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Mullings on Mangaung

Dec 14 2012 11:41 *James-Brent Styan


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IF YOU can manage to look beyond the messy ANC leadership struggle that’s been dominating headlines, it’s worth remembering ANC delegates will also be discussing several key economic issues in Mangaung.

Essentially, there are two major issues I’ll be looking out for: nationalisation and windfall tax.

Over the past few years, the ANC and government have insisted nationalisation is not on the agenda - most often this was shouted out loudly by Mining Minister Susan Shabangu - yet they have allowed debate on the matter to continue.

This seeming uncertainty on the issue has not led to investor confidence, which has hit record low levels in South Africa’s mining industry in recent times.

So will the ANC make a formal decision on nationalisation in Mangaung?

The policy documents that will be discussed next week state: “Our economic vision rests on the Freedom Charter’s clarion call that the people shall share in South Africa’s wealth.

"Through economic transformation we intend to build an equitable society in which there is decent work for all.”

Red hot poker

Some, like expelled ANC Youth League leader Julius Malema, have interpreted this to mean nationalisation, and in particular nationalisation of mines and banks.

Up until now, the ANC has taken a different line, but economic circumstances are arguably getting worse which may add fuel to the fire of the nationalisation call.

What may be discussed properly in Manguang is how to strengthen the recently created state mining company. The ANC wants to consolidate state mining assets into this single institution, and use it to gain greater control over the country’s mineral wealth.

What is concerning is the state’s record in the industry. The only state-owned mine, diamond mine Alexkor, made a massive loss in the past year and has been doing terribly badly in government hands. Not comforting at all.

We may also see some movement on financial regulation and control, including the creation of a state-owned bank.

We may also receive a surprise and see nationalisation finally shoved off the table, but in its place the mooting of a windfall “supertax”. This will boil down to taxing mining companies severely.

The idea is lamentable, given the lack of investment in the industry we’ve seen of late. It’s sure to send potential investors running for the hills, or South America at least.

The debate will be hot but may probably lead to nothing final and the matter simply being kicked further down the road.

Other big elephants in the room will be the youth wage subsidy, and labour broker issues that are sure to come up.

I suspect this will lead to huge friction between the ANC and its largest alliance partner, Cosatu, whose leaders will also be attending the Mangaung party.

I don’t see Cosatu sitting idly by while ANC delegates agree on implementing the youth wage subsidy and/or labour broking, both issues Cosatu wants swept off the table even with South Africa's current unemployment rates.

The ANC delegates know they have big decisions to make to try and resolve the unemployment issue as well as massive inequality levels in the country.

It’s guaranteed that those will be two magic words thrown around ad nauseum from Sunday.

Whether ANC delegates will be willing to make the tough decisions remains to be seen. If they do, it will mean jabbing big mama bear Cosatu with a red hot poker.

 - Fin24

*Follow James-Brent Styan on Twitter at @jamesstyan. Views expressed in this column are his own.



 
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