The Congress of South African Trade Unions (Cosatu), which wants the government to tilt away from pro-business policies, called on new President Kgalema Motlanthe on Friday to eradicate poverty and create jobs.
Motlanthe pledged after being sworn in on Thursday to keep to the policies of predecessor Thabo Mbeki, who presided over South Africa’s longest period of economic growth before the ruling African National Congress (ANC) forced him to resign.
In a move to reassure investors rattled by the crisis, former trade union leader and ANC deputy leader Motlanthe reappointed respected Finance Minister Trevor Manuel.
Major changes are not expected under Motlanthe in the transitional period until a general election in about April, when ANC leader Jacob Zuma is expected to become president.
But markets are watching to see if Zuma’s left-leaning allies in the ANC, Cosatu and the South African Communist Party (SACP) pressure Motlanthe to start steering Africa’s biggest economy in a new direction. The three parties have an alliance.
In a speech at a SACP conference, Cosatu president Sidumo Dlamini said the trade-union federation looked forward to seeing the government tackle ”the immense challenge to create jobs and eradicate poverty”.
Motlanthe already faces huge challenges, including slowing economic growth and high inflation, which hit its highest level in August since before the end of apartheid at 13,7%.
Party divisions
SACP general secretary Blade Nzimande told Reuters the party did not have huge expectations of Motlanthe and would not pressure him because of his short time in office.
”We agree with President Kgalema, but what is not working must be changed,” he said without elaborating.
The SACP and Cosatu want an end to inflation-targeting, which they blame for high interest rates — the central bank’s repo rate has risen five percentage points to 12% over the past two years.
”Let’s debate it. We are saying the 3% to 6% [target] is killing us,” said Nzimande, adding it was ”a matter of urgency”.
The communists also renewed their demand that petrochemicals giant Sasol, the world’s biggest maker of motor fuel from coal, be nationalised and that a windfall tax be imposed during the transition to nationalisation.
Sasol, which pays most costs in rands and sells its output for dollars, has benefited from a sharp jump in crude prices. South Africa’s Treasury dropped proposals for a windfall tax on the company last August.
Analysts say Motlanthe will likely be preoccupied with easing the worst infighting in the ANC’s history, which peaked with the ouster of Mbeki last weekend after a judge suggested he interfered in a corruption case against Zuma.
The case was thrown out.
Cosatu and the SACP are pressing for more government spending to ease the poverty of millions of poor black South Africans, something Zuma has promised to do.
Mbeki’s failure to bring the fruits of black majority rule to millions of poor South Africans was a leading cause of his unpopularity with the leftist ANC backers of Zuma, a rival whom he fired as the country’s deputy president in 2005.
While expressing confidence that Motlanthe will heal ANC divisions, Dlamini said the situation is ”still very fragile and the outcome uncertain”.
Dlamini said the SACP policy conference will address a host of priorities including a pro-worker and pro-poor policy. — Thomson Reuters