21 December 2012
Carol Paton and Mariam Isa
How Zuma persuaded ANC to drop the ‘N’ word
THE African National Congress (ANC) has ditched the concept of "strategicnationalisation" in favour of "strategic state ownership" after an 11th-hour interventionby President Jacob Zuma.He told the drafters of the party’s economic policy resolution at its conference inMangaung to remove the word "nationalisation" — a bold effort to restore policycertainty for investors and turn around South Africa’s flagging credit ratings. An attempt by the ANC Youth League to have the word reinstated when theresolution was presented to conference delegates on Thursday, failed."The state will increase state ownership in strategic sectors where deemedappropriate, on the balance of evidence ," the resolution read.The state would further increase its participation in the mining sector through equity,using the state-owned mining company as its vehicle.The resolution implied that there will be higher taxes for the mining industry, but didnot specify what form these might take. It said the state should "capture an equitableshare of mineral resource rents and deploy them in the interests of long-termeconomic growth, development and transformation".Enoch Godongwana, chairman of the ANC’s economic transformation committee,told a media briefing this could take the form a resource rent tax, a "windfall tax" onsuper profits or another, unspecified, measure. "There will be a tax, what form it willtake has not been decided."The resolution further raised the prospect of export taxes on designated "strategicminerals" deemed important for industrialisation or as key inputs into downstreamproducts. Among those in line for designation are iron ore, coal, base metals andgas.The party said it wanted to assure investors that "nationalisation was off the table"."The national conference has refused to be drawn into the (use of) the wordnationalisation," said Public Enterprises Minister Malusi Gigaba. "This means that theissue of nationalisation, that we have discussed over the past few months, is off thetable."We are providing final clarity. There shouldn’t be any expectation from here that wewill come out and say we are going to nationalise."