The ANC is proposing greater private sector involvement in the economy, a radical policy shift for an organisation that has long been in favour of state-led growth and possibly a reflection of the government’s constrained finances to lift growth.
In a discussion document on economic policy, obtained by Business Day ahead of the party’s policy conference later in 2022, the ANC outlined a range of interventions that broadly propose that private sector companies buy stakes in state-owned enterprises (SOEs), play a bigger role in infrastructure funding and help solve the country’s energy crisis.
It proposes that the private sector can help by donating land, after the party failed in 2021 to garner enough support in parliament to amend the constitution to allow for expropriation without compensation.
"The failure to deliver on the promise of a more equal and prosperous economy for most South Africans has led to widespread anger and disillusionment with democratic processes," the ANC said in the 41-page document.
"It opens the door to authoritarian and populist politicians who promise easy solutions that range from xenophobia to criminal looting of businesses. It has given rise to crime and violent protest at a huge cost to the economy and society."
The idea for a more strategic role for the private sector, first floated by President Cyril Ramaphosa in the 2022 state of the nation address, could be seen as a radical departure in policy thinking for the ANC, whose left-leaning partners Cosatu and the SA Communist Party have long opposed the partial privatisation of SOEs, let alone full privatisation or private sector-led growth.
The proposals could also be an acknowledgment that the National Treasury, which has made commitments to ratings agencies to reduce budget shortfalls and keep borrowing in check, has limited space to lead the recovery of the economy, the fragile prospects of which were hit by a combination of lockdown restrictions, the unrest in July 2021 and, most recently, the flooding in April.
The coffers of SOEs such as Eskom and Transnet are too empty to play a meaningful role in the envisioned infrastructure spending-led growth as many of them recover from the looting frenzy during the state capture years.
"In these circumstances, the ANC needs to propose solutions that are large and disruptive enough to reshape the economy but that are also economically and socially sustainable. We have to discuss the risks and costs of change, and how these will best be managed.
"We can no longer afford to underplay the risks and costs of failing to meet the demands of our people," according to the document, which is expected to be made public this week.
The ANC, which is smarting from its worst electoral showing in the 2021 local government elections, said it would provide political muscle for agreed-on economic projects and, in exchange for private sector investment into the economy, the government would provide incentives to companies that create jobs.
A key plank of the draft recommendations is that a land reform and agricultural development agency be set up to facilitate land donations and reward those companies with recognition for boosting black participation in the economy.
The ANC confirmed speculation that the government, through the Central Energy Fund (CEF), is in talks to buy oil refinery Sapref, which has been put in care and maintenance by joint owners BP and Shell.
The document proposes that the government rally behind the CEF’s efforts to acquire the refinery. "This transaction should be supported, if following a cost-benefit analysis it is clear that such a transaction will be beneficial for the wider SA economy."
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