How Zuma persuaded ANC to drop the ‘N’ word

THE African National Congress (ANC) has ditched the concept of "strategic nationalisation" in favour of "strategic state ownership" after an 11th-hour intervention by President Jacob Zuma.

He told the drafters of the party’s economic policy resolution at its conference in Mangaung to remove the word "nationalisation" — a bold effort to restore policy certainty for investors and turn around South Africa’s flagging credit ratings.

An attempt by the ANC Youth League to have the word reinstated when the resolution was presented to conference delegates on Thursday, failed.

"The state will increase state ownership in strategic sectors where deemed appropriate, on the balance of evidence ," the resolution read.

The state would further increase its participation in the mining sector through equity, using the state-owned mining company as its vehicle.

The resolution implied that there will be higher taxes for the mining industry, but did not specify what form these might take. It said the state should "capture an equitable share of mineral resource rents and deploy them in the interests of long-term economic growth, development and transformation".

Enoch Godongwana, chairman of the ANC’s economic transformation committee, told a media briefing this could take the form a resource rent tax, a "windfall tax" on super profits or another, unspecified, measure. "There will be a tax, what form it will take has not been decided."

The resolution further raised the prospect of export taxes on designated "strategic minerals" deemed important for industrialisation or as key inputs into downstream products. Among those in line for designation are iron ore, coal, base metals and gas.

The party said it wanted to assure investors that "nationalisation was off the table".

"The national conference has refused to be drawn into the (use of) the word nationalisation," said Public Enterprises Minister Malusi Gigaba. "This means that the issue of nationalisation, that we have discussed over the past few months, is off the table.

"We are providing final clarity. There shouldn’t be any expectation from here that we will come out and say we are going to nationalise."

Mr Zuma called the drafters of the resolution — who included Thaba Mufamadi, chairman of Parliament’s standing committee on finance, Mr Godongwana and Mr Gigaba — to an early morning meeting on Thursday. Participants close to the process said the president told them they should take out "that word".

Provincial chairpersons and secretaries were hurriedly briefed before the presentation to the plenary on Thursday and asked to support the resolution.

But global rating agencies are likely to continue sitting on the fence for a while in terms of their assessment of South Africa.

Standard & Poor’s (S&P) MD for Southern Africa Konrad Reuss said on Thursday the agency would wait to see what follow-through action the government took before revisiting its sovereign rating of South Africa, which it downgraded in October. "From our perspective the jury is out — we have to see what it is that is going to be implemented as far as policy action is concerned ."

Anything that would support growth in the economy, deal with social and labour market issues, and support fiscal consolidation, would be constructive for South Africa’s rating, Mr Reuss said.

S&P has put a negative outlook on its BBB credit rating for South Africa, citing the recent wave of strikes, which it said might increase "uncertainties" related to the country’s economic policy framework.

The Black Business Council (BBC) said it was "relieved" that the ANC had "once and for all buried the threat" of the wholesale nationalisation of mines and banks. "The BBC believes the ANC should better manage the perceptions around its economic policy choices and reaffirm the private sector as the appropriate agent for accelerated economic growth and employment creation."

The council believed the role of the state should be to create conducive conditions for good and socially responsible business.

MD of Pan African Investment and Research Iraj Abedian, said the ANC’s economic policy resolution was " more of the same".

"The ANC has always engaged in rigorous, left-sounding debate, or more recently, populist oriented, but when all is said and done there are fairly pragmatic and realistic policy choices ."

The ANC further resolved that there would be no ban on labour brokers. The South African Chamber of Commerce and Industry welcomed the resolution.

" One must take it as an appreciation by the ANC that labour broking has a role to play in job creation," CE Neren Rau said.

"On the issue of nationalisation, it’s good that this has been clarified. It will be positively received by the international community."

Source: BD Live

Accountability

Zuma helped our democracy pass a crucial test this week

By Steven Friedman

DESPITE the hand-wringing in much of our national debate, our democracy is in much better shape than many people imagine. That is the message of this week’s Cabinet reshuffle and the announcements that accompanied it.




The firing of two ministers and the suspension of the national police commissioner are important steps forward for democracy, which may make it easier to fight corruption. They also highlight flaws in the way many of us understand our politics.




Three ways in which President Jacob Zuma ’s announcements are being analysed all say something important about how not to understand our current condition.




First, some cling doggedly to the stock explanation for anything Zuma or the government does — that it must aim to influence the African National Congress (ANC) leadership election in Mangaung next year.



