The ANC has resolved that the government should prioritise boosting lagging investment in big infrastructure projects in SA to stimulate employment, business confidence and economic growth.
If enough public private sector money is injected into these projects, economists widely agree that SA could again reach economic growth of up to 5%, last seen in the early- to mid-2000s.
“The conference endorsed the key pillars on which all our economic interventions must be anchored ... expanding investment in infrastructure to improve community access to basic services, increase the overall efficiency and competitiveness of the economy. [Also] structural reforms of network industries, including electricity, telecom, water, rail, aviation and road infrastructure to improve performance,” said the party’s economic policy resolutions.
The resolutions were presented and adopted in a closed session of the ANC’s reconvened national conference last week.
Economic growth and business confidence in SA remain stagnant amid continued governance constraints and energy instability. This has prompted business leaders to urge the government to bite the bullet and institute politically unpopular decisions on the economy.
This policy has thus far put it on a collision course with its left leaning alliance partners and president Cyril Ramaphosa’s political opponents within the party, who see the ANC as selling its soul to capital.
Though not entirely new, economists have welcomed the party’s focus on infrastructure development for both community upliftment and a stronger economic performance.
“There are numerous global studies [that] show that infrastructure investment leads economic growth in a very material way. Load-shedding shows us every day the damage wrought by failure to invest in infrastructure,” said Andrew Canter, chief investment officer at Future Growth Asset Management.
“Ultimately, economics and pragmatism will prevail. We must mitigate global warming; the price of green energy is falling; SA has huge non-carbon emitting resources; and it is already easier to finance clean-power sources,” Canter said on the way forward.
Chief economist at the Bureau for Economic Research at Stellenbosch University, Hugo Pienaar, said the bulk of the resolutions were nothing new. He said the key thing was in the implementation of the resolutions.
“I would not hold my breath. We have heard this many times before, but if we execute this decision it would be fantastic. But so far there is nothing to write home about.”
The party’s economic policy resolutions included the strengthening of industrial policy interventions to support the growth and expansion of the manufacturing and services sectors.
On economic transformation, the ANC has resolved to work more aggressively at levelling the playing field by using state institutions.
“Using policy frameworks, such as competition policy, procurement policies and other instruments [can] challenge highly concentrated ownership patterns,” the document said.
While the ANC’s national conference endorsed Ramaphosa’s energy plan, it also called for a uniform approach to power generation, which could signal a cabinet decision for Eskom to fall under the department of energy instead of public enterprises.
The ANC’s economic policy resolutions also responded to legal challenges to the country’s oil and gas exploration efforts, saying resolutions needed to be “fast-tracked”.
“We need a no-nonsense approach to reducing the cost of doing business in SA. That includes energy, logistics and a rapid reduction in crime and corruption,” Pienaar said.
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