EDITORIAL: ANC economic resolutions welcome though dogged by overhang of uncertainty

As the ANC concluded its 55th national conference and embarked on its 111th birthday celebrations, President Cyril Ramaphosa made much of the party now being on a clear path to renewal.

But while the governing party might have committed to renewing itself and clearing out the rot that has seen it decline, it was less clear that it is coming up with much new thinking on SA’s “chronic poor economic performance”, as the party called it. 

Ramaphosa acknowledged in the party’s annual January 8 statement that the energy crisis was undermining growth and investment and that the economic tough times were making life difficult for households as well as undermining democracy. But the policy resolutions coming out of the conference were a mixed and sometimes disturbing bag, which offered little by way of innovative approaches to SA’s big economic challenges.

The conference and the anniversary of the ANC’s founding were always going to be more about the party than about policy. And many in the markets were watching the politics, in particular whether the ANC would stick with its “step-aside” resolution, more closely than they were watching the economic policy resolutions. These seem in any event to have merited little attention from delegates to the conference. And it is perhaps a measure of how low on the list of the party’s priorities the resolutions are in general that even by Sunday the final versions had yet to be made available. Even so, the draft resolutions published last week give some indication of thinking that can be expected to influence government policymaking in the year to come.

On the upside, it was clear that economic sense continued to prevail in some areas, with some of the more controversial resolutions carefully hedged. The basic income grant is on the list as expected, as one of the social transformation resolutions rather than an economic one. But while the party has called for the grant to be introduced to address poverty and inequality, it directs government to work on an acceptable version through broad consultation. That could take a while. And importantly, the fiscal resolution cautions against running up the public debt.

A welcome feature of the draft resolutions is a recognition of how important it is for the economy that the government step up law enforcement and intelligence and combat the destruction and looting of public infrastructure. Welcome too is that climate change and the need to decarbonise SA’s economy are now on the party’s agenda and list of resolutions, with the caveat that this must be just and must minimise damage to communities or disruption to the economy.

Where it gets slightly concerning is when it comes to energy security and load-shedding. The party’s resolutions on this say many of the right things. Eskom’s own generation performance must be improved, plus new generation must be fast-tracked. Urgent decisions are needed on upgrading SA’s transmission infrastructure so that new renewable energy generation, and other generation projects can be connected. Eskom’s debt must be addressed. Just transition plans must be developed and just transition investment mobilised. We must develop electric vehicles and the hydrogen economy. And so on.

Strikingly, however, there is no explicit mention of encouraging private sector investment in generation nor of the need to open up the market to new private sector players, including those who urgently seek to generate for their own use. Gas and nuclear and the need for oil and gas exploration feature prominently. This is even though, strikingly, there is no mention of the need for the government to do a lot more to attract mining exploration, nor indeed much mention of mining at all — except in respect of the need for SA to have a “green” minerals strategy.

It’s clear from the resolutions and even clearer from comments by some ANC and alliance partner leaders in recent days that the alliance is not about to give up its commitment to coal. The bottom line then is that the intense contestation within the government over the energy transition and over new private sector renewable energy generation is set to continue. That can only create uncertainty and hurdles to addressing SA’s energy crisis.

Other economic policy resolutions could continue to create uncertainty too, be they on land, or the basic income grant or the nationalisation of the Reserve Bank. They may or may not ever happen. But the overhang of uncertainty cannot be good for confidence and investment.