The state of the SA economy formed one of President Zuma’s top priority in his 10th State of the nation’s address (SONA 2017)
Speaking with the state-owned broadcasters (SABC) hours after a chaotic House of Assembly- caused by opposition parties who claimed he is unfit to address the house, President Jacob Zuma acknowledged the stagnant nature of the country’s economy but blamed the effect on the Nation’s big four banks who he claimed are controlling the economy.
Zuma said the top four banks which include Absa, Standard Bank, FNB, and Nedbank, are in the habit of treating the poor and average black people unfairly due to their lack of collateral. “The time has come: we should be able to deal with the economy at a fair level,” he said.
“If you have got four banks – major ones – and they take everything; they don’t want you to do anything,” he said on SABC’s Morning Live, which is sponsored by the Gupta-owned newspaper, The New Age.
“We actually frustrate the SA economy deliberately by making only a few people control the economy,” he said, adding that he was told by those who do business that at times they even take your ideas and implement them because they have got the money.
“At the heart of the economy is finance,” he said. “If the… critical banks that dominate everything are just four… in all countries where the economy is developed, the banks are all over because it is the finances that make the economy grow.
Zuma went on to say that his government looks forward to making changes that will enforce radical economic transformation. He called for more banks to be institutionalized so they would “unpack the economy and give opportunities to everyone.”
“There’s a skewed kind of economic control. We say that we must be part of owning, managing and be part of controlling the SA economy.[But] you can’t have somebody who is super rich and have somebody who is super hungry in one country,” he said.
“As a government, we have a responsibility if we are to have the harmony if we are to have the reconciliation. We should close the gap, not create a situation where others are going to be poor or that we change this.”
President Zuma spoke a lot about the SA economy during his final SONA, held on Thursday night. There, Zuma set out exactly what the ruling African National Congress (ANC) means when it says radical economic transformation needs to take place in South Africa.
He quoted from a speech by former ANC president Oliver Tambo, who had said radical economic transformation required a fundamental change in the structure, systems and ownership patterns of the economy, but quickly added that his government would achieve this within the next few months that ends his tenure in office.
According to him, the government would, through regulations and programmes be able to use the state’s buying power to empower small enterprises, rural township enterprises and promote local industrial development.
One of the ways in which government plans to enforce broader economic participation is to draft new legislation to counter economic concentration. Although Zuma didn’t go into details, it is assumed he meant South Africa’s financial services sector, which will in a short while, receive a round of public hearings in Parliament where a number of stakeholders will provide input on how they see the sector being transformed.
The proposed legislation, which Zuma said would help “de-concentrate” certain sectors, will be drafted by the Department of Economic Development and will soon make its way to Cabinet and Parliament for deliberation.
“During this year, the Department of Economic Development will bring legislation to the cabinet that will seek to amend the Competition Act to address the need to have a more inclusive economy and to de-concentrate the high levels of ownership and control we see in many sectors.”
The SA economy under Zuma has been staggering with the Treasury estimating a 0.5% growth last year, and the 27% jobless rate is the highest since 2003. The nation is struggling to retain its investment-grade status at S&P Global Ratings and Fitch Ratings.
The President, however, commended South Africa’s competition authorities for doing well in uncovering cartels and punish them for breaking the law.
He maintained that there can be no sustainability in any economy if the majority is excluded but added that the country needed to move beyond words to practical programmes.