South Africa's ANC eases investor angst

South Africa's ruling ANC did not sound much like a revolutionary movement of the political left at its party conference this week. Slapping down members' demands for mine nationalisation, the seizure of white-owned farms and a supertax on business, party leaders railroaded through a distinctly pro-business message. Wholesale nationalisation was said to be "off the table," the language on taxes was vague and there was a similarly opaque promise to move forward on land reform. Worse for the left, President Jacob Zuma threw his weight behind the much criticised National Development Plan, which would thoroughly modernise the economy and government if implemented. The ANC's resolutions were "a Christmas tree of gifts to appease both business and the masses, but it's short on real specifics," said Renee Horne, an expert on black economic empowerment and a guest blogger for africanarguments.org. Still, a rhetorical defeat for the left-wing of the party seemed to always be on the cards. With credit ratings agencies threatening further downgrades, President Zuma set the tone for the conference on the first day by pledging allegiance to a "mixed economy." That theme continued through policy resolutions and with the appointment of multimillionaire Cyril Ramaphosa as deputy head of the ANC, making him Zuma's heir apparent. While once a leader of the National Union of Mineworkers, he is now a bona fide capitalist, owning the local franchise rights for McDonald's and Coca-Cola among other things. "Economists have interpreted the former trade union leader's appointment as favourable to investment and the economy," said Horne. Leading industry lobby group Business Unity South Africa (BUSA) commended the ANC for "strong signals" that would make policy more predictable. But the political and economic challenges facing Zuma's government are immense and few are under any illusions that progress in developing a more equitable economy will be quick or easy. After 18 years of democratic rule unemployment is still around 25 percent and South Africa is still one of the most unequal countries on earth. Growth has been dramatically slowed by labour market unrest, most notably in the mining sector. Corruption is rampant and the public education and health systems are abysmal. "There will certainly be no easy walk to socio-economic freedom," Zuma told delegates and the country on the final day of the conference. And if Zuma is to push through a more pro-business agenda, he will have to contend with both members of his party and the tripartite alliance which the ANC leads. The ANC is very much the primus inter pares of the governing alliance with the South African Communist Party and the union umbrella group COSATU, but the relationship is symbiotic and membership often overlaps. On Friday COSATU pointedly said it would continue to press for "policies explicitly aimed at redistributing income, radically raising incomes of the working poor, and reducing inequality." Previous attempts to push through the National Development Plan have been stalled by hostile ministries and regional officials. The delicateness of Zuma's ideological and political balancing act was laid bare on Friday by Ramaphosa himself, when he sounded much more like the traditional ANC -- "a disciplined force of the left." "The approach is set out: people shall share in the wealth of South Africa," he told a business breakfast in Bloemfontein. "The ANC must see to that and the state would intervene," even if the focus is on "strategic" rather than "wholesale" intervention. Still Zuma's actions at the conference appear to have been enough to make the ratings agencies and investors hold fire. In a statement Moody's said it "reserves judgment on how the conference decisions will affect South Africa's Baa1 sovereign rating and negative outlook." Moody's and others are now waiting "until there is greater clarity on some of these details." They are not the only ones.