Research analyst at Nomura, Peter Attard Montalto, says that nothing new or unexpected came out of the ANC’s policy conference which came to close on Wednesday – but then, it was never really about policies to begin with.
According to the analyst, despite a few resolutions putting people on edge – like the call for the Reserve Bank to be nationalised, or president Jacob Zuma’s supporters pushing increasingly populist policies on commissions – this past week’s policy conference had little to do with actual policy.
Instead, as predicted, it ended up being a battle of ideologies and posturing between various factions within the ANC, looking ahead to the party’s elective conference in December.
On the surface, many are considering the conference a ‘win’ for those who support Cyril Ramaphosa’s bid for presidency: ‘white monopoly capital’ was shot down, and the faction managed to successfully pass the tabling of an investigative document that painted Zuma in a bad light.
On the front of land, macroeconomic policy (with the SARB especially) and transformation in the financial sector, Zuma’s faction came out more successful, surprising even his opponents with how organised it was.
The conference wasn’t about winning or losing
Attard Montalto said that the talk of winners and losers fundamentally misunderstands the political purpose of the conference, however.
“Ultimately the leadership election (in December) has nothing to do with policy but only raw political power,” he said.
“Consider this – what is the point of winning now? What is the point of buying votes for the policy conference only to have to do so again for December? In this regard, we think it is important not to read too much into the NPC.”
According to the analyst, the Zuma faction was never attempting a wholesale rewrite of ANC policy in the first place, which became apparent in the obtuse nature of the policies actually debated.
Taking ‘white’ out of ‘white monopoly capital’ is effectively meaningless, as both factions acknowledge that capital is largely white-owned in South Africa. And the difference between ‘radical economic transformation’ and ‘radical socio-economic transformation’ is also tenuous.
“It seems to us to be saying exactly the same thing,” Attard Montalto said.
Nothing new, but some things to watch
Attard Montalto said that he struggled to see anything particularly new, or different as a means to help South Africa out of its low growth trap.
“(There’s) no real plan for the ANC to move on from the Zuma era and put state capture behind it, nor deal with corruption or patronage in any concrete or implementable way. Only platitudes are offered on this.”
“When you are looking to win on raw political power, what’s the point in getting lost in issues. Herein we can again see Jacob Zuma’s long-standing operating procedure, where he effectively turns the ANC’s way of doing things against itself.”
Despite very little in the way of actual policy, Attard Montalto pointed out there were several outcomes that should be watched:
- A change to the ANC constitution to make clear that MPs’ loyalty is to the party. This flies in the face of the recent constitutional court judgement that delineated MPs’ responsibilities, and solidifies a long-standing mind-set in the ANC that it is above the constitution.
- Nationalisation of the SARB’s equity capital. While this has been on the agenda for some time it clearly fits into a different political context now after the Public Protector’s report. Nomura says it is more symbolic, but indicative of things to come.
- Prescribed assets are now more firmly on the agenda with a request from the NPC for the ANC to bring forward a proposal on this matter.
- An expansion of social grants up to 21 years old, though the ANC admitted it has done no costing on this.
- Faster financial sector transformation, though no specifics have yet been given, and therefore there is concern in the medium run about a copy paste of the mining charter (with added credit extension of targets). There is more pressure now on setting up a state bank, faster.
- There has been no agreement on the issue of land and has been thrown back to the branches. The NPC has been split between the need for a change of the constitution and more rapid movement within the existing constitutional framework. It seems suggestions of a referendum have not gained a majority. December will therefore be important on the policy front.
- A new veterans ministry and a pension for veterans (which is seen as keeping MKVA on board).
The NPC only makes policy recommendations to the December conference and, historically, elective conferences ultimately vote to adopt the policies of whoever wins the day.
With the Zuma camp still controlling most of the voting power, South Africans should expect further shifts to populist rhetoric leading up to the elections.