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A Closer Look – July 2024

A Closer Look – Being careful what you wish for

The Department of Trade, Industry and Competition (DTIC) can almost be called a ‘silent ministry’. While it is a crucial economic portfolio, most of the policies and decisions have long-term effects and exert a fundamental influence on employment, industrialisation, and economic growth. The DTIC minister seldom makes decisions that create mainstream headlines, but for people closely involved in the economy these decisions are earth-shifting.

During the cabinet negotiations between the DA and the ANC, the post was a huge point of contention. The ministry is seen as particularly significant because it oversees the government’s flagship policy of boosting Black South Africans’ participation in the economy, as well as the competition commission, which scrutinises mergers and acquisitions. The DA wants to scrap some of the ANC’s black empowerment programmes, saying they have not worked and have mostly benefited a politically-connected elite. For the DA, therefore, success in Trade and Industry would be a huge vindication of the DA’s pro-business policies.

Previous minister Ebrahim Patel (2019 – 2024) was known to be largely socialist, pro-protection, and pro-localisation. He came to the portfolio as a trade unionist, and applied trade union philosophies to his mandate. According to the department description on the DTIC website, the department was required to balance the contradictory positions of encouraging trade while protecting local industry; creating employment while protecting the employed, building industrial capacity while transforming that same industrial capacity.

Patel was praised for a number of elements – one of which, sadly, was that “he is not corrupt”, but statistics show that under his watch unemployment increased*, the country underwent large-scale de-industrialisation*, and manufacturing capacity decreased*.

Therefore when Patel announced he would not return to Parliament, the industrial and trade sector eagerly awaited news as to who would replace him, and what their policies were likely to be. So there was a lot of head-scratching when Parks Tau was announced as the new DTIC minister. Tau is a completely unknown quantity, with a mayoral and local governance background.

But according to colleagues, Tau is a good choice for this crucial portfolio.

“He is a very hard worker, and a highly intelligent, capable and pragmatic politician,” says Patrick Atkinson, a DA MP who has worked extensively with Tau on several portfolios. “He is a technocrat with no ideological baggage and is highly regarded.”

Industry commentators are hopeful that Tau will either abandon or modify current protectionist and restrictive industrial and trade policies. It is likely that Tau would follow ANC policy, but it is also clear that ANC policy is shifting away from centralisation towards public/private partnerships and more open markets. This is not because the ANC is moving towards privatisation and globalisation but rather they have been forced into it by the large-scale failure of SOEs. The appointment of pragmatic Tau is a signal that this will continue.

“Ramaphosa has been moving slowly towards private-public partnerships in many aspects of the economy,” Atkinson said, “mainly because the government has run out of money and he really has no option, even if this is unpalatable to his trade union colleagues. It is very likely that Tau thinks the same way.”

Further, the DA’s Andrew Whitfield as a deputy minister is another signal that DTIC will be moving towards a more open policy. Whitfield also has no experience in trade and industry, having been in the past involved with policing, and was the DA Premier Candidate for the Eastern Cape. However, he has been described as a person with very high EQ (Emotional Quotient) with an ability to work amiably with opponents. He is likely to be successful in finding the middle ground between the ANC and DA’s different approaches towards economic growth.

“Andrew is also a very hard worker and has very good people skills,” said a colleague. “He might have a challenge working within an environment dominated by unions and socialists, but his great talent is being able to get on with everyone.”

The other deputy minister, Zuko Godlimpi, is a young ANC MP who will be new to cabinet. He is the youngest member of the ANC NEC at 32, and hails from the same province as Andrew Whitfield. The two have worked together amicably in the past. Donald Mackay, director of international trading consultancy XA International, has welcomed this apparent shift.

“Our industrial policies have manifestly not worked, so it’s good to have new eyes on the problem. I’m sure Minister Tau and his deputies will take this portfolio seriously and give it the attention it deserves,” he said.

With Patel’s main endorsement apparently that he was not corrupt, there will also be interest in Tau’s ethical background. Interestingly, the Wikipedia entry for Parks Tau previous to his appointment referred to a corruption scandal that implicated his wife. Subsequent to his appointment as Minister, that portion of his profile has been removed.

*Unemployment increased from 25,54% in 2019 to 32,1% in 2024. See graphs for
manufacturing.

 

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