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South Africa Has Failed in Its Transformation Efforts, ANC's Malema Says
South Africa, having failed to restructure its economy after apartheid, should take full control of “critical” commodities and establish a state-owned bank, Julius Malema, the president of the youth league of the ruling African National Congress, said.
“We haven’t changed the structure of the economy,” Malema told delegates at a mining conference in Johannesburg today, saying that it remains the same as during apartheid, which ended in 1994. “We have reached a point where there is a need to generate an increase in the fiscus.”
The ANC is preparing to discuss possible mine nationalization at a congress later this month after it was mooted by the youth group. South Africa has the world’s largest reserves of platinum, chrome ore and manganese. The world’s largest mining companies, including BHP Billiton Ltd., Rio Tinto Group and Anglo American Plc have mines in the country and Citigroup has valued the country’s total mineral resources at $2.5 trillion.
Laws that compel miners to sell 26 percent of their South African assets to black investors by 2014 are attracting criticism for creating a small black business elite while doing too little to spread wealth in Africa’s biggest economy.
The law should be scrapped because it impedes growth, Jeremy Cronin, deputy general secretary of the South African Communist Party, said at the conference.
The SACP seeks “genuine” empowerment, he said. “Not this sham.”
While the government has said it will establish a state mining company, Mineral Resources Minister Susan Shabangu has said the outright nationalization of mines won’t take place.
‘Call Themselves Leaders’
While unprofitable mines shouldn’t be nationalized, there should be a seizure of “critical” commodities such as steel and iron ore, Malema said today.
Claims by some “who call themselves leaders of the ANC” that nationalization isn’t party policy are wrong, Malema said, adding it has been since at least the 1940s. “We want to reactivate it so it becomes the policy of government.”
South Africa also needs a state-owned bank “which will be reasonable and can be utilized by ordinary people without being charged unreasonable amounts of money.”
Banks are “ripping us off,” he said. “They steal from us.”
It’s premature to debate nationalization as South Africa has to first develop a coherent, long-term strategy for the mining industry, said Joel Netshitenzhe, a member of the government’s National Planning Commission, at the conference.
‘Strategic Coherence’
Mining industry policy development has been delayed and is suffering from a lack of “strategic coherence,” he said.
Participation by black people in the industry needs to be accelerated, said Netshitenzhe, who was speaking in his role as executive director of the Mapungubwe Institute of Strategic Reflection, a research institute. The nation should consider developing a mechanism to ensure that the windfalls from boom times in the mining industry are shared more equitably, Netshitenzhe said.
To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net
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