South Africa

South Africa

ANC NEC & Lekgotla: Never mind the factional poetics, focus on the economy

ANC NEC & Lekgotla: Never mind the factional poetics, focus on the economy

The ANC mid-year lekgotla after Thursday’s one-day National Executive Committee (NEC) comes some two weeks after its national policy conference, where unity was touted the winner despite internal fractures. It also comes in the wake of persistent, economic turmoil. It’s a key moment in troubling times. With the governing ANC sticking to its economic policy path that seems to meander in the gloom, the question remains whether it can change gear in the interest of South Africa? Or will it be kicking for touch until after the December elective national conference in the hope of a breather in internal political tumult of factional jockeying for leadership? By MARIANNE MERTEN.

The ANC lekgotla, a traditional assessment by the governing party of how its policies are implemented in government, is extended to include mayors, premiers and cadres deployed to government and state-owned entities (SOEs). “If you have any programme to transform, the people dealing with implementation must understand this and have an opportunity to give input,” said ANC national spokesperson Zizi Kodwa.

While the lekgotla agenda would only be finalised by the NEC, according to Kodwa, the economic situation and “how to mitigate” that is set to dominate, given the technical recession, ratings downgrades and ructions in sectors like mining.

And that is a key question, particularly as the mid-year ANC lekgotla  feeds into the government processes leading up to October’s Medium-term Budget Policy Statement (MTBPS), or the “mini-budget” that signals government spending priorities for the next year, in the same vein as the ANC’s January lekgotla relates to February’s Budget.

Little new thinking on how to address the persistent economic turbulence emerged at the ANC national policy conference, where much factional verbiage was spent on (white) monopoly capital and the need for land redistribution with or without compensation to speed up land reform. Any decision on a firm policy recommendation on these issues was effectively postponed to the ANC December elective national conference; the policy conference report, unusually, is set to reflect both positions so branches could discuss further.

On the government front, there is also little new emerging from ANC ministers on how to deal with the economic troubles amid the rhetoric of radical socio-economic transformation, or radical economic transformation – depending on factional preferences.

And so an apparent tit-for-tat turf war has emerged between the Chamber of Mines, representing mining houses, and Mineral Resources Minister Mosebenzi Zwane over the Mining Charter. Withdrawn from implementation pending a court challenge over a lack of consultation and other issues, the minister hit back with a proposed ban on approving new mining and prospecting licences, now also subject to a court challenge. Meanwhile, the mining sector is shedding jobs.

Meanwhile, the significance of State Capture on public sector infrastructure spending emerged when Statistics SA on Wednesday released its report “Capital expenditure by the public sector, 2016”.

While the increase in spending by some R18-billion to just over R283-billion in 2016, from R265-billion in 2015 might seem like a government good news story in a gloomy environment – President Jacob Zuma’s administration has touted its infrastructure delivery programme as one of its achievements – the key drivers of this spending were state entities.

Leading the R138-billion infrastructure expenditure of 2016 were Eskom (R73-billion), Transnet (R34-billion) and the Passenger Railways Authority of South Africa (R6.1-billion). Those, of course, are the SOEs firmly under the spotlight of the #GuptaLeaks, which outline connections between the Gupta family, its businesses and associates, senior officials and links to identified politicians.

Statistician-General Pali Lehohla was diplomatic when asked about quantifying the impact of #GuptaLeaks. “Unfortunately, we don’t look at what are in the leaks. We are looking at what is said to be spent and on what. That’s all,” he said. “The issues are not the ones answered by the statistician-general, only by the auditor-general and all other compliance institutions of the state.”

The ANC’s dilly-dallying on matters economic also emerges elsewhere amid gloomy economic indicators, including stubbornly high unemployment that in June increased to 27.7% on the narrow definition of those too discouraged to even bother looking for work. It stands at 36.4% on the expanded definition that includes those still actively looking for work, according to Statistics SA’s Quarterly Labour Force Survey, which also showed youth unemployment rose to 58% among those aged 15 to 34.

When Finance Minister Malusi Gigaba earlier this month finally released what has been touted as a plan for growth, economists and commentators panned the 14 Point Action Plan. While the tabulation of deliverables with deadlines perhaps was meant to portray a sense of concrete action, closer scrutiny shows neither are necessarily new. For example, the finalisation of the Mineral and Petroleum Resources Development Amendment Bill by year-end according to the 14 Point Plan, is long overdue. Zuma returned the draft law to Parliament in January 2015 and in the 2017 State of the Nation Address (SONA) said the Bill would be finalised in June.

Some deliverables are curious. Public Enterprise Minister Lynne Brown earlier this year told Parliament’s public enterprises committee she is drafting the Shareholder Management Bill, to amend the governance and other issues at SOEs, following Cabinet’s approval of a concept document in March. But Gigaba’s list of targets and deadlines put the public service and administration minister in charge of this.

And some deadlines are also curious. The five-year turn-around plan for SAA must be finalised and implemented by December 2019, according to the plan. But the drain on the national coffers is steep, given that the national airline last month received an effective bail-out of R2,2-billion from the National Revenue Fund so it could repay loans that had become due and which it failed to renegotiate. That National Revenue Fund effectively is the monies allocated to departments to do their work, and now the R2,2-billion spent on SAA must now be somehow recouped, through departmental savings or government selling off non-strategic assets like, for example, its shares in Telkom.

But at Monday’s Organisation for Economic Co-operation and Development (OECD) launch of South Africa’s 2017 economic survey Gigaba touted the 14 Point Action Plan as the answer to what he acknowledged was “disappointing” growth, weak consumer demand and “persistently falling business investment”. The plan, he said, “has strong support from the president and Cabinet to address the challenges of slow domestic growth. The Action Plan aims to accelerate progress, coordinate government efforts and act as a mechanism for accountability; and it has realistic, achievable objectives set against realistic and firm timelines”.

Last week South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced an interest rate cut of 25 basis points – commercial banks’ prime lending rates dropped to 10.25% from 10.50% – in an effort to assist the economy. “Underlying demand in the economy is extremely weak and the MPC (Monetary Policy Committee) is concerned about the deterioration in the growth outlook over the forecast period. This decline is broad-based. It is unclear where the drivers of accelerated growth will come from in the absence of credible structural policy initiatives that will reduce uncertainty and increase business and consumer confidence,” he said at the time.

It is a message the extended ANC lekgotla may do well to heed, even amid the current party political power battles ahead of the elective national conference in five months. Whether the gathering of party seniors, its political leadership across the three spheres of state and its deployed cadres will consider any of such details, rather than focus on analysing the challenges (again) and on telling the good story, is up in the air. DM

Photo: ANC Deputy Secretary General Jessie Duarte and Secretary General Gwede Mantashe at the Policy Conference, 5 July 2017, Nasrec (Photo: Ihsaan Haffejee)


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