Neelam Rahim | neelam@radioislam.co.za

3-minute read
24 October 2024 | 10:21 CAT

The Free Market Foundation (FMF) called on the Government of National Unity (GNU) to dramatically overhaul the trade policy environment in South Africa – Dr Morné Malan, Deputy Head of Policy Free Market Foundation.

A new policy paper from the Free Market Foundation (FMF) urges South Africa’s government to implement substantial trade reforms, emphasizing the need to enhance economic freedom and drive growth.

In an interview on Radio Islam International, Dr Morne Malan, the FMF’s deputy head, highlighted how the shift to a Government of National Unity (GNU) offers a unique opportunity for policy changes that could alleviate poverty and boost employment. However, he stressed that political will is essential.

“What we’re actually trying to do is inform the policy direction. The recent cabinet changes didn’t result in clear policy shifts,” said Malan. “The GNU must commit to creating the right framework for economic growth.’”

The FMF’s recommendations focus on reducing tariffs, eliminating non-tariff barriers, and easing restrictions on financial markets. According to the foundation, these reforms would benefit industries by allowing them to compete more freely in global markets. Malan acknowledged concerns from certain sectors, such as textiles and steel, which rely on protective tariffs. However, he cautioned against supporting “zombie industries” that depend solely on government subsidies, as this hinders broader economic development:

“We need policy certainty. But keeping industries afloat at the cost of others hurts the economy and prevents growth downstream.”

The FMF also calls for more accessible visa policies to stimulate tourism and trade, proposing visa-free travel for African and BRICS countries. “We perform well in tourism, but we can do better,“ Malan remarked. He emphasized that improved immigration frameworks and visa reforms would attract foreign students and travellers, boosting local economies.

Further, the FMF’s paper discusses ways to enhance the ease of business in South Africa. Malan explained that excessive regulations—many of which stem from apartheid-era policies—remain a significant hurdle:

“Capital can’t be contained; it must be coaxed. South Africa needs to make it easier for businesses to establish themselves and operate here.”

The FMF introduced the concept of the “freedom dividend,” a term coined by the Fraser Institute. This concept suggests that countries with greater economic freedom experience higher prosperity, even among the poorest citizens. Malan concluded, “Promoting economic freedom will yield long-term benefits for South Africa’s economy, ensuring growth and human flourishing.”

This policy push comes amid hopes that the GNU will prioritize inclusive growth and create sustainable pathways for economic development.

Listen to the full interview on The Daily Round Up with Moulana Junaid Kharsany and Dr Morne Malan here.