home Andile's Column, Featured #SONA2017: Whites benefit the most from R500  billion government budget 

#SONA2017: Whites benefit the most from R500  billion government budget 

By Andile Mngxitama

In the State of the Nation Address (SONA), President Jacob Zuma revealed a commitment by government to use a combination of instruments to contribute to economic liberation. In particular, the president pointed out that the government would “utilise to the maximum, the strategic levers that are available to the state”. The president named amongst others the utilisation of “legislation, regulations, licencing, budget and procurement as well as Broad Based Economic Empowerment charters.” These instruments are aimed to “influence” the conduct of “the private sector and drive transformation”.

Perhaps one of the most important details revealed by the SONA is the fact that the South African government spends a whopping R500 billion a year on procurement of services. Check that again – R500 billion!

Well more is in store. This figure excludes the R900 billion spent on the infrastructure budget!

Government spends staggering amounts of money procuring goods and services. The President is correct to insist that “those budgets must be used to achieve economic transformation”.

The SONA should have provided figures of who are the main beneficiaries of these budgets so that South Africans could have a true picture of how white monopoly capital –  in more than twenty three years into democracy – is still the main beneficiary of the government budget.

An example of this figure is how the South African Airways (SAA) R24 billion annual procurement benefits white companies which take 98% of it, while black owned companies only get 2%! This is reflective of the true pattern across all State Owned Entities (SOEs). Similarly, Eskom is fighting to bring in black business into the supply of coal but this has been resisted by white monopoly capital which has the support of the Minister of Finance, Pravin Gordhan.

The big stick in the hand of the state within current constitutional means, is to use its own buying power to drive economic transformation. The regulations which were gazetted on 20 January 2017 “making it compulsory for big contractors to subcontract 30 percent of business to black owned enterprises” is too timid, too little, too late. Why is the state not making direct black stake in all big contracts to be 50% BBEE? Why are blacks put in a position of subcontracting from white monopoly capital? What about a target on direct procurement by black owned entities? 

Government is not aggressive in using the strategic advantages it has to unlock black ownership of the economy. Furthermore, it would be important for the nation to know what the percentage of state funds that goes to the white owned banks such as ABSA is.

The reason for this timidity is the fact that the Minister of Finance, Gordhan, is doing all in his powers to protect the interests of white monopoly capital. 

If President Zuma is serious about using the massive procurement budget to drive economic transformation, then he has to fire Gordhan as priority number one. In so long as Gordhan is Minister of Finance, there is no hope for aggressive policy implementation to achieve any measure of economic justice.

It is shocking that state coffers are being looted legally by white monopoly capital without contributing anything to the developmental agenda to benefit all.

It is time that black people demand a direct benefit from the R500 billion annual procurement spent as well as significantly benefit from the R900 billion budget allocation for infrastructure development. Part of achieving this is the breaking down of the construction cartel which is law unto itself and is involved in multiple illegal activities to sabotage any expansion of blacks into the sector.

White monopoly capital uses its agents, such as opposition parties as well as campaigns such as “Save South Africa”, which is led by Sipho Pityana – the chairman of one of the Oppenheimer businesses, Anglo Gold Ashanti – to continue its plunder. Pityana is therefore fighting for his white bosses to continue to dominate the economy under the pretext of fighting corruption.

The SONA as provided a good basis upon which black people should demand real economic liberation now! White monopoly capital has had it good for far too long.

Andile Mngxitama is the National Convener of Black First Land First

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