SACP warns ANC: ‘Don’t backtrack on promised sovereign wealth fund’

The SA Communist Party (SACP) has called for the establishment of a sovereign wealth fund within the next five years as promised in the 29 May election manifesto.

The proposal for this was contained in the May 2024 ANC election manifesto which was endorsed by its alliance partners.

SACP general secretary Solly Mapaila said the sovereign wealth fund was crucial to achieve the nation’s economic and broader social transformation and development priorities.

Don’t backtrack

He added that “government must not backtrack on the commitment” to set it up.

Mapaila’s call comes as the ANC drifts deeper into the neo-liberal fold following the establishment of the government of national unity with the DA and mainly right-leaning parties.

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Writing in the party’s Red Alert journal published last week, Mapaila said South Africa was richly endowed with natural resources boasting some of the world’s largest reserves.

But the resources did not belong to the people as a whole and were being exploited by profit-driven capitalist interests and not for the benefit of a collective good.

Royalties from minerals

Mapaila referred to President Cyril Ramaphosa’s recent reply to a question in parliament where he said that public revenues or royalties from mineral resources had historically not been very reliable or consistent.

Mapaila said “royalties from our mineral resources were insignificant” but when excluding corporate income tax and wages, after covering production costs, the rest of the mineral resources value and related labour processes went to private profits.

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“The ultimate value of our mineral resources, which takes the profit form, does not belong to the people as a whole.

“Instead, it belongs to the tiny minority of extractive private shareholders or owners who receive dividends from these profits.

“Rather than justifying the perpetuation of this economic and social injustice, the government must act as the chief representative of the people as a whole,” he said.

He added: “Income from our natural resources, including a share of profits, as well as royalties, which must be reviewed to be adequate, reliable and consistent, must be used as a primary source of funding to establish the Sovereign Wealth Fund.”

Global examples

He cited the global environment where he said the revenue from natural resources, particularly oil, gas and minerals, had been a significant source of funding for many sovereign wealth funds.

“By leveraging natural resource revenue as part of national resources, governments that do so have established sovereign wealth funds and use these funds to invest in diversified portfolios which included supporting national economic and broader social development priorities,” he said.

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He cited several examples of how various countries had successfully leveraged revenue from their natural resources to establish and grow their Sovereign Wealth Funds.

Norway’s Government Pension Fund Global, also called the Norwegian Oil Fund, was one of the largest globally and most successful in the world, Mapaila said.