South Africa, #ANCdecides2017

ANC Leadership Race: policy Explainer 1 – Factional proxy battles play out in proposals

By Marianne Merten 13 December 2017

Policy appears to be on the back burner in an ANC national elective conference more focused on a leadership contest many regard as the battle for its heart and soul – and 2019 election prospects. Policy decisions in many ways are enmeshed in these factional machinations which in their current fluidity stubbornly refuse to settle the power balance. Much is at stake in this game of proxy battles by policy – for the ANC and for South Africa. By MARIANNE MERTEN.

On (white) monopoly capital

Traditionally, the ANC is anti-monopoly capital. Full stop. Of course, the ANC has always argued that in South Africa, because of apartheid and colonialism, monopoly capital overwhelmingly takes the form of being white and male.

But in the highly factionalised machinations towards this ANC national elective conference, white monopoly capital (WMC) has become populist shorthand to explain the ongoing inequality and poverty of black South Africans within the narrative of: yes, there is political freedom since 1994, but not economic freedom. And so the ANC’s enemy of monopoly capital morphed in some circles into WMC, i.e. monopoly capital represented by whites. Full stop.

As the #GuptaLeaks and State Capture revelations are unearthing a picture of the state at various levels and particularly State-owned Entities (SoEs), being used to enrich a select elite, WMC has become the term of choice to hit back and shift blame, particularly on social media. The Steinhoff disaster and Naspers MultiChoice DStv debacle have galvanised the WMC rhetoric.

Discussions at the July policy conference were heated to say the least, but in the factional proxy battles on the policy front the view prevailed that “our (ANC’s) attitude to monopoly capital applies across the board, irrespective of the colour of the owners of such capital, including institutional and other entities”, according to that gathering’s final report. “We should avoid conflating the concept of monopoly capital with the inescapable reality of white dominance in the economy in terms of assets, income, management and the professions.”

It was a hard-won victory, but one that may yet again be reversed next week, depending on the heady mix of policy and leadership contests.

On radical economic transformation (RET)

The buzzword for months now, radical economic transformation is intricately linked to the factional ANC battles. Among the two party presidential frontrunners, Nkosazana Dlamini Zuma publicly endorsed RET without setting out what it would entail precisely, while Cyril Ramaphosa has argued that his “New Deal” would lead to the social pact required to bring about radical and inclusive transformation. In the factional battles, Ramaphosa is accused of acting as a lone wolf stepping out of the ANC policy frameworks. He’s dismissed that: “My 10 priorities are priorities that give life, substance and meaning to radical economic transformation,” he recently told the Parliamentary Press Gallery Association.

Radicality” in policy emerged broadly at the 2012 Mangaung ANC national conference, where delegates resolved on “more radical” policies in the second phase in the transition from apartheid colonialism to a national democratic society. That second phase would be “characterised by more radical policies and decisive action to effect thoroughgoing socio-economic and continued democratic transformation”, the conference resolved, emphasising this would require “a renewed, united and more vibrant ANC, the alliance and broad democratic forces”.

Five years earlier at Polokwane the ANC national conference resolutions simply talked of “decisive action… to thoroughly and urgently transform the economic patterns of the present in order to realise our vision for the future. This includes addressing the monopoly domination of our economy, which remains an obstacle to the goals of economic transformation, growth and development.”

But by 2017 the radical and RET had moved centre-stage with a definition adopted by the January ANC lekgotla as the “fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female”.

Discussions at the July ANC policy conference fleshed this out to stipulate a change away from South Africa being an exporter of raw materials to one which benefits raw materials (both minerals and agriculture) with an enhanced manufacturing sector. Unclear remains the extent of scrutiny of existing government policies, including broad-based black economic empowerment, employment equity, the manufacturing investment incentives under the Industrial Policy Action Plan (IPAP).

But according to the policy conference’s final report, RET was “more than just the various elements of broad-based black economic empowerment, and should address such issues as changing the structure of the economy, dealing with spatial disadvantages suffered by the poor, worker share-ownership, patriarchal relations and so on”.

