The ANC's absurd policy contradictions

John Kane-Berman says the party continues to diligently chase quite incompatible goals

It took a long time, but one of the things that helped to destroy apartheid was its policy contradictions. The most ludicrous among many was that you could run a modern economy while denying the majority of the workforce decent education and collective bargaining rights, let alone political rights.  

The African National Congress (ANC) is busy with some equally absurd policy contradictions. The dominant one is that you can generate "inclusive growth" while waging war against "white monopoly capitalism". A contradiction within this contradiction was on display last week at the ANC's national policy conference.

Speaking for the benefit of business leaders there, Jeff Radebe, head of ANC policy and minister in the Presidency, urged the speedier implementation of the National Development Plan (NDP). Investment, he said, needed to be lifted from its current level of 19% of GDP to 30% by 2030. The NDP itself said that the country's "crumbling" infrastructure needed "urgent" fixing.

Also talking to business, the ANC's treasurer general,  Zweli Mkhize, said the government was ready to invest R3 trillion in infrastructure. However, it would do so only when the construction sector was "transformed". So the "urgency" of which the NDP spoke nearly five years ago was not so urgent as to supersede the ANC's racial agenda. In the meantime we have had further "crumbling".  Quite an admission by Mr  Mkhize that: infrastructure was allowed to "crumble" further as a matter of policy. 

Yet another speaker at the conference, Ebrahim Patel, minister of economic development, said that the "big construction companies will [soon] be 100% owned by blacks". In the meantime, confidence indicators for the building industries are on the slide. The most optimistic has dropped to 36 on a scale of 0 to 100. Nedbank's monitor of announced capital  expenditure projects, private as well as public, valued them last year at less than R90 billion, against eleven times that figure in 2006.

No wonder the big white construction firms are getting out. According to the Financial Mail, the government has been "starving them of significant infrastructure projects." Murray and Roberts, for example, has sold its southern African infrastructure and building businesses to an empowerment consortium for a "scant R314 million". Altogether seven major companies recently struck a "voluntary" black economic empowerment deal with the government to sell off large chunks to black firms and/or mentor black firms.  

One of the signatories to the deal, WBHO, said government and all stakeholders "can be assured that the trillions of rands of infrastructure spending in years to come will be largely executed by black-owned companies".  

These companies may not be browbeaten as their white parents were. But they will face other challenges. One is that national, provincial, and local government, as well as state-owned enterprises, are able to operate efficient tender processes. Another is that those winning government tenders get paid on time. A third is that they will not fall victim to government criminality. And a fourth is that the "trillions" actually materialise.

Investment last touched the 30% target in 1977. Today almost two thirds of all investment is accounted for by the private sector. Mr Mkhize told the ANC conference that almost R700 billion remained in the banks. He asked what it would take for the private sector to "invest that money in our economy". Part of the answer would be to stop bludgeoning the mining industry. Another would be to eradicate corruption and skulduggery.  

The ANC will eventually discover that you cannot wage war against business and then expect it to invest. If they wish to survive, the new black construction companies may find themselves having to drive this message home, repeatedly, even though it will take years for it to sink in. Otherwise, they may start to envy the white companies that got out. Having exited South Africa, "white monopoly capital" may have the last laugh – from outside our borders.   

* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. His memoirs, Between Two Fires - Holding the Liberal Centre in South African Politics, were recently published by Jonathan Ball.