- South African economists weigh in on what life would be like under EFF rule, should they win the election
- Dubbed 'populist nonsense', the manifesto holds a grim future for the nation according to expert opinion
- With proposed increased spending on social welfare, education and job creation, the cost will be carried by the taxpayer
Described as 'populist nonsense' the election manifesto has experts convinced the Economic Freedom Fighters will led South Africa down a disastrous path.
Sam Rolland, an economist at Econometrix, explained that the manifesto's economic growth plan was the most radical of the leading parties contesting the 2019 elections, but explained that it was unrealistic:
“The focus on a greater role for the state in economic development will undoubtedly place a far greater burden on the fiscus, first on account of the expanded spending programme the party has drawn up and, secondly, through crowding out of investment from the private sector and international community,”
Leading economists are convinced that the proposed policies will burden the fiscus, worsen the already dire unemployment situation and drive away potential investors.
Dawie Roodt, chief economist for Efficient Group, agrees that funding for the EFF's plan will come from the South African taxpayer, adding that:
“However, if the economy were to take a downturn, the lack of tax revenue would result in an unsustainable debt burden on government, which would result in prolonged periods of recession and capital flight from the economy,”
According to The Citizen, the proposed economic growth detailed by the party was also over ambitious. Roodt explained that:
“The expected growth rates of 6% in the first two years and 10% in the next three are largely unrealistic, given that structural problems in the education system and availability of skilled labour limit the ability of the economy to grow anywhere near the levels envisioned in the [National Development Plan] without high levels of overseas investment and pro-growth policies that allow productivity to increase.”
The expert was scathing in his critical assessment of the manifesto, describing it an unrealistic and an impossible wish list:
“It will cost hundreds of billions more, huge tax increases, will undermine the tax base and, ultimately, lead to weaker growth,”
Roodt estimates that the cost of implementing the EFF's manifest at R300 billion with the potential for more costs:
“But, keep in mind, it’s not only how much they will spend, it’s also the effect on the broader economy,”
With Malema promising social grant payments double the current standard and a national minimum wage increase, Roodt believes the new minister of finance would be 'Father Christmas'.
However, Briefly.co.za gathered that various polls indicate it is unlikely that the party will be able to increase electoral support more than the 6.4% it obtained in the last elections.
On the proposed wage hikes, Rolland commented that increasing the cost of labour would be counterproductive to job creation. Roodt agreed, saying that:
“Without a growing economy, firms would be forced to lay off staff at these higher wages and increase the rate of unemployment. The plans for economic growth and current levels of productivity are insufficient to absorb labour at such a high rate,”
Further to this, the increased role of government under the EFF would expose the state to an increased risk of corruption and inefficiency.
Rolland added that the increase in social welfare would result in an additional R13 billion in spending, over and above the current costs.
In a nutshell, life under the EFF could mean a heavily taxed, welfare reliant and unproductive South Africa.
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