Adjunct Associate Professor at the University of Stellenbosch Business School (USB).

Business and human rights are inextricably linked, so let’s talk about it
The private sector has to up its game in identifying how it can help to advance society. Read more in Business Day.

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budget

As a woman, what does the budget mean for me

USB News

As a woman, what does the budget mean for me

budget

  • MAR 08 2019
  • Tags Opinion Piece, Women, Budget, International Women’s Day

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Walking in the streets, being in the workplace, even sitting at home or being a student as a woman in this nation may open one to a plethora violations. South Africa is currently facing a national crisis of rape, violence and femicide against women and children. Globally surpassing all our counterparts, we have the highest level of femicide at 12.1 women murdered per

100 000, and the highest level of incidence of rape at 138 per 100 000. These shockingly and unusually high levels of violence require a multipronged approach, but more importantly the judicial and policing response must be buttressed by finance.

The Minister of Finance in his recent address informed the nation of a R1.8 trillion budget estimate that will be spent in the upcoming financial year. We heard of the R15 billion downward tax burden revision and the R248 billion shortfall National Treasury is confronted with. This points to the indebted fiscal position as we currently spend more than what we are able to collect as tax. The result is a persistent budget shortfall leading to between 4.3% to 4.6% deficit over the short to medium term. Driving unsustainably high debt to GDP ratios, we have meandered from 55.9% and we creep towards the threshold of 60%. If we surpass these levels we not only have credit rating agencies to worry about, but we are likely to reverse government expenditure gains as we knock on the 59% ratio in the short term due to the high debt servicing cost burden.

“We need a different type of growth. A growth that drives poverty indices downwards, a growth that minimizes inequality and a growth that attacks unemployment that is largely female in nature.”

The numbers show growing our economy has to be the priority of the state and all its partners. This growth has to exceed the stagnant 0.7% growth of 2018, in fact we have to be dreamers and target a 6% pro-poor, labour intensive and inclusive growth. Some would argue that is what we did more than a decade ago but we derailed. I agree that we derailed, I however disagree that our economic policies were pro-poor and labour intensive targeting in particular rural and marginalised women in both urban and peri-urban regions. They were not.

We experienced a largely jobless growth in the mid-2000s, we need a different type of growth. A growth that drives poverty indices downwards, a growth that minimizes inequality and a growth that attacks unemployment that is largely female in nature. Poverty looks black, inequality is intensified upon women and unemployment exacerbated with the youth. The 2017 Stats South Africa Poverty Report observed that poverty levels in the population have dropped from 66% to 55% between 2006 and 2015. Yet we still have more than 30 million people living in poverty. What was observed is the national level of inequality as measured by the Gini coefficient is 0.65 with black Africans showing the highest levels of poverty. Females have both higher levels of poverty and unemployment, they bore the biggest brunt of the jobless growth phenomena due to our economic structure and the inability of existing incentives to absorb the marginalised in critical mass into the heartbeat of economic activity. South Africa is now growing at a snail’s pace, and this has to be changed. The pattern we see is that there is a clear feminization of unemployment as women are facing 29.4% unemployment versus male unemployment of 25.9%, this worsens in the 15-24 year old bracket more than doubling.

“Growth must benefit the poor for it to be sustainable, of which most are women and rural. There can be no real growth without women being empowered. Empower women and the entire nation will grow.”

Stirred up we were after the presidential State of the Nation address, promises were made leaving us full of hope. The budget speech yanked us back to reality as it did not give the nation a clear growth agenda, the nation is in dire need of a succinct, prioritised sectoral interventions and funded growth plan. How will we achieve acceleration of growth with the multiplicity of economic cluster interventions that have not yielded an increase in the value added contribution of primary and secondary sectors in the last two decades? The targeted incentives are already in operation through our economic cluster ministries and agencies have not led to a jump in growth. Instead we see a crippled mining and agriculture sector coupled with deindustrialisation. This was long before anyone even mentioned the words land expropriation without compensation. Instead, whilst emerging market economies are averaging 4.5% growth, higher than first world economies at a meagre 2-3% average due to growth of value adding sectors and aggressive exporting strategies. South Africa remains on its knees at an estimated 1.5% growth for the year ahead. One wonders how this will come to pass with no clear growth plan, minimal targeted interventions for rural and marginalised communities to access markets and growth of SMMEs, and continued trade deficits on the back of lackluster export levels by largely white owned companies. Positive signs is the evidence of fiscal consolidation shown by the state in reducing expenditure and the efforts towards the improvement of SARS tax collection capabilities. The conditionality of attaining guarantees for state owned enterprises is a sign of a change in the free for all mentality that reigned where we now have almost R800 billions of state guaranteed debt. Thrown upon us might I add by a predominantly male led government, with male CEOs, executives and Chairperson’s in state owned enterprises. Women remain on the brunt and receiving end of decisions they were never welcomed into the boardroom to partake in.

 

A concerted efforted in the growth of the economy must be made to ensure the 51% women become economically active agents of the economy. Factors such as the scale of state expenditure that is allocated towards women, women owned companies, rural based cooperatives that comprise largely of women and equivalent has to be emphasized. State procurement is not sufficiently used to empower women, in a targeted and concerted effort. To improve the social and economic status of women Treasury must capture and monitor gender related indicators in procurement that must drive legislative prescripts advancing women across all departments and agencies. How much of the proposed R1.8 trillion budget will be allocated towards gender specific initiatives that have the power to transform the economic plight of women significantly to shift unemployment and inequality? How much of our economic cluster focuses on equipping SMMEs through agencies such as the National Empowerment Fund and SEFA who are geared towards supporting the likely game changers of our economy? With a thrust on emerging entrepreneurs, they are likely to positively impact the indicators driving the high Gini-coefficient. Significant capitalisation of these institutions must be considered and included in the allocation by ministries towards development finance institutions that empower specifically women and SMMEs that are black owned.

 

Disappointingly, after the Gender-based violence (GBV) Summit and promises made to resource the fight against GBV, there are few concrete financing proposals mentioned at budget level. We don’t know how the state intends to finance interventions that are required to prioritise the institutional response to the GBV crisis. There is need for a multiplicity of interventions, the criminal justice system must be supported to ensure that it is able to adequately address the complexity of prevention, law and policy support interventions that strengthen our responses. This requires sufficient budget allocation and resources to hold offenders accountable, to adequately equip the justice and policing cluster with the might to respond. I am not at all suggesting we build more prisons. We will watch closely the budget votes and whether institutions that support the plight of women will be adequately financed. If not, the budget as it is stands means the average woman on the ground will stay the same, excluded, marginalised and poor. The continued struggle of women will remain evident in statistics that show the lack of prioritisation, exclusion and violation. This must change, I am hopeful, forever the optimist, women and the girl child will be empowered in this our lifetime. Growth must benefit the poor for it to be sustainable, of which most are women and rural. There can be no real growth without women being empowered. Empower women and the entire nation will grow.

Nthabiseng Moleko is a Commissioner at the CGE who also teaches Economics and Statistics at USB. Follow her on Twitter @drnthabimoleko

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