Get more Mail & Guardian
Subscribe or Login

‘We mustn’t tire’ — Manuel on SA’s economic recovery

To rebuild South Africa’s economy — in the wake of Covid-19’s onslaught — the country needs a stronger social compact, Trevor Manuel has said. 

The former finance minister, who currently serves as the chair of the Old Mutual board, was speaking at a webinar hosted by the Centre for Development and Enterprise on Wednesday evening. 

Manuel spoke on a range of topics, including South Africa’s economic recovery, cadre deployment and the future of the ANC.

“The president has spoken to it, but it needs a big push. And that is to bring back the idea of a social compact,” Manuel said.

“I think that parts of it were tested … and that is something that South Africans must commit to — a social compact that was the essence of what we crafted in the National Development Plan.”

The National Development Plan was adopted by parliament almost a decade ago and is the product of the National Planning Commission, which was led by Manuel and now President Cyril Ramaphosa. Building an inclusive economy is one of the plan’s cornerstones.

“In a society like ours, I think we owe each other the responsibility to know that nobody goes hungry, that we will do our level best to ensure that there is employment and that everybody can aspire to a reasonable quality of life,” Manuel said.

Manuel cited the government’s economic recovery plan, which was adopted by the National Economic Development and Labour Council in September last year. The council — through which government, business, labour and community organisations negotiate on reforms — is the home of developing a social compact.

The government’s plan, Manuel said, needed to synthesise the positions of social partners but was lacking in detail. “I think that is worrisome.”

In the weeks leading up to the plan’s release, Business for South Africa released its own plan, titled A New Inclusive Economic Future for South Africa

The government’s plan, which focuses on economic growth, job creation and infrastructure investment, has been widely criticised. 

On Wednesday, Manuel referenced one such criticism, levelled by the Thabo Mbeki Foundation. Earlier this year, the foundation released a paper that called the government plan “a vision” rather than a “transformative plan”.

Manuel said fixing public finances was also “fundamentally important” to putting South Africa’s economy back on track. The cost of the public-service wage bill needs to be remedied, he added.

In his budget speech earlier this year, Finance Minister Tito Mboweni restated plans to radically reduce spending on public servants’ compensation, which accounts for 32% of government expenditure over the medium term.

The treasury views an increase in public service compensation as the primary culprit for the sharp rise in government spending over the past decade. Proposed reductions to the wage bill amount to R303.4-billion between the 2020-21 and 2023-24 financial years.

Cutting spending is aimed at stabilising the debt-to-GDP ratio and narrowing the budget deficit, which, according to the treasury, has doubled since the 2020 budget, from 6.8% of GDP to an estimated 14% in 2021. 

Manuel said the government and the public must not lose focus when it comes to issues affecting the country’s economic trajectory. “Those are the issues that I think should be raised up on the agenda. And we need to come back to them,” he said.

“We mustn’t tire, or become tired of talking about these issues, knowing that there are proper decisions to be made to remedy those kinds of matters.”

Subscribe to the M&G

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them.

Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

South Africa at risk of spillover from international inflation, economists...

Higher international oil prices, for example, could affect local transport costs through second-round effects

Johannesburg council member Jolidee Matongo touted as front-runner to take...

The ANC will likely announce a candidate to take over as the city’s mayor next week after consultation with provincial and national leaders

More top stories

South Africa at risk of spillover from international inflation, economists...

Higher international oil prices, for example, could affect local transport costs through second-round effects

Children’s education in sub-Saharan Africa cannot wait

Children are being deprived not only of education, but also nutrition. Governments and the international community must secure these inalienable rights

Johannesburg council member Jolidee Matongo touted as front-runner to take...

The ANC will likely announce a candidate to take over as the city’s mayor next week after consultation with provincial and national leaders

Clashes in Tunisia after president ousts PM amid Covid protests

Street clashes erupted Monday outside Tunisia's army-barricaded parliament, a day after President Kais Saied ousted the prime minister and suspended the legislature, plunging the young democracy into a constitutional crisis
Advertising

press releases

Loading latest Press Releases…
×