Business

Marikana weighs heavily on ANC's economic outlook

Lynley Donnelly

The events of Marikana have renewed pressure on the ANC's leadership to secure more radical change in terms of economic policy in Mangaung.

It remains to be seen whether the party can reach enough consensus to endorse meaningful economic policy not obscured by leadership battles. (Delwyn Verasamy, M&G)

Statements from both ANC secretary general Gwede Mantashe and the head of the party's economic transformation committee, Enoch Godongwana, suggest that there is likely to be renewed emphasis on the issue of inequality and a more equitable distribution of the wealth generated by key sectors of the economy, such as the minerals sector. As a result, economic policy recommendations such as the extent of state involvement in the minerals sector could be re-examined.

Godongwana told Bloomberg news that unless radical transformation took place, South Africa would face revolution. Mantashe, meanwhile, said in the Sunday Times that economic transformation, not leadership battles, would be the focus of the conference.

Although high-level discussions between the ANC and the mining industry were held following the party's mid-year policy conference, there is concern that the Marikana massacre undermined what was initially positive, if rather open-ended, talks.

It remains to be seen whether the party can reach enough consensus to endorse meaningful economic policy not obscured by leadership battles.

Raymond Parsons, special policy adviser to Business Unity South Africa, said this week that the Marikana massacre and its aftermath would "weigh heavily with Mangaung delegates".

But the decisions taken cannot be divorced from the wider global and domestic economic challenges being faced by the country.

Inordinately vulnerable
The conference is crucial for securing policy certainty at a time when global and domestic factors are having a negative affect on South Africa's economic performance, a situation that needs to be addressed at political level.

South Africa's economic statistics reveal the extent of these troubles, which have been exacerbated by poor policy direction. This week, the quarterly employment survey, released by Statistics South Africa, revealed that about 15 000 jobs were lost owing to labour unrest in the mining sector.

The country's gross domestic product growth has slowed to a mere 1.2%, whereas its current account deficit sits at a stubbornly wide 6.4%. This deficit is financed by foreign money. As analysts and economists have pointed out, it leaves South Africa's economy inordinately vulnerable to foreign-investor sentiment.

To deal with South Africa's pressing socioeconomic challenges, said Parsons, the conference had to take key decisions to boost the investor confidence needed to underpin higher growth and employment.  

The ANC needed to decide whether more radical policy proposals would do the trick, he said.

The national development plan launched by the national planning commission has provided a long-term, coherent policy vision around which business, government and civil society have rallied. It remains to be seen, however, how this document will be treated at the conference.

Parsons said that, in the post-Mangaung period, what was needed was a powerful signal from political leaders that there would be more policy certainty and predictability and that collaboration with the private sector would be based on effective consultation and strong implementation.

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