ANC: Acknowledging economic problems, sticking to its policies

In January, the ANC national executive committee (NEC) met to choose its priorities for its next term in government. The broad list included boosting employment, decent work, rural development, land and agrarian reform, education, health and tackling crime and corruption. Six months later, the party’s NEC lekgotla met again this weekend to look at the progress and assess changes made in improving the lives of particularly the poor and working class.

Reading the statement from the ANC meeting on Monday, secretary-general Gwede Mantashe didn’t focus on the details of the quality of life facing South Africans. The more immediate concern is the economy, stuck in quicksand since President Jacob Zuma’s term began in the wake of the global financial crisis. It makes it pretty hard to improve the quality of life of the poor with growth struggling to push 2% and decade-high unemployment levels.

“(The) lekgotla noted that the economy is growing at a disappointingly low rate. There has also been a worrying increase in the number of retrenchments in key sectors. Energy security continues to be a constraint,” the ANC’s statement put it, rather mildly.

Along with load-shedding, recent announcements of job losses in the mining sector are the latest symbol of the sluggish economy and a persistent failure to improve the unemployment rate. Last week, Anglo American announced it would cut 6,000 jobs while restructuring and divesting non-core assets. Platinum producer Lonmin announced plans to shed 6,000 workers. Kumba Iron Ore has scaled back 1,700 jobs and ArcelorMittal SA plans to put its Vereeniging works temporarily into care, affecting 1,200 workers.

Mantashe was critical of the plans, largely driven by low commodity prices. The ANC statement said: “South Africa remains a mineral driven economy, based on, amongst others, industrialisation through beneficiation and foreign earnings. (The) lekgotla noted the decline in the commodity prices across the sector. While we appreciate that the price of minerals is inherently cyclical, we also noted that the decline of the demand for steel in the Chinese market and the dumping of cheap steel in SA, is impacting negatively on our economy. Lekgotla, however, called for caution in the manner in which mining companies react to these challenges. 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 as such would lead us further into crisis.”

Remembering his days with the National Union of Mineworkers, Mantashe said industry players need to come together to find a solution that doesn’t cost jobs. “All I’m saying is when there are difficulties and problems players in that sector must get their hands together and not leave it to the employers who just look to profit maximisation and see the cutting of jobs as the obvious.”

On Monday, the secretary-general cited a recent conversation with a mining CEO who told him cutting some jobs will save many more workers in the industry. “It’s a story given by CEOs who are lazy to think,” Mantashe chided. “We think that it is unpatriotic to think that every time the behaviour of commodity prices goes down we will chop the jobs. We’re not just making the call. We will be meeting a number of these companies.” He didn’t elaborate on other plans the ANC or state may have to curb job losses in the mining industry but the Cabinet is meeting this week and could provide clarity.

As part of the ANC’s plan for its supposed radical transformation of the economy, Mantashe said on Tuesday that the challenges in the mining industry make it a perfect time to act to implement its plan for a state-owned mining company. “The strengthening of the state-owned mining company should continue as part of the objective to intervene in the mining industry and thereby radically transform the mining landscape of the country,” said the ANC statement.

The party articulated few other interventions to boost the flagging economy but it reaffirmed that the government needs to focus on commercial and subsistence farming, ensure the effect of investments and subsidies for manufacturing can be quantified , and make more effective use of industrial development zones, which should be drivers of the plan to create new black industrialists. On state-owned enterprises, the ANC called for crises to be attended to urgently. “They must be optimally used to improve economic infrastructure and increase economic growth. The state must be in a position to initiate and give life to catalytic sectors,” it said of the parastatals, the best-known of which have been limping from crisis to crisis recently.

If you are looking at the current economic challenges and pattern of low growth and high unemployment and hoping for a drastic policy shift in the ANC’s aim of “radical economic transformation” during the “second phase of the transition”, Mantashe didn’t provide any immediate answers. Again and again, he reads calls for the party to offer new policy direction. “We don’t change policies on the hoof,” said Mantashe. “The ANC is very systematic when it deals with policy.” There’s the national general council this year, then the policy conference and national elective conference in 2017.

We’ll know radical change when the current policies pay off, he suggested. The challenge is that the effects of the poor economy are here and it’s hard to be confident about the future, given the recent patterns. DM

Photo of Gwede Mantashe by Greg Nicolson.