A draft policy document by South Africa’s ruling party suggests the private sector will play a greater role in the economy, a proposal backed by President Cyril Ramaphosa, providing further evidence of a change in thinking in institutions that have traditionally supported state-led growth.
An African National Congress document obtained by Bloomberg recommends that private companies invest in infrastructure and take over state-owned enterprises.
It also envisions businesses and individuals donating land to start programs that improve access for Black farmers.
Efforts to revive the economy have faltered in the wake of the coronavirus pandemic and nine years of misgovernment under Ramaphosa’s predecessor, Jacob Zuma. The government estimates that more than 500 billion rand ($32 billion) was stolen during that time, mostly from state-owned companies.
Many businesses are now dependent on government bailouts, and the country’s troubled power company Eskom Holdings SOC has increased the number of power outages, known locally as load shedding.
The government has faced criticism for showing inertia in addressing energy shortages and clearing bureaucratic hurdles to investment.
In February, President Ramaphosa called for an environment that makes it easier for companies to create jobs.
The ANC is allied with the South African Communist Party, maintains strong ties with Russia and Cuba, and has previously adopted proposals to create state banks, nationalize the central bank and facilitate land seizures without compensation.
“Programs to enable broader access to land rights are neither effective nor sufficiently ambitious in scale,” the ANC said in a document dated April.
“Mobilization of investment in new production capacity has been insufficient and has been severely constrained by load shedding due to power shortages for the past 15 years.”
“All of this has been made worse by the COVID-19 pandemic.”
ANC spokesperson Pulu Mabe did not respond to requests for comment. The drafting of the document comes ahead of the party’s policy conference later this year.
land donation
The main thrust of the party’s draft recommendations is that the government’s proposed Land Reform and Agricultural Development Authority would encourage land donations and reward these companies for promoting black economic participation, a requirement for doing business with the state.
The document, titled “Strengthening economic recovery and reconstruction towards an inclusive economy,” includes other proposals.
Take steps to boost the exploration of gas and so-called green metals (nickel, vanadium, copper, cobalt, platinum) The government, in collaboration with the private sector, must implement at least 10 “high-impact” infrastructure projects in the 2022-23 financial year Support the creation of a green hydrogen and electric vehicle industry.
South Africa’s Sunday Times newspaper earlier reported on the document.
Read now: The end of the ‘bailout era’ for the SABC, Post Office and Eskom — ANC plan
Don’t miss the latest news
