The ANC special National Executive Committee meeting concludes ‒ without decisions on SA’s economic woes

SOUTH AFRICA - Report 01 Oct 2019 by Iraj Abedian

Over the past weekend, the African National Congress (ANC) held its National Executive Committee (NEC) meeting, deliberating over Finance Minister’s recently released recovery plan (which has caused divisions in the party), with discussions about the ailing economy at the top of the agenda. Indeed, the economy continues to bleed, marred by the increasing unemployment rate, poor state of municipalities, over-indebted state-owned entities, looming retrenchments in the mining and banking sectors, as well as the increasing social instability. As such, Mr. Mboweni (Finance Minister) expressed his concerns over growth losing momentum and tax revenue that has disappointed even with tax rate increases (including the VAT increase).

Government finances remain under pressure, with state-owned enterprises (SOEs, especially Eskom) currently looming large and therefore posing huge risk to economic stability as well as fiscal sustainability. Furthermore, e-tolls, the proposed National Health Insurance, and the Road Accident Fund were also cited by the Finance Minister to be placing pressure on the fiscus. So, in his quest to find measures to help revive the economy, the Finance Minister remained stern about his plans of selling state-owned companies, curbing collective bargaining, promoting high skilled immigration, boosting competition in key economic sectors such as energy and transportation, as well as enhancing performance of labor-intensive sectors (agriculture and tourism). However, the ANC NEC decided that it would further discuss Finance Minister Tito Mboweni's proposed economic reforms report at its yet-to-be planned alliance political summit. Clearly, the NEC fears political push back from its alliance members (i.e. COSATU and SA Communist Party) who have been hostile on grounds of being left out from the policy-making processes.

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