Lutho Nduvane: ANC policy conference missed the real economic point

The ANC policy conference was preceded by a plethora of negative events at a politico-economic level, ranging from the state capture reports, the rupture within the alliance, the downgrading by rating agencies, as well as the Gupta leaks, to mention but a few.

It also took place at a time when the “Gupta-Bell-Pottinger-BLF-Manyi” narrative of the white monopoly capital as well as a counter narrative which dismissed the racialisation of monopoly capital dominated the political economy discourse in our country.

All of these issues surely influenced the content of discussions at the conference.

The discussion documents, particularly the strategies and tactics and the economic transformation proposals, did not provide any radical departure from previous ANC policy documents.

The economic transformation document in particular was a regurgitation of the National Development Plan, reinforcing the view that the ANC is actually state led.

The documents reiterated a longheld view within the ANC that the economy is not a cryptic system, prevailing outside of society. It is meant to serve society rather than an elite that is politically connected.

The policy documents also emphasised the fundamental change to the structure of the South African economy, while ensuring consistent and sustained inclusive growth.

They also raised sharply the role of state-owned companies and development finance institutions which should be leveraged strategically to direct economic development for the benefit of the people.

It is unfortunate that the policy conference, rather than taking stock of the pitfalls and challenges that are confronting our country, particularly the declining economic growth, the debt to GDP ratio – currently sitting at 51.7% as a result of mismanaged and captured state-owned entities – became a proxy war of ANC factions.

Government guarantees to SOEs is almost R467-billion which is an equivalent of 11% of the GDP.

The South African Airways is an example of state monopoly which is inefficient and a financial drag on the fiscus. It is my contention that the national policy conference missed an opportunity to discuss ways of effectively managing the wealth that is in the hands of the state in order to drive the socio-economic transformation agenda of the country.

The government procurement spend is sitting at about R1.2-trillion, and the state controls about 31 state companies with a net asset value of about R1.5-trillion, which is an equivalent of 30% to the GDP.

The policy conference should have formulated a framework to decisively influence strategically the SOEs to direct economic development for the benefit of the people.

It also fell short in dealing with practical ways of ensuring that these SOEs are protected from being captured by the politically connected elite.

It is my contention that the conference should have spent more time in dealing with those issues that are in the control of state and are glaringly mismanaged, particularly the SOEs and unproductive land.

There are, however, positive signs for the economy that emanated from the conference:

The policy discussion documents did not radically shift from the previous documents, thereby creating a sense of stability;

The independence of the South African Reserve Bank was guaranteed;

The realisation that socioeconomic transformation should embed inclusive growth to be sustainable; and

The ANC should work on the “trust deficit” issues that exist among the state and the private sector, international and domestic investors.

Lutho Nduvane (ANC member in Mandela Bay) writes in his personal capacity

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