INSIGHT: Economics low on NGC agenda

Economic policy is usually a big item at ANC conferences and gatherings. But there are no big economic policy issues on the agenda of the national general council.

On one level – that of ANC internal dynamics – this is because its economic policy debate is usually more about politics than economics.

So fiscal and monetary policy, nationalisation of the mines and “radical socioeconomic change” – all bitterly contested at previous gatherings – have been more about political factions making themselves felt, or about political messaging to members and the electorate, than seriously tackling the formulation of economic policy.

At this year’s national general council, political dissent – and hence economic debate – will be subdued. The Left of Cosatu is gone, the SACP has been co-opted and the ANC Youth League has been tamed.

Nationalisation no longer features at all in the discussion documents and “radical socioeconomic transformation” – the rallying call before the last general election – is hardly mentioned.

But on a deeper level, which speaks of the ANC’s capacity to make coherent policy and lead, the absence of any serious economic debate is a function of its dysfunctional politics.

The prospects for a productive discussion on the economy are low because the type of politics in which the ANC is caught up doesn’t make it possible.

Although a perfectly good set of remedies for the economy is contained in the National Development Plan (NDP) and is ready to be tested, because of chaotic leadership and the lack of consensus on a future vision under the administration of President Jacob Zuma, the economic chapter of the plan remains unopened.

This is not to say contested issues will not arise during the national general council. The discussion document prepared for it by the ANC’s economic transformation committee is mostly a lengthy report on the government’s programmes across economic sectors.

There won’t be time or the scope to have substantial discussion on these.

However, scattered among the reports are key points that lobby groups will want to win in the hope of ensuring these make it into a final resolution.

One example is the suggestion that “government must commit to a full, transparent and thorough cost benefit analysis of nuclear power”. The proposed nuclear programme is certain to be an issue and it will be fascinating to see if the Zuma bloc can again drive through a commitment to a 9.6gigawatt programme, as it has in earlier resolutions. There is quiet opposition to it among those who fear it is a vehicle for massive corruption.

Another is a call to revisit the governance and shareholder model of state-owned enterprises – a controversial discussion within the ANC national executive committee, which hasn’t been able to get properly off the ground.

Some, like Public Enterprises Minister Lynne Brown, would like progress on it, while others view it with a suspicion that it will mean privatisation.

A third issue is the suggestion of “a review of the organisation, focus and approach of the oil-and gas-related state-owned companies”. With the state poised to play a far bigger role in this area, the stakes are significantly raised around the Central Energy Fund and its associated companies.

These are small battles compared to the ideological wars of yesteryear. But returning to the big picture, the prospect of limited economic debate is distressing.

The upshot is that, despite the crisis in the economy, little can be expected from the ANC’s midterm review. We will have more of the same: incoherence in policy; drift in government; and no implementable programme for the economy.

In its discussion paper, the economic transformation committee does, however, recognise the most critical point of all. The committee, which is generally market-oriented and has a keen awareness of how the markets respond to ANC messaging, can sometimes be a breath of fresh air.

Among the turgid reports on economic sectors, and lists of recommendations, is a succinct macro-economic review. The review section of the report ends frankly with the conclusion that for government management of the economy to improve, the ANC needs more conducive politics.

The argument, in brief, runs like this: a key remedy for growth is, quite simply, the imperative to increase private investment while sustaining the public sector’s contribution.

It goes on to list 12 areas that, if acted on, could make the difference.

These include raising mining investment; improving telecommunications infrastructure and competition; implementing special economic zones; and maximising localisation benefits from public sector infrastructure expansion.

But, it goes on to say: “If consensus and effective action were to be achieved on issues such as these, there is no doubt investment levels in SA would rise towards the NDP target.”

With no plan to achieve consensus and effective action, SA will continue to muddle along in underperformance, with government decisions increasingly dominated by other concerns, such as patronage, or pandering to political constituencies.

Ironically, for delegates to the national general council, the poor performance of the economy is a bigger issue than usual.

Assuming the views of the ANC’s membership are broadly reflected in the population then, like the rest of the South Africa, ANC members are less content with the direction the country is going in than ever before.

With the large amount of media attention given to job losses and low growth, delegates are likely to be more aware than at the Mangaung conference in 2012 of the poor prospects of the economy turning around soon.

As regional meetings leading up to the council have indicated, ANC members do not doubt the correctness of the party’s policy direction. For insiders, the problem is really about weak implementation rather than a belief that policies are confused or wrong.

How then, should delegates respond to the problem of the economy? In the mode of the midterm review, delegates could be tempted to look around for who in government is to blame. Economics cluster cabinet ministers – Trade and Industry Minister Rob Davies and Economic Development Minister Ebrahim Patel – will find themselves vulnerable.

Political opportunists – and there are excellent ones in the ANC – will be keenly aware that succession debates are the undercurrent of all political interaction, and they will shake the economic tree to see what happens.

Patel is particularly vulnerable. In Mangaung, he was shunned by the Zuma slate and not given a place on the national executive committee, despite being encouraged to stand. His only political base is in the Southern African Clothing and Textile Workers Union, which has a sliver of influence in Western Cape politics.

His attempt to carve a role in the Presidential Infrastructure Co-ordinating Commission has not been completely without success, but no longer makes headlines.

His job-saving efforts after the 2008 financial crisis, while well-intentioned, were hopelessly inadequate.

Davies is also in trouble. The black business lobby has daggers drawn, believing him an insufficient champion of black economic empowerment. So do the tenderpreneurs – those inside the ANC and those outside with strong links to ANC structures – who see him as standing in the way of economic rent-seeking. These types will already have labelled Davies, a prominent SACP member, as undesirable.

Finance Minister Nhlanhla Nene looks relatively comfortable. While Treasury was once the neoliberal bogeyman, with the Left out of the picture it is no longer a prime target. Remarkably, some quarters that previously demonised Treasury – such as the SACP – now quietly see it as a necessary bulwark against corruption and the only institution at all capable of putting the brakes on some of the looting.

This is rather an odd turn-up for the books. It is small consolation, though, as the rest of the Zuma years stretch ahead.

• Carol Paton writes for Business Day