Impatient Manuel berates the messenger

Perhaps it is Planning Minister Trevor Manuel's advancing age that has made him increasingly tetchy, more so than he was in his glory days as finance minister.

Ever since the umbrella incident - he is alleged to have hit a female journalist with an umbrella at the watershed ANC Polokwane conference in 2007 - his relationship with the media has been on an ever more slippery slope.

Perhaps it tracks his declining fortunes in the ruling party. After having been the most popular candidate for the ANC's national executive committee in 2002, he subsequently slipped to 57th in the ranking - out of 60 elected members - at the Polokwane conference.

Once again this week, during a briefing on the National Planning Commission appointed by President Jacob Zuma after a year of preparation, he went off. In a clear case of blaming the messenger, it was Anna Majavu's turn to be savaged.

NPC should not pander to the government

President Jacob Zuma’s endorsement of the National Planning Commission’s independence has emboldened Planning Minister Trevor Manuel.

Manuel said yesterday he would be involved in the budgeting process along with the Treasury and Finance Minister Pravin Gordhan, and he stressed that planning and budgeting always go together.

Manuel’s comment suggests he is claiming territory from Economic Development Minister Ebrahim Patel, after persistent reports of a turf battle over the past year.

Briefing the media ahead of the Presidency’s budget vote, Manuel, in response to a question, stressed that the commission was appointed by the president and had the full support of the entire executive.

NPC endorses members from business

The newly appointed National Planning Commission (NPC) got down to business yesterday, playing down complaints that business is over-represented on the 25-member panel.

When the list of commissioners was announced 12 days ago, the African National Congress’s (ANC’s) alliance partners, along with the opposition Independent Democrats, said the appointments were mainly associated with the business sector.

But NPC chairman Trevor Manuel said there was no merit in “compartmentalising” commissioners, who were appointed in their individual capacities. The commissioners, who convened for the first time on Monday, had said they did not want to be “pigeonholed” before they even started work.

National planning commission should be independent

It is encouraging to note that the much-anticipated appointment of the 25-member national planning commission has finally happened without any major controversy.

Of course there have been complaints. For instance, Cosatu has said it was concerned that the new body is dominated by pro-business experts while some in business fear that it might be "too left-leaning".

But that was to be expected because this institution - which will be responsible for formulating the national vision and long-term planning - is highly contested by competing groups.

The fact of the matter is that - after months of dithering and bickering over the powers of the commission - the body is finally in place.

National Planning Commission members

ANC heavyweight and businessman Cyril Ramaphosa, and former Eskom chairman Bobby Godsell were appointed to the National Planning Commission on Friday.

Also on the team announced by President Jacob Zuma are ANC national executive committee member Joel Netshitenzhe and Business Unity South Africa chief executive officer Jerry Vilakazi.

Making the announcement in Pretoria, Zuma said the commission would be chaired by Minister in the Presidency: National Planning Commission Trevor Manuel with Ramaphosa as his deputy.

The 24 people on the team have expertise in areas including finance, industry, telecommunications, biotechnology, energy, education, food security and climate change.

According to the presidency, the NPC will be responsible for developing a draft long-term vision and strategic plan for South Africa.

The National Planning Commission revised

National Planning Minister Trevor Manuel has reassured that the Cabinet will have the final say on policy formulation.

Manuel said the revised green paper on national strategic planning clearly stated the National Planning Commission would have no executive powers and that Cabinet would make the final decisions.

This comes amid a fierce contest between the ruling African National Congress and its alliance partners — the Congress of South African Trade Unions (Cosatu) and the South African Communist Party — over the powers the commission will have over the formulation of economic policy. It suggests Manuel and the commission would have no executive powers and play an advisory role to the government, but also that the alliance partners would not be allowed to monopolise SA’s economic policy formulation arena.

It will also take some political pressure off Manuel, who has faced claims from the alliance left that he would be an “imperial” prime minister.

Manuel said although he was confident the revised document would receive support from different sectors and organisations, not everyone would be satisfied. “There is a fair amount of support now.”

The green paper — which was first released by the Cabinet in August and approved last month following a consultative process in Parliament — dealt with the work of the commission and how it would function, said Manuel.

The document states that the first output of the commission would be to draft a Vision 2025 and a long-term strategic plan.

“The Vision 2025 will be an articulation of the type of society all South Africans would want to see in about 15 years’ time. It will set out the high-level aspirations for the nation in terms of social, economic and political development,” the document reads.

Manuel said the commission would release a draft vision and long-term strategic plan within 18 months.

The commission would also produce research reports and discussion papers on key “cross- cutting issues” that affect development. “These thematic papers will cover issues such as food security, climate change and human resource development trends and will be tabled in Parliament for discussion.”

Manuel called for the public to nominate people to serve on the 20-member commission. “We seek the best, brightest minds in our country that can use their sectoral expertise to contribute towards a broad development plan.”

Nomination forms are available on the Presidency website and the closing date is February 10. Manuel said President Jacob Zuma would announce the names of the commissioners before the end of March.

Manuel said a secretariat based in the Presidency would be established to provide technical, administrative and professional help to the commission.

