The ANC has decided to introduce measures including export taxes in the next five years to encourage companies to use local raw materials for domestic manufacturing, according to a person with knowledge of the matter.
The party’s national executive committee had decided at a meeting from June 5 to 7 to implement previously adopted ideas within the current administration’s term, said the person, who did not want to be identified because details of ANC meetings are private.
Enoch Godongwana, the head of the ANC’s economic transformation committee, said the ANC had told officials in the Department of Mineral Resources and the Department of Trade and Industry to assess which minerals might be classified as “strategic” before considering how to ensure they could be harnessed to support economic growth.
“Regulation is a last resort. There is no overall consensus on taking such measures.”
Since winning the elections on May 7, the ANC has pledged to enact more “radical” economic transformation as it seeks to appease growing disgruntlement over the 25.2 percent unemployment rate.
The party hopes that enforcing the use of minerals in local manufacturing will give South Africa a competitive advantage over other countries.
The ANC said in December 2012 that it would impose measures such as export restrictions to ensure local users had a guaranteed supply of iron ore, coal, copper, zinc and nickel.
South Africa’s mining industry, which contributes more than 5 percent of gross domestic product and accounts for two-thirds of exports, has been hard hit by the five-month platinum industry strike that ended last week.
The country’s mineral wealth is worth an estimated R35 trillion, according to projections by the Department of Mineral Resources.
At its meeting, the ANC had also decided to remove regulatory barriers to investment in energy projects as it sought to end power shortages, the source said, adding the ANC wanted the government to make energy supply its top priority.
Since the meeting, Mineral Resources Minister Ngoako Ramatlhodi has said he had asked President Jacob Zuma to delay signing into law proposed changes to the Mineral and Petroleum Resources Development Act.
These include giving the government the right to a free 20 percent stake in all new energy ventures and to change how projects are awarded, threatening to stymie investment in oil and gas exploration.
The ANC had also decided to take steps against poor lending practices and excessive charges by banks, the source added.
The Reserve Bank has warned of the danger of the growth in unsecured lending, which can turn into bad debt. – Bloomberg