THE ANC launched a fierce attack on two of the country’s blue-chip groups this week, accusing Anglo American Platinum (Amplats) of theft and First National Bank (FNB) of playing the role of an opposition party by attacking the government through “random and untested accusations”.
ANC secretary-general Gwede Mantashe’s denunciation, after similar outbursts by Mineral Resources Minister Susan Shabangu, the ANC and the ANC Youth League in the past two weeks, heightens uncertainly over policy and hits investor confidence, according to economic commentators.
While President Jacob Zuma and Finance Minister Pravin Gordhan were trying at the World Economic Forum in Davos to calm investors’ fears, fuelled by recent ratings downgrades, labour and civil unrest and slowing economic growth, Mr Mantashe threatened that the government would take a “bigger interest and control” of the mining sector.
Mr Mantashe said Anglo, “built on the back of South African capital and labour”, had “stolen our money” as it moved its primary listing to the London Stock Exchange. Anglo’s share price fell more than 2% on Tuesday and the rand to its lowest level against the dollar in more than four years on Wednesday.
Ms Shabangu threatened to take over shafts and review all Anglo mining rights. The ANC said Amplats had undermined government plans to create jobs and its mothballed shafts should be auctioned off.
Foreign direct investment (FDI), a crucial source of funding to address infrastructure backlogs and support the rand, was 43.6% lower in the second half of last year than in the previous corresponding half, said Lullu Krugel, senior economist at KPMG. While FDI can be volatile, “bureaucracy and labour market constraints are two of the biggest concerns for international investors looking at South Africa”, she said.
On Thursday, Reserve Bank governor Gill Marcus said: “In the absence of coherent and consistent structural policy initiatives, economic growth is expected to continue well below what is possible and required to make significant inroads into unemployment.”
On Friday, Mr Mantashe said the ANC was not against business, but “rules should be followed” and business “should be coming to the table to work together on challenges facing the country”, including unemployment, inequality and poverty.
He said ANC interactions with FNB and Amplats were with individual companies and did not reflect the state of its relationship with business in general.
“Individual businesses should do things the right way,” he said.
Vukani Mde, senior consultant for Southern Africa at Africapractice, said the reaction to FNB’s advertising campaign was political and highlighted symptoms in the country instead of addressing root problems. Amplats was an economic issue and should be viewed separately.
“The ANC’s reaction to Amplats is driven by an acute awareness of the unemployment problem and the ANC’s promise to create five million jobs by 2020. These retrenchments are a bit of a slap in the face for the ANC, particularly because the ANC’s plans place the mining industry at the centre of job creation in this country,” he said.
“There is an existential angst within the ANC about its ability to meet promises to the electorate,” Mr Mde said. “The feeling from the ANC is that business is not coming on board, while the party is helping business.
The ANC came out of Mangaung still congratulating itself for snubbing proposed policies around the nationalisation of mines, just to be rewarded with the Amplats retrenchments. They feel there is a lack of reciprocity from the side of business and they will find it harder and harder to justify their middle-of-the-road economic policies to their supporters.”
Neren Rau, CEO of the South African Chamber of Commerce & Industry, said the government often did not appreciate the objectives of businesses, the constraints in which they operated, their accountability to shareholders and their longer-term perspective.
An uncertain policy environment did not help business, said Mr Rau. While there was pressure to create more jobs, the government also enforced stricter labour regulations, sending mixed messages to business, he said.
“We need to stop dancing around each other and find commonality or our outlook for 2013 will be the same as for 2012. To improve the economic climate will require a lot more than talking; sacrifices will have to be a lot more broad-based and we will need to make some hard decisions,” Mr Rau said.
“Labour will need to hold back on wage demands, business will have to take their resources and risk expanding in the current environment, and government, as the third party, needs to take some bold policy steps to provide support and incentivise job creation.”
This week’s outcry against FNB’s “You Can Help” advertising campaign, amidst speculation that CEO Michael Jordaan would step down in December, echoed similar attacks last year against Nedbank chairman Reuel Khoza, who criticised the country’s leadership in the bank annual report.
In 2007, FNB was forced to scrap an anti-crime ad campaign that was seen as critical of the Mbeki government. Paul Harris, then CEO of FNB, declined to comment on Friday. Mr Khoza did not respond to e-mails and messages left with his assistant.
Sandile Zungu, general secretary of the Black Business Council, said the ANC should be robust in its response where warranted, “but they shouldn’t be seen to be over-killing dissent.
“The tendency from the ANC is to respond too angrily and sometimes haphazardly when faced with criticism from business, which in turn instils fear and leads business to be shy to express criticism in public, even where this is justified.
“Silence on the part of business may not be because they are cowards, but because they have shareholder interests and brand images to protect,” he said.
Mr Zungu said he found the ANC and government “a lot more amenable to a very robust engagement behind closed doors, and that they actively welcome frankness on the side of business. They accept that business has value to add.”
Econdow economist Richard Downing said government did not show itself to be business-friendly, but saw business “as a type of enemy. Look at the way they treat foreign investors, which Anglo essentially is. Then who is next? They invite you in, and when you are here they scold you if you do not do what they want you to. It is a difficult situation.”
He warned that without a change of direction “there will be big problems”.
Sizwe Nxasana, CEO of FNB holding company FirstRand, apologised to the ANC at Luthuli House on Friday for the online posting of research clippings that included criticism of government. Mr Nxasana said it was never FNB’s intention to play politics. This “regrettable incident will not be repeated”, he said, according to a statement by the ANC.
This was after the ANC pointed out to him that “the clippings were a deliberate posting on an FNB website to attack the ANC” and “fed into the opposition narrative that seeks to project the ANC and its government in a negative manner”, the ANC said.
The ANC said the clippings “were meant to delegitimise the ANC and its government” and “may undermine the objectives of promoting investment into the country”.
The ANC said it indicated “that its leadership and membership were strongly raising a question why the organisation should continue to bank with a bank that has adopted an oppositional stance to it”.
Mr Mantashe accepted the “apology and show of regret by FNB” and expressed support for the objectives of the FNB campaign to inspire all South Africans to work together in helping to build a better South Africa, it said.
* This article was first published in Sunday Times: Business Times
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