Source: Business Day
Read the full text of the briefing at Times Live

ANC looks to state solution for free market

The African National Congress (ANC) says the global financial crisis presents an opportunity to think differently about economic policy and planning, signalling that possible policy changes may be in the offing.

This weekend the ANC said there was near-universal recognition that “an unfettered free- market system does not have the capacity to address serious social and economic inequalities”.

This admission by the party, for the first time since President Jacob Zuma came to power, also suggests it is willing to make concessions on the economy that its leftist allies have demanded.

The comments in its January 8 Anniversary Statement contradict assurances some ANC leaders in the party and the government have given on maintaining SA’s conservative economic policies.

The ANC calls for tighter regulation, saying “global financial markets must be regulated and governments must play an active role in the economy”.

The party was “determined” to use the space “strategically” to put in place a “more inclusive economic growth path” that addressed structural flaws in SA’s economy.

“Fundamental to the transformation of the economy for the ANC is the need to eradicate apartheid production relations and to bring about a more equitable ownership and distribution of wealth and income,” it said.

Centre for Democracy political analyst Steven Friedman said the ANC’s statement suggested there was a view within the party that believed a pro-poor policy needed to be pushed through, but he said the extent to which a shift in economic policy would occur depended on the balance of power in the ANC.

“Roughly, there are three views, one epitomised by Finance Minister Pravin Gordhan, who cares about macroeconomic stability; another group which agitates for leftist pro-poor policy; and a third group, which is bound by business links based on patronage from the state.”

Gordhan’s warning, that government revenue had declined and would affect the ability of the Zuma administration to make good on its promises, has been accepted by the ruling party.

The ANC said the global economic crisis had affected the “pace and sequencing” of delivery but pledged to take “bold steps” to mitigate the crisis.

It nevertheless recommitted itself to ensuring expenditure of the budgeted R787bn on improving infrastructure, and tailoring fiscal and monetary measures in a manner that complemented trade and industrial policies.

Zuma said there were indications SA might be recovering from the worst of the crisis but warned the recovery might be “slow” and perhaps even “temporary”.

“It should also be expected that the creation of new jobs on a massive scale will lag behind the economic recovery,” the ruling party said.

Gordhan’s warning, that government revenue had declined and would affect the ability of the Zuma administration to make good on its promises, has been accepted by the ruling party.

The ANC said the global economic crisis had affected the “pace and sequencing” of delivery but pledged to take “bold steps” to mitigate the crisis.

It nevertheless recommitted itself to ensuring expenditure of the budgeted R787bn on improving infrastructure, and tailoring fiscal and monetary measures in a manner that complemented trade and industrial policies.

Zuma said there were indications SA might be recovering from the worst of the crisis but warned the recovery might be “slow” and perhaps even “temporary”.

“It should also be expected that the creation of new jobs on a massive scale will lag behind the economic recovery,” the ruling party said.

The government’s promise to create 500000 jobs by December has become the first promise on which Zuma could not deliver. SA has already lost close to 1-million jobs and all indications are that there will be little relief this year.

Labour federation the Congress of South African Trade Unions is likely to use the opportunity to push the government to demand action on this front.

Source: Business Day

Will Johannesburg be the gateway to Africa?

When discussing the mandates of the Reserve Bank and the Treasury, interested parties should consider South Africa's and, in particular, Johannesburg's role in the African context.

Note that SA’s role as the gateway for foreign investment into Africa is not guaranteed, and even though it has an excellent platform it must not become complacent about its gateway status, global management consultancy Monitor Group, in a report Africa from the Bottom Up, has warned.

Chairman, Mark Fuller, said good gateways tended to have a systemic quality, with highly competitive cities. The opportunity was there for Johannesburg to be the gateway into Africa.
Gateway cities also had to do a lot of networking if they wanted to succeed. The Monitor study argues that cities are critical to economic development — and that the growth of Africa’s cities is one reason why the continent may finally be at a turning point.

Monitor argues that it is not countries, but cities, that compete globally, and economic policy makers must note that. But the subcontinent is not spending nearly enough to build the infrastructure needed to establish its cities firmly, and this undermines sustainable long-term growth.
Middle-income countries, such as SA, should be spending about 10% of GDP, while low-income countries should be spending as much as 20%. The report says public-private partnerships are “one of the most important models for governments struggling to close the infrastructure funding gap and improve productivity and services”. And it emphasises that foreign direct investment is crucial to finance infrastructure and develop competitive cities.

Fuller said Africa offered much better returns on foreign investment than did India or China, and that private sector flows to the region had surged in recent years. The region’s two largest economies, SA and Nigeria, together received more than half the investments studied. However, the report said what was striking was the fact that the quantity of foreign investment flowing into SA was so scanty given the country’s standing as sub-Saharan Africa’s most mature economy.

Perhaps economic policy makers such as the National Planning Commission, the Treasury and the Reserve Bank could develop a new national strategy for the financial system to enhance SA's and Johannesburg's competitiveness and economic growth through financial sector policy reforms which would expand the banking sector to the unbanked, increase employment, and reform monetary policy.