Radical reform needed
DEPUTY President Cyril Ramaphosa, while addressing the Black Business Council in Sandton, said: “It is about giving effect to the demand of the Freedom Charter that the people shall share in the country’s wealth.”
He came out in defence of radical economic transformation, saying there was nothing abstract about it.
It is an absolute disgrace that our leaders continue to denounce “white monopoly capital”.
In reality, it is “white monopoly capital”, like the World Bank and The International Monetary Fund, that financed and sustained Eskom, South African Airways, Koeberg and many other massive industrial projects, creating millions of jobs for hungry South Africans. It was “white monopoly capital” that created scores of black billionaires.
During the formation of the Freedom Charter, many members censored the many demands for “socialism” which flowed in.
One of those who brought the nationalisation clause as a resolution from the Cape, later recalled a bitter struggle, not only by ANC leaders, but also by leading “communists”, to prevent its inclusion in the charter.
At the ANC Natal conference in 1955, a resolution criticised the nationalisation clause on the grounds that it “creates the impression that something will be taken away from someone” (maybe the “haves”, and given to some other person maybe the “have nots”).
We would prefer something like this: “Shall be shared equitably among all people.”
Nelson Mandela, too, took this line publicly in 1956. He repeated it at the famous Rivonia Trials in the 1960s.
Reflecting similar views, Albert Luthuli insisted in a statement prepared for the trial that the ANC did not favour abolition of private ownership of the means of production during preparations for the treason trial.
A leading communist party member, Jack Simons, supported the Luthuli/ Mandela interpretation of the Freedom Charter.
He stated that it did not call for public ownership of the means of production, and that it contained no suggestion of a transition to a classless and socialist society.
A recent eight-page proposal put forward by Professor Chris Malikane extolling the virtues of nationalising the banking, mining and insurance industry is extremely worrisome.
He is the new economic adviser to Finance Minister Malusi Gigaba. In the aftermath of the 2016 municipal elections, the ANC held a political post-mortem on their disastrous bid to retain power.
Within the inner sanctums of the ANC, a strategy was probably devised to regain lost ground before the general elections of 2019.
Nationalisation was probably discussed to lure voters back into the fold. The ANC is aware that it might be defeated in 2019. Any radical reform must be formulated before December 2017, when a new ANC president is appointed.
President Jacob Zuma recently spoke about a new economic transformation that could serve as a catalyst for implementing nationalisation. It would be pushed through Parliament, where it enjoys a substantial majority.
The cost of nationalising the concerned institutions are staggering. Its ramifications will destabalise southern Africa and set in motion a change of events that could shatter the economic wellbeing of Africa.
It would cost R1 trillion to nationalise the mines and about R600 billion to purchase a 51% stake in the mines.
The South African banking sector has been ranked third out of 148 countries in the 2013/4 world economic forum global competitiveness survey. We have 17 registered banks, and two mutual banks, whose total assets are worth R5 trillion.
The South African insurance industry represents one of the most advanced in the world. Their assets are worth about R2.5 trillion. Nationalising these institutions will cause a political earthquake whose dire consequences are too ghastly to contemplate.
The entire sub-continent will suffer the consequences of radical politically driven economic transformation.
Nationalisation is not a panacea for South Africa’s developmental changes. FAROUK ARAIE
Benoni