And RET “ is therefore not aimed at benefiting a small elite”, the report said in a nod to the recognition among many, even if perhaps not all delegates, of the impact of State Capture revelations. Instead RET relied on a capable developmental state.

On that developmental state

A state that is capable, developmental and plays a key role in transforming lives has been the mainstay of ANC policy for well over a decade. It is speckled throughout the policy documents. In economic transformation it is key to anti-corruption. In social transformation it is key to building social cohesion. In legislature and governance it is key to an effective and efficient state administration. And in the ANC’s views of its organisation it is key to the credibility of the former liberation movement now in charge of democratic South Africa.

But the ANC-led government has taken major hits. And not only with the State Capture revelations from the #GuptaLeaks, the financial and governance turmoil at major State-owned Entities (SoEs), but also in arbitration hearings into the Life Esidimeni tragedy, which left over 140 mentally ill patients dead in a hurried relocation of often unlicensed institutions as part of cost-cutting measures. And amid repeat successful challenges to presidential appointments in key institutions, like the National Prosecuting Authority (NPA), crucial state institutions have been criticised for being hollowed out for politically motivated reasons.

The ANC is painfully aware of this. “… (S)trengthening the ethical fibre of the state is critical not only to ensure its (the state’s) effectiveness, but also to enhance its legitimacy in the eyes of society. This requires us to continually build and institutionalise the integrity, transparency, accountability and responsiveness of the state machinery,” according to July’s policy conference discussions.

On SoEs specifically, policy proposals up for finalisation and adoption next week highlight required “firm action” to improve performance, ensure skilled staff and qualified board members are appointed while interference particularly in tenders and appointments should stop.

As an immediate measure to boost confidence and to show our serious intent to address matters of State Capture and corruption including collusion, the state should immediately desist from contractual and commercial commitments with companies and families involved in such activities,” according to the final report on the July policy conference.

A corruption-free, effective developmental state was “imperative if we are to build a more equal and prosperous society”, according to the policy indaba final report. The words sound good, and they dovetail with South Africa’s official domestic blueprint, the National Development Plan (NDP). But this is undermined by what often is on public view from a shoddy financial management and governance track record in official office, “I didn’t know” attitudes, to court cases. Will this make-or-break ANC national elective conference resolve such inherent contradictions?

On governance and legislature

Policy proposals for the ANC to develop “strategies for coalition politics and being an opposition” acknowledge the electoral reality of waning support at the ballot box, so starkly hit home in the 2016 municipal poll when the ANC lost the administrative capital Tshwane, the national economic hub of Johannesburg and the Eastern Cape’s economic heartland of Nelson Mandela Bay Metro while only just clinging on to Ekurhuleni through a coalition deal.

There are other significant planned changes amid an emphasis on accountability and consequence management. This includes a constitutional amendment proposal for the ANC National Executive Committee (NEC), its highest decision-making body between national conferences, to appoint and “un-appoint” elected public representatives.

Traditional leaders, who have their own national and provincial Houses, have made a play for formal inclusion in the National Council of Provinces (NCOP), the House which must bring provincial interests, concerns and mandates to the legislative process when laws directly impact on provinces. The role of traditional leaders, particularly in land use rights, is set to come under scrutiny after they alerted the ANC to dissatisfaction over, among others, legislation on spatial land use and the opt-out clause in the Traditional Courts Bill, significantly redrafted in months of painstaking consultations to ensure traditional courts do not amount to an (unconstitutional) second judicial system for rural residents.

And while the South African Local Government Association (Salga) already has representation in the NCOP — there has been criticism over its rather consistent absence aside from Big Days like the president’s annual address – it has requested voting rights, effectively making it a 10th province. This, of course, would require a constitutional amendment.

Also requiring a constitutional amendment, if adopted next week, is a proposal to establish a Speaker of (the entire) Parliament, an overarching administrative and co-ordinating post above the presiding officers of the National Assembly and NCOP. Currently, the Speaker heads the National Assembly and the Chairperson the NCOP.

