The ANC has provided the assurance that the nationalisation debate is off the table, but the National Executive Committee (NEC) remains committed to implementing a system of “reference pricing” to provide fixed prices for goods and commodities and targeting a certain percentage of strategic resources for beneficiation.
This emerged from an NEC lekgotla – big meeting – held after the recent policy conference to fine-tune policy positions, particularly on economic policy matters.
Bloomberg reported ANC secretary-general Gwede Mantashe as saying the party planned to finalise a list of so-called strategic minerals by next month. The government would set aside a certain percentage of the strategic resources for local beneficiation, he said.
The government also wished to work with manufacturers and suppliers, thus cutting out middlemen and the attendant costs. It would also develop its construction capacity to reduce dependence on tenders. This tended to breed corruption, Mantashe argued.
This is in line with the SACP’s arguments that tenderpreuneurism – or jobs for pals – can be eradicated by allowing all spheres of the government – including local government – to carry out the job of providing services themselves.
The secretary-general’s remarks also coincide with arguments recently put to the parliamentary energy and cooperative governance committees by the SA Local Government Association.
Mthobeli Kolisa, the association’s infrastructure director, argued that foreign direct investment in infrastructure – particularly the electricity distribution component – should be prescribed.
Dennis Dykes, the Nedbank Group chief economist, expressed concern that the government would be taking a more direct role in the economy “in general”.
The consequence of a price and incomes policy had been proved – at least in the Soviet experience – to end up controlling prices but not ending supply shortages.
“People theoretically have access to reasonably (and fixed) priced goods but often don’t get access to the goods,” he said.
The lekgotla’s indication that it supported the National Planning Commission’s 30-year plan – which tended to be more liberal in sentiment than recent economic policy documents released by the ANC – was welcome, Dykes said. But he added that this document should be guiding the ANC in a much more active way.
The NEC expressed “support for the work of the National Planning Commission”.
The NEC agreed that the National Development Plan “thus far is on the right track towards taking the country forward”. The NEC committed itself to continue engaging with the plan.
It said the commission was “working hard to develop the national vision that the nation can converge around”.
Noting that the ANC would be investigating implementing “reference pricing”, Dawie Roodt, Efficient Group’s chief economist, said this was a centrally-controlled system which ensured that “prices are the same everywhere… that is important to the Left ideology”.
That means the cost of bread and eggs, for example, was uniform. “They would probably start with basic goods,” Roodt said.
With regard to prescribing a percentage of strategic resources for use for beneficiation domestically, Roodt said this was “a silly idea”. For example, the Chinese may be better at adding value at iron ore – an example of what could be one of the strategic resources earmarked – “but we may be better at added value of our maize production”.