Zuma Pushes South Africa Growth Plan Amid Investor Concern
South African President Jacob Zuma urged the ruling African National Congress to back a 20-year plan to expand the economy and create jobs, downplaying the need for radical policy changes as concern from investors mount.
The National Development Plan, drawn up by an advisory panel led by ex-finance minister Trevor Manuel, sets out the investment needed in roads and rail projects, health, education and other services to boost growth in Africa’s biggest economy. The program calls for a review of labor laws to encourage hiring and create 11 million new jobs by 2030.
“It is easy to lose sight of our vision and strategic priorities, in favor of short-term solutions,” Zuma said in his opening speech to the party’s national conference in the central city of Bloemfontein. “Having a long-term blueprint creates certainty about where we are going and how we intend to get there.”
Zuma is running for a second term as leader of Africa’s oldest political movement and non-binding nomination votes show he should win easily, with labor unionist-turned tycoon Cyril Ramaphosa as his deputy.
At an ANC policy conference in June, Zuma said “radical” policy changes were needed to address the country’s challenges. He has since toned down such calls as the government seeks to revive investor confidence in an economy battered by a wave of strikes and two credit-rating downgrades.
“We want to dismiss the perceptions that our country is falling apart because of the downgrades,” Zuma said today. “The ANC will continue to provide strong economic leadership and steer our economy boldly, and we do have a plan to grow the economy and create jobs.”
Zuma prefaced his speech with a song dedicated to Nelson Mandela, South Africa’s first post-apartheid president, who’s been hospitalized since Dec. 8 for a lung infection and to have gallstones removed. The 94-year-old Mandela was being well cared for by a competent medical team, Zuma said.
Eighteen years after the end of apartheid, the ANC-led government is struggling to cut a 25.5 percent unemployment rate and income disparities that rank among the highest in the world. South Africa’s labor laws are often cited by companies, including AngloGold Ashanti Ltd. (AU), as too restrictive, undermining job creation.
The planning commission recommends that pay increases be linked to growth in productivity and wage flexibility should be considered for first-time job seekers, a proposal rejected by labor unions. The plan sets targets for cutting unemployment to 14 percent by 2020 and 6 percent by 2030, increasing the share of national income earned by the poorest 40 percent of the population to 10 percent from 6 percent and raising per-capita income to 120,000 rand ($14,620) from 50,000 rand.
Meeting those goals will require average economic growth of 5.4 percent a year until 2030, the commission estimates. The central bank forecasts growth of 2.5 percent this year and 2.9 percent in 2013.
Zuma made no mention of a push by the ANC’s youth wing to nationalize the country’s mines or proposals made in a party- commissioned study to increase taxes on mining companies.
In a Dec. 4 interview, Enoch Godongwana, head of the ANC’s economic transformation committee, said the party would back increased levies because it must ensure the lives of poor black South Africans improve or risk “an uncontrollable revolution.”
While Ramaphosa today refused to say whether he will contest the post of deputy president, Derek Hanekom, a member of the ANC’s National Executive Committee, told reporters Ramaphosa had accepted the nomination.
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