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31 July 2014 13:18 (South Africa)
South Africa

Radical economic transformation: ANC’s puzzling game of Cluedo, Chess and Poker

  • Ranjeni Munusamy
  • South Africa
ranjeni-ectransformation-subbedm.jpg

There it is again, like a fat Santa in shopping malls at Christmas time, bringing hope of merriment and magical gifts under the tree. The phrase “radical economic transformation” has been trumpeted out repeatedly throughout the ANC’s election campaign, and now they are ready to implement it, says secretary general Gwede Mantashe. Do not ask for the term to be defined or specifics of what it entails, though. This is not the time for “conceptual clarity”, says Mantashe. But like Christmas, it’s coming. Apparently. By RANJENI MUNUSAMY.

For two years now, political journalists have been trying to plough through ANC parlance to find out what exactly the ruling party’s plans are to achieve economic growth. The use of the term “radical” began at the ANC’s policy conference in June 2012, in the context of discussions of the party’s strategy and tactics document, which propositioned that the country should enter into a second phase of transition.

“This second phase of the transition should be characterised by more radical policies and decisive action to effect thorough-going and continued democratic transformation, as well as the renewal of the ANC, the Alliance and the broad democratic forces,” the ANC policy conference resolution read.

This was reinforced at the ANC’s 53rd national conference at Mangaung. The conference declaration stated: “This phase will be characterised by decisive action to effect economic transformation and democratic consolidation, critical both to improve the quality of life of all South Africans and to promote national-building and social cohesion.”

Since then, the ANC has been short on detail on how it plans to engineer a radical economic shift. Radical economic transformation was weaved into the election messaging since the launch of the ANC’s manifesto in January, and was the main theme of President Jacob Zuma’s address at his inauguration last month.

On Sunday, the ANC held a media briefing to announce the outcome of a post-election lekgotla attended by its national executive committee (NEC) and leadership of the alliance. ANC secretary general Gwede Mantashe said the NEC wanted to move with “vigour and speed” to implement the commitments made in the election manifesto.

“The NEC lekgotla accepted that the election victory is a mandate for the ANC to implement the radical economic transformation as decided by the 53rd national conference,” Mantashe said. Asked if the ANC had worked out the specifics of this radical economic transformation, Mantashe replied it was a “South African sickness” to spend time on “conceptual clarity”.

“You can only talk of radical transformation if you implement radical programmes,” he said.

Nice little conundrum that is.

Thing is, if you ask Irvin Jim, the metalworkers union Numsa’s general secretary, or Julius Malema, the Economic Freedom Fighters leader, what they think constitutes radical economic transformation, they will immediately belt out a list of requirements, including the nationalisation of mines and redistribution of land without compensation. Ask anyone in the ANC what radical economic transformation is and you (and they) will get a headache.

The new Cabinet meets this week ahead of next week’s State of the Nation Address to work out the programme of action for the fifth administration. Perhaps details emerge from this meeting and the radical changes to existing programmes will then be announced by Zuma.

The problem though is that the ANC has been stuck in an economic policy quagmire for years, and through internal competing forces can never quite reach agreement. While the ANC has been able to forge broad consensus in society itself on the National Development Plan (NDP), for example, its alliance partners Cosatu and the South African Communist Party are still contesting the chapter on the economy.

An alliance summit last year resolved to set up a task team with all the partners represented to work through the disagreements on the NDP. The team has made no progress, partly because the ANC representatives did not bother to attend the first meeting, and Cosatu has subsequently been bogged down with its own internal battles. Mantashe said on Sunday that implementation of the NDP was going on irrespective, and that the ANC will continue to engage its allies of areas of disagreement. “We cannot sit back and wait until everyone is happy with NDP,” he said, delivering a not-so-subtle message to Cosatu.

It has become common for some people to talk interchangeably about the NDP and radical economic transformation – as if the one encompasses the other. There is also confusion as to which is the main mandate for government. The ANC lekgotla statement on Sunday stated that the election victory was a mandate to implement the radical economic transformation.

In a piece in Sunday Independent last week, ANC treasurer-general Zweli Mkhize wrote: “The major task of this Cabinet is to implement the foundation years of the National Development Plan… Zuma was elected on the basis of an election manifesto that emphasised the implementation of the NDP and building a strong economy.”

Business has rallied behind the NDP but has so far not expressed itself on radical economic transformation, probably in favour of holding out for further detail. In an opinion piece in Business Day, former policy advisor to Business Unity South Africa Raymond Parsons wrote: “The government needs to stay strongly on message that the NDP must be implemented now and provide tangible evidence of policy alignment. In particular, the business community wants to see policy coherence and a timetable for implementation. President Jacob Zuma is due to give a state of the nation address this month and he would do well to make the economy the centrepiece.”

So where would you go to look for clues on the radical economic transformation conundrum?

The Industrial Policy Action Plan (IPAP) produced by the Department of Trade and Industry provides the script – which for some reason is not yet being articulated. IPAP includes proposals to promote industrial growth and focuses on boosting the manufacturing sector through diversification. It also places emphasis on infrastructure development, encouraging the country’s massive infrastructure build programme to be a critical tool for industrial development. IPAP points to beneficiation, a sharper focus on regional integration and enhanced industrial financing.

At a media briefing in March, Minister of Trade and Industry Rob Davies said it was not a vision document but a three-year rolling action plan. “IPAP is not a policy document or action plan of the DTI, it’s of government as a whole, so we have to take it through government processes. We are ready to launch it at the appropriate time,” Davies said.

Perhaps that time is now.

Whether IPAP does contain the answers or not, government needs to move beyond the ANC’s rhetoric of radical economic transformation and provide proper direction through solid and actionable programmes. The country simply cannot sustain any further economic policy confusion while government has multiple balls in the air with plans and visions that are not being implemented.

The combination of poor economic performance, the protracted and damaging platinum strike and possible credit-ratings downgrades could have lasting negative effects on the economy if government does not provide immediate and decisive leadership.

Now more than ever before, as the political forces and the forces of economic reality are further apart than ever, "conceptual clarity" is not wishful thinking or something to dismiss as a joke. South Africa needs, demands, deserves to know in which direction the newly-elected government resolutely will take it. Our common future depends on it. Muddling along while trying to satisfy all the competing political demands will bog the economy only deeper.

Government has one week to get its house in order before Zuma delivers the State of the Nation Address. One week and then we want the details. DM

Photo: ANC Secretary General Gwede Mantashe at the press conference on Sunday, 8 June 2014 (Greg Nicolson)

  • Ranjeni Munusamy
  • South Africa


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