The overwhelming observation from the ANC
Policy Conference in Midrand is that there is more clarity
on some vital issues, but simultaneously more questions about others. Investors will not like the ambiguity that
reform will continue, even be accelerated, without
changing the Constitution. It means that
sec 25 of the Constitution, the so-called property clause, will remain as is. This
clause states that where land is expropriated “just and equitable” compensation
must be paid. The notion of paying for
land taken for redistribution was also clearly articulated by a number of
leaders, including Mr Zuma himself. No ambiguity there.
The already mooted office of a Land Valuer to help establish land values will presumably play a
role here helping the state as purchaser to determine a just and equitable
price for land. Disagreements between
the Land Valuer and sellers on price will have to be
adjudicated by the High Court.
So much for pre-Conference calls for the
property clause to be changed; for Youth
League calls that land should be taken without paying for it; and for SACP
Youth League calls for an “act of war” to grab land.
tribunal, which was so prominent as an ANC
proposal since the 2007 Conference in Polokwane, is
now off the table. Delegates accepted as
sufficient the proposals of the Press Commission, appointed by the print media
owners and editors and chaired by ex-Chief Justice Pius Langa,
on press regulation. Essentially the system
of self-regulation currently in place will be replaced by independent
regulation. Libertarians do not like it,
but most people are comfortable with it.
A long standing attack on the media has
been seen off and an important consensus has been formed on media freedom in
the country. It is a remarkable example
of a private sector initiative that shaped important public policy.
On the critical issue of nationalisation in
the mining industry there was no clear YES or NO.
Reports suggest there was support for
“strategic nationalisation on the balance of evidence”. That seems to suggest holus bolus or blanket
nationalisation is out, but public ownership under certain (unknown) conditions
is supported. In the final press
conference the issue was fudged, which is probably an indication of which way
the leadership wanted it to go (NO).
Conference has also decided that there
should be “state intervention in the minerals and mining sector”. Precisely what that means is unclear, but the
following can be pieced together.
The existing state mining
company should be “strengthened” by “consolidating all state mining assets into
(this) single institution”.
This company should form
partnerships with private sector companies in mining “strategic minerals” (not
Beneficiation plans (up- and
downstream) should be considered when allocating mining rights.
There is agreement “in
principle that tax instruments may be utilized to capture the mineral rent”. Which instruments, how much and what money we
are talking about is uncertain.
There was consensus that the
“country should have access to enough coal before it is exported” and that
“import parity prices will not be paid for coal”. This is an attempt to lower the production
costs of Eskom and reduce pressure on electricity tariffs. It is unclear whether this will be achieved
through an export tax or by declaring coal a strategic asset. The potential downside for coal producers is
Similar sentiments were
expressed in respect of iron ore used in steel making and import parity pricing
of steel. The opinion was that the
Competition authorities must be mandated to find ways to counter import parity
Although not as clear as the Land reform stance,
this position is again not what the Youth League and others have called for in
their nationalisation campaign. But it
is also not as clear and unambiguous as investors would have liked it.
There are conflicting reports on whether
the Youth Wage subsidy is off the table.
The subsidy as well as a job seekers’ grant will be discussed further
with organised labour and youth movements.
The difference between a subsidy and grant is that the wage subsidy
would go to employers, whilst the grant will go to job seekers. How this is done practically is unclear but it
can involve the job recruitment and placement industry.
From the rhetoric of the Conference,
particularly pres Zuma’s opening and closing
addresses, one gets a sense of urgency and strong intent. There is, however, a distinct lack of clarity
on detail and practical action steps.
Thus, giving Black people a bigger say in
the economy and lambasting “white males” for still controlling the economy was
a constant theme, but we have no idea which of the seven pillars of BEE will be
changed or strengthened to enhance Black ownership.
Compounding the lack of 100% clarity is the
fact that all of these positions and decisions must still be ratified by the Mangaung Conference in December. Mangaung is the fat
Lady and till she sings expect ongoing contestation and debate. It will add to the ambiguity.
The main party political story from Midrand was
Conference’s refusal to back pres Zuma’s “second
transition”. The concept first surfaced
in policy papers prepared for Conference.
Mr Zuma then punted it in Upington
and Parys at provincial conferences of the ANC, again during his opening
address at Conference and yet again at a press conference after his
address. There was no doubt where he was
But delegates rejected the term. Instead, the “second phase of the transition”
became the preferred term.
Dep-pres Motlanthe was sceptical of the
concept “Second transition” and said as much on 14 June at a Conference at Liliesleaf Farm.
Many observers read the Liliesleaf speech as Motlanthe throwing down the gauntlet to Zuma. Clearly Motlanthe’s
view prevailed at Midrand.
Does that mean he will challenge pres Zuma in Mangaung in
December? Some news reports suggested
that, but we will only get a real indication by October when ANC branches
countrywide have to submit their nominations for the leadership of the
History will not necessarily repeat itself,
but in 2007 60% of branches nominated Mr Zuma and
about 40% Mr Mbeki. That was also the
way the Conference in Polokwane eventually
voted. (By the way, Cyril Ramaphosa, who was emphatically NOT a candidate then, was
nominated by more branches than the third official candidate Tokyo Sexwale.)
Clearly the agricultural sector and
property rights are better off after Conference than before.
The print media is, likewise, also better
The mining sector is not better off –
uncertainty remains. A golden
opportunity to get in behind the findings of the ANC’s own SIMS report
(Strategic Intervention in the Minerals Sector) has been missed.
Perhaps the best comment on the ANC policy
conference is that in the same week Treasury auctioned R500 million in bonds
that will only mature in 2048 – 36 years from now. That is a very long time to give your money
to somebody. Well, the auction was 3
times over-subscribed! Clearly investors are not too intimidated by anything coming out of Midrand.