ANC swallows Mboweni’s bitter fiscal pill… but will Cosatu, SACP?

The ANC has endorsed Finance Minister Tito Mboweni’s plan to get rid of state-owned enterprises (SOEs) that were malfunctioning, offering to bring in worker and social models of ownership in running these entities.

ANC secretary-general Ace Magashule told The Citizen yesterday they planned to get rid of SOEs that “were not functioning” but the matter would be discussed with the alliance partners. He declined to name the entities identified.

“We are in discussion with our allies. The Party (SACP) is saying to us implement your resolutions,” Magashule said.

But the Congress of South African Trade Unions (Cosatu) said it would oppose any privatisation of SOEs and that its position on this would not change.

Cosatu’s national spokesperson, Sizwe Pamla, said the workers had terrible experiences with the privatisation of former SOEs such as Iscor and Telkom, where employees faced layoffs.

“Our understanding was the ANC did not discuss Mboweni’s paper, but the state of the economy and proposed suggestions on the table. It was not Mboweni’s paper but economy informed by National Treasury proposals and those of relevant parties.

“Our problem remains that the paper failed to include other departments in the economic cluster. Cosatu’s input and position on SOEs had never changed: we reject privatisation and that is the position we adopted since 2003.”

Pamla said the federation could entertain the involvement of the private sector in SOEs in certain circumstances – but if only the government remained the majority shareholder.

The ANC national executive committee (NEC) resolved to prioritise the restructuring of Eskom and deal with the unsustainable financial position of other SOEs, including SAA and Denel.

It became clear from his smile and cracking of jokes with journalists at the media conference that Mboweni has had his way as the governing ANC top brass largely accepted his economic recovery blueprint.

In an unprecedented move, Magashule and his archrivals, Mboweni and chair of the ANC economic transformation subcommittee Enoch Godongwana, jointly addressed the briefing.

Magashule had in the past differed with Mboweni and Godongwana on ANC economic policy approach, including whether the Reserve Bank mandate should be changed.

The trio said the NEC had agreed on a range of economic policy interventions to achieve a higher rate of economic growth and inclusion. The proposals do not include labour matters that were still to be finalised at the multi-stakeholder Nedlac and the Alliance Political Council, a forum of the ANC, SACP and Cosatu leaderships.

“There was a broad consensus across all presentations on the severity of the challenges and the key economic tasks of the moment,” Magashule said.

“The NEC confirmed that the overarching objective of economic policy remains to build an inclusive economy by stimulating investment, growth and job creation and thereby decisively tackling poverty and inequality, raising living standards and improving the well-being of all South Africans.”

Godongwana said the NEC approved Eskom’s restructuring into entities for generation, transmission and distribution but stressed this was not privatisation.

He said although Mboweni’s document was accepted, it did not necessarily mean that Cosatu and the SACP were fully satisfied with some aspects of it but the party was determined to meet them at Alliance Political Council level. The council was where the three partners discussed mutual interests and tried to reach compromises.

Magashule said the NEC agreed on a policy package that more effectively promoted sustainable demand, together with economic reforms that lay the foundations for medium- and long-term impact. “These reforms must provide especially young people, women and people with disabilities with opportunities to participate in the economy, while expanding the industrial capabilities of the economy,” he said.

The NEC further endorsed the new approach to develop various spatial economic initiatives, including special economic zones, industrial parks and district municipality interventions.

– ericn@citizen.co.za

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