Key topics:
- Weakening property rights and race-based policies threaten economic growth.
- Most South Africans prefer job creation over social grants and BEE policies.
- The GNU’s pro-growth agenda is at risk due to anti-investment policies.
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By the Institute of Race Relations
Minister of Finance Enoch Godongwana’s hopes of advancing the GNU’s pro-growth ambitions are critically undermined by the weakening of property rights and the ANC’s determination to double down on BEE failures, warns the Institute of Race Relations (IRR).
The coalition administration’s founding goals of economic growth, job creation, and fixed capital formation have likely been placed beyond reach as a result.
The government’s bad policy choices also run counter to what most South Africans say they want and need to succeed.
The IRR’s most recent annual polling, published in November 2024, once again affirms South Africans as non-racial, moderate, and economically pro-growth in their core beliefs.
By a large margin, South Africans identify job creation as the most important national priority. 83% of South Africans prefer a government focused on job creation over social grants. 63% of South Africans believe the government must remove barriers to economic growth and allow businesses to create jobs.
The GNU’s founding commitment to a pro-growth agenda has likely been responsible for the broad public support for the GNU so far. Yet, recent policy developments put this at significant risk. The signing into law of the Expropriation Act by President Ramaphosa, as well as his doubling down in SONA earlier this month on a toxic new BEE tax to fund race-based government intervention in the economy, place Minister Godongwana in a near impossible position, having to nurture the sapling of fiscal prudence planted in the 2024 Medium-Term Budget Policy Statement, as well as making the case for pro-growth government policy, while shackled to fundamentally anti-growth, pro-poverty policies.
Says Hermann Pretorius, IRR head of strategic communications: “South Africans want and desperately need economic growth. For that, we need to attract investment. Yet, the already weak investment case for South Africa has now been further weakened by the ANC’s commitment to race-rigged policies and its assault on the property rights of all South Africans. This foolhardy obstinacy in the face of harsh economic reality is not only positioning the government in diametrical opposition to what South Africans want to see in terms of policy, but also risks setting Minister Godongwana up to fail on the issue of economic growth.”
The IRR’s Blueprint for Growth series of papers over the past year set out practical and credible ways to get South Africa’s economy growing again. The 2025 edition of the Blueprint for Growth paper on public finances and tax policy, published yesterday, exposes the ineffectiveness and waste of the bloated state, particularly spending on BEE premiums in public procurement, that South Africans can no longer afford.
Says Pretorius: “Achieving growth isn’t alchemy. There are things that secure economic growth, and there are things that deter it. The GNU would do well to get back to basics on economic common sense. Making South Africa an attractive investment destination and a place where people can truly build up wealth means cutting taxes and BEE premiums, bringing an end to all race-rigged policies, protecting property rights, and building on the fiscal prudence the GNU has seen introduced. Failure to take this common-sense, pro-growth path could signal the beginning of the end of the GNU’s wide public support.”
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