There is also a push to institutionalise the office of the Chief Whip with “a dual reporting role” to the ANC and to the legislature.

One of the policy proposals discussed in July on making the presidency “the strategic centre of governance”, colloquially dubbed a super presidency, appears to be well on its way – even in the absence of a relevant ANC policy resolution. President Jacob Zuma recently established the presidential fiscal committee, to step into the budgeting process that for decades has been run by a committee of ministers, supported by a technical team. And the Minister in the Presidency has implemented a mandate paper to outline budgeting priorities, which previously were directly linked to ANC policy and election manifestos, tailored to available cash in the national purse.

On land

The national conference will have to resolve on two options presented following the policy conference discussions, again reflecting the factions within the governing party.

Land expropriation without compensation, associated with the RET faction associated with the Dlamini Zuma campaign supported by the women’s and youth leagues, could be on the cards. Or it could be the alternate proposal to use the currently existing instruments to speed up and more effectively and efficiently implement land-related measures.

Land, its ownership, restitution and as instrument of economic empowerment, is an emotional issue – and one that goes to the heart of redress in democratic South Africa. But it is also a matter which illustrates many of the failures of the much-touted developmental, capable state.

The ANC government has missed its self-set deadline to bring on to the statute books the Expropriation Bill, a law of general application to allow expropriation in the public interest and for the public purpose as outlined in Section 25 of the Constitution. That Bill has been in the making since 2007, and the first draft law was tabled in Parliament in 2008 after the Polokwane national conference resolved on ditching the willing buyer, willing seller principle. That Bill was withdrawn and tabled again in 2015. It was passed by Parliament in May 2016 but returned to the national legislature by President Jacob Zuma over concerns of there not being enough public consultation. The process was meant to be completed by the end of December 2017, according to various public government statements. It isn’t.

And so there is a cloud of impotency over the ANC policy proposal up for adoption next week for the implementation of the Expropriation Bill to be speeded up.

On nationalising the South African Reserve Bank (SARB)

The proposal to nationalise the SARB by buying out the 650 or so private shareholders, but maintain the bank’s independence, was a surprise development in July’s superheated factionalised policy discussions.

It dovetailed Public Protector Busisiwe Mkhwebane’s ill-fated proposed constitutional amendment to change the mandate of the Reserve Bank in her report on the apartheid-era Bankorp bailout in late June. But the courts on 1 August declared invalid the proposed constitutional amendment amid scathing criticism of Mkhwebane. She had instructed Parliament’s justice committee chairperson to table a motion to amend Section 224 of the Constitution to broaden the bank’s mandate to “promoting balanced and sustainable economic growth and ensuring that the socio-economic well-being of the citizens are protected”. The second part of the challenge against the Public Protector’s report – discussed in meetings with both the presidency and State Security, according to court documents – continues to play out in the courts.

Strictly speaking, on paper, there’s no issue with nationalising the SARB. There are plenty of government-owned central banks. England nationalised its central bank in 1946, and since 1998 the Bank of England is run as an independent public organisation by the Treasurer-Solicitor on behalf of government, setting monetary policy, maintaining stability, regulating other banks and issuing legal tender. The US Federal Reserve, whose board of governors is appointed by the president, is an agency of the federal government, yet independent because the monetary policy it sets does not need presidential approval, while its other responsibilities also include regulating other banks.

But in South Africa’s highly factionalised political machinations of the governing ANC in these days of State Capture, there are many misgivings both within and outside the ANC. And buying out the private shareholders would require dipping into the national purse, stretched due to multibillion-rand bailouts to the ailing SAA and what the Medium-Term Budget Policy Statement said was an anticipated R50.8-billion tax under-collection by the South African Revenue Service (SARS). DM

Original photo: A woman walks past a giant ruling party poster on the eve of the 53rd ANC conference that began in Mangaung on 16 December, 2012. Photo: EPA/Kim Ludbrook

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