The Economic Action Plan that Cyril Ramaphosa launched on Monday to address: “the persistence of low economic growth, severe unemployment, and the impact of global trade instability” will not work because, like so many of the plans before it, it does not address the reasons for low economic growth, severe unemployment, and the impact of global trade instability.

Some basic economics of cause and effect; South Africa’s economic growth rate is low (just a quarter of the rate of its emerging market peers) because levels of fixed investment are low (half that of its peers), because levels of investor confidence are low (just half what they were 15 years ago).

There is a direct relationship between these three indicators.

Between 1994 and 2008, they all rose in unison. After 2008, they all fell in unison.

As for South Africa’s trade relationships, these are unstable because South Africa takes a fundamentally hostile foreign policy line towards the United States and the West more broadly, whilst Chinese and Russian diplomats say that, even if they wished to trade more with South Africa, the country’s internal logistics problems, BEE rules, and general state ineptitude make that difficult.

Ramaphosa told his party colleagues that: “We have made progress over the last few years in advancing economic restructuring and transformation, in improving our capacity to increase infrastructure investment…We have also seen great strides in the progress being made in the logistics sector…But the impact of this work is yet to be felt in our growth and employment figures.”

That’s a telling statement: “the impact of this work is yet to be felt in our growth and employment figures.”

At this newspaper, we would like to think that if every past plan has failed to lift growth and employment, the state and the former ruling party might think there was something wrong with those plans and that a new plan, borne of new thinking, must be introduced.

Alas, that is not what Monday provided.

“Preferential electricity tariffs for ferrochrome, manganese, and steel” mean, in practice, that other sectors of the economy and households must subsidise the steel industry. That’s a non-starter in an economy where businesses and consumers are already under great pressure. To reduce electricity costs, supply must increase. Making those businesses that are still in existence, and their customers, pay more to keep those that are failing afloat is not something that is going to work.

“The implementation of Transnet’s recovery plan, private sector participation in rail and port operations, and upgrading of export corridors” is the right sentiment but requires the state to hand over operating control of port and rail infrastructure to private partners. It thus far refuses to do so, fearing a loss of strategic control (the same reason it won’t agree to an investment pact with the US). Hence, progress is stifled, ports operate poorly, and investor sentiment stays down.

To: “rebuild our chrome and manganese industries [via] export tariffs…[and] defensive duties on dumped imports” means that the state will undermine export earnings while increasing costs in the domestic economy.

Resolving: “to improve the capacity of the state to manage major projects [and to] professionalise the project management cadre” won’t get off the ground without mass prosecutions and procurement laws that prioritise merit and price. But the former ruling party opposes all that. In any event, investment and project management must fall to private actors with the skills and capital to get things done. The state’s role is only to create an environment for such investment, not to actually manage the projects. The same applies to the idea of investing in: “townships, rural areas, and small towns” via state-run: “municipal local economic development technical units.”

But that kind of 1950s Soviet thinking is the regrettable thread that runs through much of the new plan.

Job creation, for example, the plan holds: “requires a massive scale-up of...public employment programmes.” In other words, the state will employ the unemployed. But the budget deficit will not allow for that. Raising the deficit will send the rand on a run and further undermine confidence. Mass job creation can only occur through investors committing capital to new projects, not through: “professionalised cadres” in their: “technical units” redirecting tax revenue paid by the people who do work to employ those who don’t.

Small business growth will be achieved by turning state funding institutions into: “catalytic investors.” If the concern is that commercial banks won’t lend to small business, the state should consider what might be stopping them. The argument that private banks are hostile to the economic interests of the country is absurd.

The same applies to the idea that: “to enable the growth of provincial economies [South Africa needs] the revitalisation of [state-run] industrial parks with localisation targets, aligning these with special economic zones and corridor planning.” That line could literally have been lifted from Gosplan – the State General Planning Commission, which was the agency responsible for central economic planning in the Soviet Union.

The idea to: “accelerate the diversification of our trade partners” is the right sentiment, but shirking a US investment pact whilst failing to address domestic rail and port snarl-ups means that the opposite of diversification is achieved. The idea that the state will address the consequences by funding: “an emergency industrial support package for sectors affected by increased tariffs” goes straight back to Gosplan.

It is possible to go on, but the point is more than made. Plans like the one put to the public on Monday afternoon are, like its many predecessors, the reason the African National Congress is at 40% of the vote and why, in the local government elections scheduled for late 2026 or early 2027, that number is likely to fall to nearer 30% in South Africa’s urban economic centres. It is not too late for that party if it were to see sense, but Monday’s performance suggests the current leadership is not up to that.