The ANC aspires to focus on the poor when policy proposals are fleshed out at its upcoming lekgotla.
Enoch Godongwana, the newly elected chairperson of the ANC national executive committee's economic transformation committee, spoke to the Mail & Guardian about the economic policy proposals adopted at Mangaung in December.
President Jacob Zuma spoke of a radical shift in economic policy. Has the ANC adopted radical policies?
Despite everything we have done in the past 20 years we still face challenges of unemployment, poverty and inequality. The test for us is that any policy we adopt should advance those objectives. If there is any trade-off from our macroeconomic framework it must be in favour of the productive sector because we have to put South Africans into jobs.
Has the ANC dropped nationalisation altogether, or will it be considered for other strategic sectors?
Nationalisation is an instrument. It is not a policy issue. The policy issue is public ownership. We said we will increase state ownership in strategic sectors. The instruments that will be used to achieve that objective will be determined by the balance of evidence in relation to the sectors we are talking about. The document does not rule out nationalisation.
What is a strategic sector?
We said, for instance, that in the mining sector we are endowed with national resources and those resources must be used in the interest of society as a whole. We then said what we needed to do was set up a state mining company.
When will the state-owned mining company start operating?
It exists … [and it is operational]. We took a decision to strengthen the company. It needs to have a strong balance sheet, good management and good governance.
Many state-owned enterprises have been a failure. How will the mining company be sustainable?
This argument of failure is being taken to the extreme. Eskom is among the top 10 in the world. Transnet is ranked highly by the World Bank - above Brazil and Turkey. There are shortcomings in state-owned enterprises but it is not as bad as it is made out to be.
The ANC's research report, the State Intervention in the Mining Sector, recommended a 50% super tax for companies. Have you adopted this or agreed on a figure?
We have not adopted a figure. But the principle of achieving redistribution through a tax regime has been adopted.
Does this not represent policy uncertainty?
Governments tax people and industries. I don't understand why the principle of taxation would represent a policy uncertainty.
The mining industry was hardest hit by the recession and a series of illegal strikes in 2012. Are you not concerned that imposing high taxes will chase away investors and result in more job losses?
Strikes are a feature in any demo-cracy. What was exceptional about [the Marikana] strike was its violent nature, which is something we need to address with the labour movement. In any democracy there are rights and obligations, but the right to strike does not mean that people can be violent. What would have dented the image of the country is not the strikes but [the violence].
What has the ANC decided on the issue of the youth wage subsidy?
The issue of youth unemployment is an urgent matter and dramatic measures need to be taken. We have to have an employment incentive scheme. There are key questions that we need to confront and discuss with the labour movement. We will talk to Cosatu. We will flesh out all the policy proposals arising out of Mangaung at the ANC lekgotla at the end of the month.
The South African Communist Party's deputy general secretary, Jeremy Cronin, wants the ANC to do away with black economic empowerment (BEE). Would you consider this?
I don't agree. We said at the ANC's congress in Stellenbosch [in 2002] that it [BEE] was a moral imperative. We cannot transform without taking that into account.
Yet the black control of market capitalisation on the Johannesburg Stock Exchange has not had a significant effect.
If that's your measure of ownership, then it is an inappropriate one. BEE is broad and includes those who have become the middle class as a result of the programme of affirmative action, which in itself is part of BEE. If you look at black millionaires who are a product of preferential procurement, none of them has listed on the JSE. It is not about listing on the JSE. It [BEE] is about advancing the economic status of black people.