President Cyril Ramaphosa effectively kissed the RET, or radical economic transformation campaign of the ANC’s fightback faction goodbye at the weekend. Instead, the ANC has affirmed a growth-led year for the governing party.
“Our overall priority is economic growth,” said the party’s Secretary-General Ace Magashule at a party briefing on Wednesday, 22 January 2020 at its Luthuli House headquarters.
The World Bank has lowered its forecast for growth in South Africa to 0.9% for 2020 while the International Monetary Fund (IMF), has it pegged even lower at 0.8%. This has stopped the party’s egg-dance between RET and the more conventional stimulus plan Ramaphosa favours.
The RET campaign is that of the party’s so-called fightback faction and it pivots on policy positions such as the nationalisation of the SA Reserve Bank (SARB), radical land expropriation without compensation, nuclear being a significant part of the energy mix and on cadre deployment.
Instead, Magashule put meat on the bones of Ramaphosa’s concluding remarks to the party’s annual planning lekgotla, which was televised live so the president could speak to the public and ensure that the secretary-general could not put his RET spin on matters. In June 2019, Magashule snuffed out growth prospects when he prioritised a change to the SARB mandate by the governing party. It wasn’t true, but it led to the damage of growth prospects now writ large in the IMF, World Bank and other projections.
So, the ANC has now decided on a growth-led model that reflects Ramaphosa’s governing agenda of reform and stimulus. The party has identified the 25 key state-owned companies and development finance institutions, which are vital to what it calls the country’s “developmental mandate”. The rest of the 700-odd parastatals face consolidation. (Before you get excited, the ANC has pledged this consolidation of its suite of state-owned entities for well over a decade.)
Ramaphosa chose not to attend the Davos World Economic Forum, or the United Kingdom’s big Africa summit this week and instead, he stayed home to get the ANC to agree to support an agenda that is his. The party has again pledged itself to support his set of economic priorities: to release spectrum to bring down the cost of data (almost two years old); the easing of visas to bring in more tourists (some countries now have visa-free access); easier access for skilled immigrants (promised for over a decade but not achieved); energy security and fast-tracked gas, clean coal and renewables licences; and strengthened BEE by way of 30% set-asides and localisation regulations. None of these is new.
What is new is the party’s mantra on the need for fit-for-purpose leaders, which is read as waning support for cadre deployment where only loyalists are given top state jobs. Competence was required, said Magashule, and performance management systems are going to be put in place for local government. (Again, before you get excited, the government made the same promise in the national development plan launched almost eight years ago.)
Land expropriation without compensation put into process
Government has passed amendments to Section 25 of the Constitution to make land expropriation more explicit than it has been. In addition, it sets out a long process that must be followed before the land is expropriated and it allows for zero compensation as legitimate in certain instances. The ANC will campaign for public support of the amendments.
What Ramaphosa has done here is take the land debate out of the realm of rhetoric and into the constitutional process. It’s not popular, but neither is it populist. The ANC has bought into this process, leaving the EFF isolated in its positioning around expropriation as a political bogey.
Dlamini-Zuma becomes a prime minister type figure
As the ANC heads toward the 2021 local government election, Nkosazana Dlamini-Zuma, the minister of the impossibly titled co-operative governance and traditional affairs department, is going to get more important.
It hasn’t got a lot of airtime, but the model of district development that she is piloting was moved to the top of the ANC agenda at the weekend. The Khawuleza, or district model, is a complete overhaul of how local government works: It has divided the country into 42 district municipalities and seven metros to try to fix local government. Currently, the impossible-to-manage system of 287 local municipalities is the governing party’s Achilles heel. Dlamini-Zuma and the national Cabinet, and executive now have far greater rights to intervene in municipalities and budgets are being aligned to suit the new model.
Will it work? The ANC’s recent history is a litter of failed local government strategies, but Dlamini-Zuma has gathered a good team around her. “The district model allows us to work together. People don’t experience life in silos,” she said at the press conference.
SAA will remain a national airline
While it may look as if SAA is in its death throes as the airline cancels flights and operates from day to day, the ANC has decided that “SAA should be retained as a national airline”. The party views a national carrier as part of national identity and it believes South Africa will be diminished without a flag carrier.
But the chairperson of the party’s economic transformation committee, Enoch Godongwana, said the party supported the reorganisation and restructuring of the airline. SAA is now likely to become a small and insignificant national carrier (and at best, a regional carrier), without the global aspirations it once had to be a leading emerging market player.
Is that it for the fightback?
No, not at all, but what it does signify is that Ramaphosa still has the upper hand and a majority in the party’s national executive committee. For now, his strategy of building party unity and securing buy-in to his agenda has worked. Not one of the leaked narratives of Minister of Public Enterprises Pravin Gordhan being axed or of Eskom’s political authority being moved turned out to be true. As Carien du Plessis reported in Daily Maverick, two RET personalities, Mosebenzi Zwane and Bongani Bongo, tried to raise Gordhan as an issue, but they did not succeed. Magashule and all the speakers at the ANC press conference would not take questions on individuals and they stayed close to the clear plan to ensure that the plan to make last week’s party lekgotla a show of unity succeeded. DM