Ryk van Niekerk
4 minute read
28 Jun 2017
7:44 am

Zuma is SA’s economic policy

Ryk van Niekerk

ANC’s economic transformation document not bad, but irrelevant.

Don’t expect the 3 000 delegates at the ANC’s upcoming policy conference to focus their energies on policy, especially economic policy.

The conference will be the battleground for another skirmish in the leadership race and there will be little debate about what needs to happen to get South Africa out of our current mess.

It is almost a pity, as the proposed Economic Transformation Discussion Document the ANC published in March, which should form the basis of next week’s policy conference, is not bad.

This 20-page document actually contains some very good policy ideas that, if properly implemented, would drive economic growth.

It contains virtually none of the populist rhetoric President Jacob Zuma has been bellowing from various podiums in recent months. After all this is just a smoke screen to the Zupta looting. His and other politician’s statements on white monopoly capital and radical land reform, among other topics, has scared off local and international investors on an unprecedented scale.

The document, which is rational and contains policy proposals that will help ensure increased economic growth for all South Africans, was published on March 10. This was before President Jacob Zuma fired Pravin Gordan and before the various scandals emerged in #Guptaleaks.

Most notably, the policy document contains countless calls for all policy uncertainty to be removed. It states:

“Policy certainty is key for long-term investment. Concerted efforts are required at eliminating policy uncertainties unwarranted regulatory hurdles. Government should conduct an audit of the policy and regulatory constraints to investment and set a clear timeframe for addressing them, linked to ministers’ performance contracts.

… In the immediate term, investor confidence will be boosted if the rising national debt is brought under control, if South Africa maintains its investment-grade credit rating, if good governance of state-owned enterprises is achieved, if international norms and standard are maintained with regard to the regulation of the financial sector and other sectors.”

The document also states:” Effective economic leadership requires that confidence be built both among ordinary South Africans as well as among South African and foreign investors. The multiplier effects of government and public-sector infrastructure investments will increase as investor confidence in the economy rises. More private sector investment will be stimulated, or crowded-in, by government and public-sector infrastructure investment, as well as public-private partnerships, if confidence-building measures are prioritised.”

Chain of events

I doubt whether Zuma had read or signed off on this document.

On the contrary, he seemed to have gone out of his way to do the exact opposite – both in words and in deeds. In public he voiced very populist views that are not contained in the document, while his actions spoke louder.

The most notable action was when he recalled Gordhan from an international investor roadshow and fired him a few days later. This of course set in motion a chain of events that saw SA’s credit rating being slashed, investor confidence levels dropping, employment numbers hitting record lows and South Africa entering a possible protracted recession.

In between all of this the #Guptaleaks surfaced revealing the scale of the corrupt network Zuma, his cronies in government and his adopted Saxonwold family have established.

Actual economic debate

Within the political context, this noble policy document is worthless. I am sure all the ANC leaders who encircled Zuma during the last ANC NEC meeting to fight off a vote of no confidence also know this.

They also know Zuma himself is the ANC’s economic policy.

The actual economic debate is therefore the succession debate. Zuma’s successor will hold the power to either return to the actual policy document, or continue on the current trajectory.

The best we can hope for from this policy conference is that Cyril Ramaphosa hammers in a proper stake in the ground as presidential candidate and that he doesn’t retreat into the peripheral shadows as he has done on many previous occasions.

It is also critical that other anti-Zuma candidates unite their fragmented support bases behind him, as he is probably the only ANC leader who can quickly reverse the damage Zuma has done.

It would also be telling to see what Dr Nkosasana Dlamini Zuma’s position is, and to gauge her level of support.

So even if we hear the ANC platitudes of “we will work towards policy certainty”, “we will work with the private sector to rebuild confidence” and “we will interact with rating agencies to regain investment status” it will be as irrelevant as the discussion document itself.

‘Second phase of the transition’

Lastly, it is interesting to note how the ANC’s language – possibly with the help of Bell Pottinger – has changed in a short five years.  The ANC adopted the following resolution in 2012 during the elective conference in Mangaung:

“We are boldly entering the second phase of the transition from apartheid colonialism to a national democratic society. 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 nation-building and social cohesion.” 

Not a single promise contained in this paragraph materialised. In fact, South Africa is much worse off in every single instance.

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