Factbox: South Africa's ANC ponders policy reforms

JOHANNESBURG Tue Jun 26, 2012 11:51am EDT

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JOHANNESBURG (Reuters) - South Africa's ruling African National Congress (ANC) is holding a major policy meeting this week to discuss plans to transform the continent's largest economy, which the party says is still largely controlled by whites.

The following are the main topics of debate:

SUCCESSION

Although this is described as a policy meeting, the focus will be ANC elections at the end of the year where President Jacob Zuma seeks a fresh term as leader of the party that dominates South African politics. It appears likely Zuma will win the party election, setting himself up for a second term as the country's president, and stay in office until 2019.

Likely challengers, including Deputy President Kgalema Motlanthe, will be seeking to line up support from several thousand local delegates who wield the greatest weight in electing ANC leaders.

MINING

ANC leaders have effectively squashed calls from within the party to nationalize mines in the world's largest platinum producer. They have brought to the meeting a plan called "State Intervention in the Minerals Sector" aimed at having mining firms pay more taxes and fees to help finance welfare spending.

Items to watch are:

- A "resource rent tax" - effectively a windfall levy - of 50 percent that will kick in after investors have made a "reasonable return".

- Moves to have concessions on prospecting rights decided by a structured bidding process and having an independent commission regulate and grant mining rights. The current system often favors those who get their bids in first.

- The granting of preferential mining rights to a state mining company. This could hurt private firms.

MORE GOVERNMENT CONTROL OF THE ECONOMY

A central theme in planning documents for the conference is the need for the government to take more control of the economy to help millions living in poverty.

Items to watch:

- The fate of telecommunications firm Telkom. The government blocked a bid from South Korea's KT Corp. to acquire a 20 percent stake in the firm and may be looking to nationalize Telkom - making it the centre of an internet build out.

- How the ANC moves on National Health Insurance. The government wants to push almost all South Africans into a national health plan estimated to cost 255 billion rand ($33 billion) when fully implemented by 2025. The plan has been slowed down because of the high costs.

- There are some calls in the ANC to nationalize banks but this is seen as unlikely.

OTHER PROPOSED REFORMS:

- Land Reform. The ANC would like to turn over a greater percentage of white-owned farm land to blacks dispossessed under apartheid. But this process has been slower than expected, with the party seeing the current "willing buyer-willing seller" model as not strong enough to effect rapid change.

- Pension Plans. The ANC could be considering moving more monies from state pension funds into investments in state-owned-enterprises and Africa-wide development funds.

- Youth wage subsidy. This is a plan backed by the government and the main opposition party to help employers finance the costs of taking on young and inexperienced workers. The ANC's governing alliance partner, labor federation COSATU, objects to the plan, saying it will be exploited and used to push out older workers.

(This version of the story has been corrected to fix typo in first paragraph)

(Reporting by Jon Herskovitz; Editing by Pascal Fletcher and Andrew Heavens)

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