Deputy President Paul Mashatile has bemoaned that the previous 15 years of the democratic dispensation were bad for the domestic economy.
Mashatile was addressing the Financial and Fiscal Commission’s 2025 Budget Roundtable on Wednesday, where he outlined priorities for improving fiscal management.
“For the first 15 years of the country’s democratic rule, the economy grew at a rapid pace. However, over the past decade and a half, the country’s economy has been marked by slow growth,” said Mashatile.
He acknowledged that policy interventions since the start of democracy have not been enough to significantly reduce poverty and inequality.
Mashatile said the seventh administration was committed to investing in inclusive economic growth, tackling the cost of living, and building a capable, ethical, and developmental state.
These include better handling of national debt, more strategic government spending, fairer tax policies, and measures to promote economic growth.
He also highlighted the importance of creating a stable macroeconomic environment.
“The goal here is to create a sustainable fiscal position that supports economic growth and manages risks effectively,” said Mashatile.
The ANC, according to Mashatile, gained political power and not the levers of the economy in 1994.
Economy still concentrated in white hands
The deputy president stated that the economy is still not diverse, which shows that real structural change has not happened yet, adding that most people are still not fully involved or playing a meaningful role in the main parts of the economy.
He referred to research by the JSE from 2013, which shows that only a small percentage of listed company ownership is held by black people.
Out of 271 listed companies, 10% is direct ownership, while 13% is black ownership through institutional mandated funds.
He said despite policies such as broad-based black economic empowerment, economic control was still concentrated in white hands.
Mashatile argued that structural transformation cannot be achieved without strong policies to support black industrialists and greater participation in the entire value chain.
“Industrialisation and reindustrialisation are therefore critical for driving and achieving sustainable social, institutional, and political economic changes.
“The focus on industrialisation and reindustrialisation is predicated on localisation and beneficiation through the designated preferential procurement policy programmes.
“These policy interventions are critical for structural transformation. Realising structural transformation necessitates a departure from conventional business practices,” he said.
Significance of continental trade deal
Mashatile continued: “This business-unusual approach includes the speed of implementation, particularly the beneficiation policy or better-defined value-added processing, because beneficiation involves critical stages of large-scale, capital-intensive activities such as smelting and sophisticated refining plants.”
China, according to the deputy president, introduced the Belt and Road Initiative, and South Africa should invest in infrastructure and industrial development, particularly through special economic zones.
Mashatile highlighted the African Continental Free Trade Agreement as a significant opportunity to boost intra-African trade by 50% by 2035 and attract investment by promoting manufacturing and reducing dependence on raw material exports.
“This agreement strengthens Africa’s global trade position, attracting more foreign direct investment into manufacturing and infrastructure and reducing reliance on commodity exports, thereby promoting industrialisation and diverse industries.”
