SOEs remain critical economic levers - ANC NEC

Party also says strengthening of the State Owned Mining Company should continue as part of the objective to intervene in the mining industry


27 July 2015

The African National Congress (ANC) convened its mid-year Lekgotla at the St. Georges, Hotel, Tshwane from the 24th to the 26th July 2015.

The Lekgotla was preceded by an ordinary meeting of the National Executive Committee (NEC) on the 23rd July which met to, amongst others, consider preparations towards the NEC Lekgotla. The NEC meeting considered report of the National Working Committee (NWC) to the NEC.

The NEC received a report on the Alliance Summit and resolved that a programme must be developed for Provinces and Regions to hold their own summits to take forward the programme started at the national level.

NEC further considered reports on the preparations for the upcoming conferences of the ANC Women’s League and the ANC Youth League to be held on the 5th – 8th August 2015 and 4th – 6th September 2015 respectively.

The NEC expressed comfort in the progress made in stabilizing the Nelson Mandela Bay Municipality, however it was noted that much more work still remains to be done. The Western Cape Province recently held its Provincial Conference; NEC congratulated the province for a successful conference.

On the NEC Lekgotla

The NEC Lekgotla was convened to assess the progress made in improving the quality of life of our people, the working class and particularly the poor. It was attended by members of the NEC, Alliance Partners, Ministers, Deputy Ministers, Mayors of Metros and other municipalities and other deployees in all three spheres of government. It followed the January 2015 Lekgotla where the NEC identified and confirmed the priorities for the term ending in 2019.

This Lekgotla therefore sought to interrogate the extent to which our call, to every public representative and government department to move swiftly and with speed to implement programmes as a means to address the needs of our people, was being realised.

The Lekgotla emphasised the urgency of this call. We further sought to interrogate the capacity of the state and a sense of how resources are allocated to the priority areas we identified. We considered the capacity of the state to drive our programme of fundamental transformation; particularly given the volume of work that is still driven by consultants.

We agreed that building and strengthening of the capacity of the state needs constant and focused attention, including the identification of young talent to take forward our aspirations. Should we fail to build this capacity, we will continue to complain about lack of implementation.

Lekgotla noted that the economy is growing at a disappointingly low rate. There has also been a worrying increase in the number of retrenchments in key sectors. Energy security continues to be a constraint. Consequently, the following resolutions were taken by Lekgotla to form part of the input into the Cabinet Lekgotla commencing today:

1. Manufacturing is a key sector for re-industrialisation at the heart of our economy. We must be able to quantify the impact of the investments government is making in this regard.

Lekgotla called for more effective use of the Industrial Development Zones. These should be the drivers for the creation of Black Industrialists.

The State Owned Companies (SOCs) remain critical economic levers of the developmental state. They must be optimally used to improve economic infrastructure and increase economic growth. The state must be in a position to initiate and give life to catalytic sectors. In this regard, together with private sector investment, SOCs must shape and drive economic growth.

Lekgotla made a call to government to urgently attend to all apparent crisis points within the SOCs.

South Africa remains a mineral driven economy, based on amongst others industrialisation through beneficiation and foreign earnings. Lekgotla noted the decline in the commodity prices across the sector. While we appreciate that the price of minerals is inherently cyclical, we also noted that the decline of the demand for steel in the Chinese market and the dumping of cheap steel in SA, is impacting negatively on our economy.

Lekgotla however called for caution in the manner in which mining companies react to these challenges. It is concerning that their response has been the cutting of jobs; which instead of resolving the challenges is deepening the crisis. Those companies that have already announced possible retrenchments are called upon to review their plans and avoid massive job losses as such would lead us further into crisis.

The strengthening of the State Owned Mining Company should continue as part of the objective to intervene in the mining industry and thereby radically transform the mining landscape of the country.

Lekgotla received an assurance that Medupi’s Unit 6 will be fully commissioned in August 2015. Lekgotla expressed a desire that this date will not be shifted again.

Discussion on the minimum wage must be speedily concluded and the contestation of space between higher earnings and the absorption of the majority of people into employment must be discussed and solutions should be found

 Lekgotla reaffirmed the fact that Agriculture has potential to make a massive contribution to economic growth. Additional resources must be allocated to this area in order to allow it to fulfil its potential role. Government must focus on both commercial and subsistence farming as the latter is also critical to food security.

Significant improvements have been made in our priority areas of Health and Education. Lekgotla has called for the finalisation of Free Education Policy for poor students at undergraduate level as a matter of urgency. It called for the ring-fencing of a portion of NFSAS to fund specifically scarce and critical skills.

We further agreed on intensifying efforts aimed at nation building and social cohesion. Each department of government must have a contribution in this regard. Amongst others, the Back to Basics must be elevated from a purely local government programme to the philosophy that guides government at all levels in the execution of its mandate.

As we celebrate 15 years of democratic local government, this year, Lekgotla was emphatic that more must be done to correct the weaknesses in local government. While the improvement in the audit results in this sphere of government must be appreciated, delivery of basic services remains a concern particularly in areas of water and sanitation, electrification and housing.

All these issues will be subject to further discussion and refinement by the Cabinet Lekgotla.

Statement issued by Gwede Mantashe, Secretary General: African National Congress July 27 2015