South Africa’s governing party urges state to focus budget on jobs as support drops

 

South Africa’s African National Congress (ANC), the nation’s governing social democratic political party, will press the government to prioritize creating jobs and alleviating poverty in the national budget, Gwede Mantashe, the ruling party’s Secretary-General has said.

“It can’t be business as usual,’’ Mantashe told reporters in the country’s capital of Pretoria, on Sunday after a national executive committee meeting to discuss the ANC’s weaker performance in municipal elections this month.

“To effectively deal with the triple challenge of unemployment, poverty and inequality, government in the coming cabinet lekgotla must reprioritize the budget’’ to ensure National Development Plan (NDP) programs are funded, he said.

The ANC is seeking ways to reverse a decline in support after this months recording its worst performance in an election since Nelson Mandela led the party to power to end apartheid in 1994. It won 54.5 per cent of the popular vote in the August 3 municipal ballot, down from 62.2 per cent in a national election two years ago. It also gave up outright majorities in four of the country’s eight major cities, Bloomberg reports. The NDP is the government’s 20-year plan to boost economic growth and slash a 27 percent unemployment rate.

The poor performance in the election was a ‘‘serious setback’’ for social transformation and the party’s leadership agreed to take collective responsibility for the drop in support, Mantashe said. The party “resolved to take immediate and bold actions to address the weaknesses and shortcomings that led to the decline of our electoral support,” he added.

The NDP was released in 2012 as the government’s proposals to accelerate economic growth, create jobs and attract investment. The central bank projects growth will be flat this year. President Jacob Zuma’s cabinet will hold a four-day meeting, known as a lekgotla, this week to discuss the economy and other national issues.

“For a long time we have been talking about the lax attitude toward the implementation of the NDP, but now there are consequences where they’ve lost municipalities, now they want to talk to Treasury to finance the NDP,” Ralph Mathekga, a political analyst at the Johannesburg-based Mapungubwe Institute for Strategic Reflection, said by phone. “That is why this budget rhetoric is coming out and with a very populist posture.”

Finance Minister Pravin Gordhan has pledged to keep spending under control, cutting South Africa’s budget deficit to 2.4 percent of gross domestic product in three years from about 4 percent and to limit debt to less than 50 percent of GDP.

Fitch Ratings, one of the world’s top three credit ratings agencies, warned that the results of this month’s vote could push the ANC to turn to more populist policies to redress voter dissatisfaction.

Fitch and S&P Global Ratings, which both have South Africa’s credit rating at one level above junk status, have cited the nation’s increasing debt as a risk to the ratings. Coalition talks to control cities including Pretoria and Johannesburg are continuing among parties including the opposition Democratic Alliance and the Economic Freedom Fighters. They have until August 20 to form governments in a total of 27 hung councils across the country, says Bloomberg. The ANC controls three of the eight main cities outright and won the most votes in Johannesburg, the biggest city, and industrial hub neighbor, Ekurhuleni, while falling below 50 per cent support. The DA is the largest party in Pretoria and Nelson Mandela Bay and has an outright majority in Cape Town.

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