South Africa's economy is controlled by a small elite and that's a big problem, says Zweli Mkhize, treasurer general of the African National Congress (ANC).
He told members of the ANC's Professional Business Forum (PBF) at a meeting in Johannesburg on Friday that there needs to be a debate about how to broaden the economy and make it more inclusive. The PBF is an ANC business forum. Businesses and business persons pay an annual fee to gain access to events such as this.
There are three issues Mkhize said South Africa needs to address to turn its economy around:
1. Radical economic transformation
Mkhize said radical economic transformation was a policy the ANC adopted in 2012 and now, five years later, government needs to go back to see how much has been achieved.
"When the ANC was looking at their achievements after 20 years of democracy, we found a lot of achievement in terms of ushering in a constitutional democracy and a dispensation which has effectively outlawed apartheid," Mkhize said.
"What remains outstanding is the increasing levels of poverty, inequality and unemployment. These are key issues for the ruling party."
Mkhize said that to counter this, the structure of the economy needs to be broadened and made more inclusive. "We want it to be clear that this is a genuine decision by the ANC that builds on what has been done up to now. This area of inclusivity in our economy is what is most outstanding," Mkhize said.
2. Transformation of the financial sector
Mkhize said concentrated ownership in the financial sector works against the broadening of participation in the economy. He said a whole area of emerging entrepreneurs, especially black entrepreneurs, are generally neglected.
"We don't have a black bank," Mkhize said.
"It's a big issue. It is more difficult as a black entrepreneur to easily get the kind of support from banks than if you were not a black entrepreneur. The issues we need to discuss is how the banks collect deposits from a whole range of people, but when it comes to extending credit lines, it favours those on the high end."
He said there are ongoing discussions of establishing a state-owned bank.
3. Property and land redistribution
Mkhize said there is a "huge amount" of exclusion in the property industry and while government controls a lot of property, only 10 percent of black-owned companies are leasing space to government.
"Government must use procurement policies to help in the transformation process. How can we fast track that?" Mkhize asked.
He said black people were historically allocated 13 percent of the land when there were three million blacks in the country. Now, there are 30 million black citizens sharing that same 13 percent of land.
"The provision of land as a basic asset is key. There are a lot more issues related to land redistribution. We have been under pressure as people believe we are not moving fast enough," Mkhize said.
"Agriculture is one area of the economy we need to be focusing on. This economy can't be growing from Sandton."