#ANC54 to turn up the heat up on radical economic change plans

The ANC national conference is over the hurdle of vetting credentials, and will also soon have appointed new party leadership. But still ahead is a heated debate over divisive policies proposed in the name of radical economic transformation.

Most of the fire and fury is likely to play out in the economic transformation sectoral commission, which, like the eight other commissions, will convene shortly after the party announces its new top six.

The most contentious proposals put on the economic transformation table at the policy conference in July included: expropriation of land without compensation, nationalising the Reserve Bank and introducing prescribed assets — a policy which would force pension fund managers to lend money to dysfunctional state-owned entities.

Regardless of who wins the party’s leadership race, according to one NEC member, debate about land reform, notably expropriation without compensation, prescribed assets, nationalising the Reserve Bank and ownership and transformation of the mining sector are going to be hot-button issues.

The debate over whether to nationalise the Reserve Bank will have to confront how to buy out the private shareholders without compensating speculators, and how this can be done in a way that the state and economy can afford. 

In the health and education subcommittee, the question of free higher education will probably present a conundrum.
A resolution to implement free higher education for the poor and missing-middle students was to be voted on at the conference, but on Saturday President Jacob Zuma announced that it would be implemented from next year.

The Mail & Guardian reported that, in doing so, Zuma appeared to have gone against advice from treasury and did not consult the party’s national executive committee.

The addition of prescribed assets into ANC policy discussions coincided with the growing reluctance of the private sector to lend to state-owned entities, or buy their bonds — particularly as revelations of governance failures and allegations of state capture emerged at entities such as Eskom, Denel and SAA.

But it was important to diagnose the actual problem when it came to the debate around prescribed assets, the source said. The challenges at the state-owned enterprises are governance-related.

“You have to ask which asset classes is the financial sector not investing in and why, so you can identify the correct prescription,” the source said, adding that it was important to determine whether to introduce prescription or create a regulatory framework that attracted investment.

The debate on land reform, another focal point, would also have to confront the administration’s performance on the matter.

Academics Ruth Hall and Themebela Kepe have pointed out that in recent years there is evidence of elite capture and state collusion with agribusiness in the land reform process.

Land beneficiaries do not have documented land rights, which in turn affects their ability to access capital and production financing.

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