For industries and businesses, dealing with a government deeply mired in an ideological mission to transform an economy must be one of life’s ultimate frustrations.
The ANC has an uneasy relationship with big business, many of which were built during apartheid and which still have white faces in their upper leadership.
In its policy documents, this difficult balancing of ANC ideology about transforming the economy and its need for the private sector to modernise the economy and create employment is evident. The party itself calls it “unity and struggle” or “co-operation and contestation”.
So, when Business For SA (B4SA) presents its members’ plans to revitalise an economy devastated by government actions to curb the spread of Covid-19, the immediate, and possibly overly cynical response, is to question how much of it will find traction with ministers — no matter how rational and obvious the solutions appear to the reader.
It may be easy to dismiss these concerns as cynical, but given the government's track record in putting the ANC's narrower interests first instead of doing what's best for the country, then it’s not an entirely unreasonable reaction.
The cabinet, which is essentially an extension of a small core of powerful ANC cadres and comrades, has a dismal history of listening to common sense from those outside the party and the leadership element. One need look no further than Eskom when the government failed to heed warning after warning that the generation fleet was old, electricity demand was growing strongly and new plants were needed quickly.
But at least it will go down in history that somebody tried.
The mining sector is but one example of the adversarial nature of the relationship between a large and important industry and the government. The tone of engagement between the two parties may have improved in the past year or two under the leadership of minister Gwede Mantashe, but there are still fundamental, intractable problems.
The Minerals Council SA and the department of mineral resources & energy are in court in two separate battles about the Mining Charter and certain clauses. The department argues that it has brought much-needed certainty to the industry with the charter. But if that certainty means investment withers and transactions wither, then no matter how noble the charter is, there must be another, less damaging way to reach the same ultimate objective.
The council, a member of B4SA, makes the plea in the strategy for regulatory certainty, arguing regulation of the charter is too subjective and far too easily changed. The industry has, in effect, had four charters since 2004, each more complicated and demanding than the last.
The third charter, drawn up and gazetted in 2017 by the compromised Mosebenzi Zwane during his tenure as mines minister, was shambolically bad, but despite scrapping it, Mantashe used it as the basis for the existing charter. The changes Zwane and Mantashe made about key provisions left the industry feeling betrayed and blindsided.
The council wants the Mineral and Petroleum Resources Development Act reviewed and rewritten, incorporating the charter.
What exactly these changes are that the council wants are yet to be clarified. Incorporating the charter into the act will convert the charter’s clauses from policy into regulation, meaning less scope for playing about the edges by both sides.
Regulatory uncertainty is one of the fundamental reasons for the dearth of expansion capital investment and a stagnation of exploration expenditure, which means there are no replacement deposits lined up when existing reserves and resources are mined out.
The department of mineral resources & energy, organised labour and the then-Chamber of Mines met in the Drakensberg for a mining summit in March 2010 to develop a joint strategy for growing and transforming the industry. A fat document that came from the talks raised the exact issues that are now besetting the industry, some of which have worsened, rather than improved. In other words, almost nothing has changed in a decade.
The council has presented studies, motivations, plans, proposals and suggestions to the department on how to grow the industry, bringing in new mines, new owners, increased labour, higher output. It’s fair to say precious little of this effort has gained traction with the government in the past decade.
Whatever unhappiness there was about the charter is worsened and the subject of an unsightly fight in court.
Pleas from the industry to unlock infrastructure — rail, ports and electricity generation — are as pertinent today as they were a decade ago. Billions of rand allocated to the parastatals operating this infrastructure have been squandered instead of sensibly deployed as intended. State and union grievances about the way some mining companies respond to their obligations under the charter remain pertinent.
The fault lines between the stakeholders are as deep as ever.
The government must listen to the pleas coming from the industry, which is desperate to grow. Slapping export taxes on “strategic minerals” to keep them in the country and firing up a non-existent manufacturing base to create products the world wants is not going to help.
Continuing to do what has been done for 26 years and seeing the mining industry in decline, shedding tens of thousands of jobs in an economy where one in three adults is unemployed, and then doubling down on that strategy is lunacy.
The ANC’s stated intentions in its policies cannot be faulted. Lifting the population out of poverty, creating decent living standards and jobs for all and creating a new society from the bitter ashes of apartheid are all admirable and desirable intentions.
But destroying industries with bad policies and regulations, and refusing to listen and adopt ideas because of ideological differences, or the simple arrogance of holding a perceived moral or political high ground is rank stupidity that SA simply cannot afford any longer.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.