EFF: Partially nationalise companies, use pension funds to underwrite infrastructure

Image credit: Twitter/Economic Freedom Fighters

The Economic Freedom Fighters (EFF) has called for the partial nationalisation of South African companies that are in distress because of the COVID-19 pandemic.

The party issued a statement on Wednesday in response to Statistics SA’s quarterly gross domestic report (GDP) report released on Tuesday.

The report revealed that South Africa’s economy had contracted by a massive 51 percent in the second quarter of 2020 compared to the same period last year. It contracted by 16.4 percent compared to the first quarter of 2020.

‘Government incompetence’

The EFF acknowledged that the COVID-19 lockdown implemented in March contributed to the GDP plunge, but also slammed “the sitting government’s incompetence, lack of clear vision, corruption and capture by the minority white capitalist establishment.”

It accused the government of pursuing misguided policies such as importing personal protective equipment (PPE) instead of localisation, borrowing from the International Monetary Fund (IMF), implementing budgetary cuts, and poorly implementing its R500 billion economic and social relief package.

“The EFF expected this sort of outcome and have consistently warned that a lack of a believable and practical plan will lead to economic decline. South Africa’s economy was already in a downward spiral before COVID-19 because those that are responsible for economic policy have mismanaged South Africa’s economy for a long period,” it said.

EFF’s proposals

The EFF called on the government to abandon “the foolish and unscientific austerity budgeting” and instead increase government expenditure. The government must also introduce a Basic Income Grant “which will entail that all unemployed South Africans must receive R1,000 per month.”

“Government must partially nationalise companies in distress, particularly in the manufacturing sector,” the party said, adding that a State Bank must be established through the African Bank. The State Bank would then be used to pay all public servants and provide credit to small and medium-sized “black-owned” enterprises.

The EFF added, “The approach to massive infrastructure development should be through Build, Operate, and Transfer models which must be underwritten by pension funds.

“The government must cancel its COVID-19 loan guarantee scheme with commercial banks, and all transactions must be managed by the State Bank with political supervision of beneficiaries.”

Other proposals include:

  • Insource all security guards, cleaners and gardeners in all national, provincial and municipalities including state-owned entities.
  • Issue an immediate instruction and allocate sufficient resources to Denel to expand massive industrial capacity to produce health equipment, including ventilators.
  • Amend the PFMA and MFMA to compel national, provincial and state-owned entities to procure 80 percent of all goods from local producers and a minimum of 50 percent from producers of which 50 percent is owned and controlled by women and the youth.
  • The government must declare additional special economic zones with zero company taxes and a building allowance in exchange for each investor to create 1,000 full-time jobs.
  • In the immediate, the government must build makeshift structures to house companies that are willing to move from overpopulated metropolitans and assist them with subsidies to open their production in other provinces.
  • Food procured for hospitals, clinics, correctional facilities, school feeding schemes, and other institutions must be locally procured from black farmers.
  • All retailers in South Africa should be mandated to put 60 percent of locally produced goods and products on their shelves.

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