ANC bemoans slow growth of SA economy

The ANC has bemoaned the sluggish state of the South African economy and has admitted to incapacity within the state and the ripple effect it is having on the economy. 

In its three-day mid-year lekgotla, the ruling party paid significant focus on the economy at a time when mining companies have threatened mass retrenchment. 

“Lekgotla noted that the economy is growing at a disappointingly low rate,” ANC secretary general Gwede Mantashe told reporters in Johannesburg on Monday. 

He said the party was concerned with how mining companies deal with challenges in the economy. 

“It is concerning that their response has been the cutting of jobs; which instead of resolving the challenges is deepening the crisis. Those companies that have already announced possible retrenchments are called upon to review their plans and avoid massive job losses [that] would lead us further into crisis,” Mantashe said. 

Last Friday, Anglo American and Lonmin announced their plans to retrench a combined 12 000 staff as a result of falling metals prices in a weak global economy.

Anglo chief executive Mark Cutifani reportedly said the company, pressured by a drop in iron ore prices, is aiming to save around $300-million by cutting 6 000 staff. 

Mining reaction
Lonmin, which is the world’s third-largest platinum producer, said it would shed 6 000 jobs in South Africa due to falling prices and high costs.

Mantashe said there was a “degree of arrogance” in how mining companies reacted to a weakened economy. 

He said it could not be that mining companies use retrenchments as a way to mitigate against the cyclical nature of commodity prices. 

“We have to all our apply our minds to get a solution and not look to one solution [of] cutting jobs,” he said.  Mantashe said mining companies should review their plans to retrench workers, saying retrenchments was not a viable solution. 

The department of mineral resources has been directed to engage with mining houses in an attempt to avert mass job losses. 

“It doesn’t matter what the state does. If the private sector is not co-operating the state will not succeed,” Mantashe said. 

He said the state and the private sector don’t see eye to eye on the dire unemployment rate in South Africa. 

“The private sector will only realise the dangers of high unemployment when that high unemployment translates to disruptions,” Mantashe said. 

Troubled parastatals
On the troubled state of South Africa’s state-owned entities (SOE’s), Mantashe was reluctant to talk about the specifics. 

He would not say what was particularly noted about rail agency Prasa and the leadership tussle that has plagued that organisation. 

“Lekgotla made a call to government to urgently attend to all apparent crisis points within the SOEs,” is all that the ANC statement offered. 

Mantashe said this was regardless of whether it was power utility Eskom or Prasa. 

The ANC lekgotla, which is made up of the ANC’s national executive committee, leaders of the SACP and Cosatu as well as ministers and deputy ministers, spoke at length regarding the state’s incapacity to effectively deliver services. 

“We considered the capacity of the state to drive our programme of fundamental transformation; particularly given the volume of work that is still driven by consultants,” Mantashe said. 

He said the ANC agreed that building capacity needed constant focus. 

“Should we fail to build this capacity, we will continue to complain about lack of implementation,” Mantashe noted.

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