When Zuma announced an inquiry into the arms deal, or promised to release the Donen report on oil-for-food transactions, we were bombarded with analysis explaining how this was all about strengthening his position and weakening his enemies. This was despite the fact that, in both cases, a much more obvious explanation was available: the government faced court action and may have decided to deflect it. That this was what was happening seems now to be confirmed — the arms deal inquiry will last two years, and so it cannot be used to influence a leadership election only 15 months away.




Nor is there any clear link between the reshuffle and the ANC election. Despite Zuma’s usual attempt to ensure that every faction has been accommodated, none of the changes seems likely to help him.



It remains a mystery why he insists on playing musical chairs with some of his ministers, but it is hard to see how doing this aims to get him re-elected.




ANC presidential politics are important. But they — and the ANC — are not the only political game in town. There are many other factors in our democracy that shape what the government does: citizens’ groups, the media, public opinion and the institutions set up by the constitution. The obsession that everything the government does must be linked to Mangaung ignores the many forces with the power to shape our society.




The reshuffle and the other announcements responded to pressures from society and the institutions — they were not an attempt to influence Mangaung.




While most of this response was positive, some may be less so: a two-year commission may be used to deflect pressure on the arms deal. But they are reminders that we need to take all the forces that shape our democracy seriously and not project all our anxieties onto the majority party.




Second, some reduce what happened to a debate on the virtues and vices of the president. They are divided between those who wax lyrical about his statesmanship and those who grumble that he could have done more, sooner. This repeats another of our fallacies — the obsession with "leadership" and the belief that our future depends entirely on the merits or otherwise of the people in political office.




Zuma did not "do the right thing", to use the public protector’s phrase, because he is a fearless fighter against corruption. If he was, he would have acted far sooner and he and his colleagues would have made it clear that the ministers acted improperly and that the commissioner may have done the same.




It was not easy for him to act: he is of that generation of ANC leaders that is used to showing loyalty to each other in the face of external attack. He is rooted in the politics that allows figures such as Winnie Madikizela-Mandela and Manto Tshabalala- Msimang to win large shares of the vote at ANC elections because they ran afoul of the media or the courts, even though few in the ANC thought they should be leaders.




Zuma has also packed the government’s security cluster with allies from his home province — police commissioner Bheki Cele is one. Until now, members of this inner circle have been guaranteed their positions, whatever else changes in the government.




And so it must have been particularly hard to suspend — and perhaps jettison — Cele.



Zuma acted, then, not because he wanted to but because he was convinced that he needed to act.




But why should this matter?




The issue is not whether Zuma is "good" or "bad". It is that the system worked. That it did so in the face of presidential reluctance makes what happened on Monday more, not less, momentous: it may show that some democratic principles are becoming so ingrained that a president who would have preferred to stand by his colleagues felt he could not.




If constitutional government is indeed taking root, that is far more important than the qualities of the president.




The second lesson, then, is that we need to base our assessment of how the country is doing on whether democracy is taking root, not on whether we have found a super hero to lead us.




Third, there is the "take it for granted" brigade for whom no democratic advance is good enough because we don’t look like an idealised version of western Europe.




Nothing much has changed, they insist, because Zuma did only what he was forced to do and he did not root out every single vestige of corruption.




But the government did not have to do this. Legally, it could ignore the public protector’s reports or denounce them as smears. The ANC would still have won the next election if it did that. That the government listened despite this was remarkable.




There is nothing automatic in any society about the idea that political office-holders should listen to public protectors or, indeed, public opinion.




If this accountability is achieved at all, it requires trials of strength between the political power-holders and those who hold them to account. Any new precedent that makes the government account is a step forward, even if the gain is limited. That a reluctant government with a secure majority agreed to be held to account is a huge step forward for democracy and accountability, even if it did it so half-heartedly.




The public protector clearly understands the limits of her office better than most commentators. Thuli Madonsela is our most active public protector yet and she understood that there was nothing automatic about the accountability her office is meant to instil. She seems to have concluded — accurately — that her only credible weapon was public opinion. Through road shows and media briefings, she galvanised the citizenry — or those sections able to make politicians take notice — and this must have played a key role in Zuma’s decision.




So the third lesson is that democracy does not spring fully formed from a new constitution. It will always be tested as power- holders try to remain as unaccountable as possible and, each time we pass a test, democracy is more secure.




For all the imperfections of Zuma’s announcements, our democracy has passed an important test and this will make it more difficult in future for people in high places to abuse public trust.




Much work remains to be done if democracy is to take root and the government is to account to citizens. But this week’s presidential decisions have made the task more than a little easier.




• Friedman is director of the Centre for the Study of Democracy.