South Africa’s ANC Pledges Spending Boost, More Jobs

By Mike Cohen

Jan. 10 (Bloomberg) -- South Africa’s ruling African National Congress hit the campaign trial today, pledging to lower the country’s 23 percent unemployment rate and raise spending on health, education and grants for poor children.

ANC supporters from Eastern Cape Province were bused into the southeastern city of East London for the presentation of an election manifesto, filling the 30,000-seat Absa rugby stadium. The event, which coincided with 97th anniversary celebrations of Africa’s oldest political movement, was also beamed onto a giant screen in a nearby cricket stadium and broadcast on national television.

“The developmental state will play a central and strategic role in the economy,” the ANC said in the document. “Fiscal and monetary policy mandates, including management of interest rates and exchange rates, need to actively promote creation of decent employment, economic growth, broad-based industrialization, reduced income inequality and other developmental imperatives.”

The ANC, which led the fight against apartheid and took power under Nelson Mandela in 1994, won almost 70 percent of the vote in the last elections five years ago. Rivals this year include the Congress of the People, led by former Defense Minister Mosiuoa Lekota and several other veterans of the fight against racial segregation.

Zuma Leadership

The ANC split after Jacob Zuma, 66, ousted Thabo Mbeki as party leader in December 2007. The ANC forced Mbeki to step down as the nation’s president in September, and temporarily replaced him with its deputy leader Kgalema Motlanthe until Zuma is eligible to take over after the poll.

“We can now say with confidence that much has been done in addressing the legacy of apartheid over the last 15 years, that much more remains to be done and that working together, we can do more,” Zuma said. “We will retain those strategies and practices that have been successful, but will change or improve those that have not delivered optimal results.”

Labor unionists and communists, who form part of South Africa’s ruling alliance and backed Zuma’s rise to power, have been pushing for lower interest rates. They also want the central bank, whose sole mandate is to control inflation and protect the value of the currency, to consider how interest rate changes will affect growth and unemployment.

The ANC doesn’t intend to scrap inflation targeting or change the central bank’s mandate, party spokeswoman Jessie Duarte said. “Those policies will stay.”

Labor Desires

The ANC “has to intensify the process of change so that it benefits the masses of our people,” Zwelinzima Vavi, secretary- general of the Congress of South African Trade Unions, the country’s largest labor federation, said at the rally. The government should not “continue with failed economic and discredited policies. The elected leadership should also not forget that they serve at the behest of the people and shall be removed if they stray from the mandate.”

The ANC’s other election promises include bolstering development in rural areas and increasing the size of the police force to combat crime in a country where on average more than 50 murders are committed each day. The party also intends to extend support grants to children who are 15 to 18 years old. About 8 million young people already receive the grants.

Land redistribution programs will be stepped up “to ensure more land is in the hands of the rural poor,” the manifesto says. “The government will work toward free and compulsory education for all children. As an immediate step it will ensure at least 60 percent of schools are no-fee schools.”

Taxes Versus Debt

While the ANC manifesto contains scant detail on how the party will fund its promises, policy chief Jeff Radebe has said taxes won’t be increased, raising the prospect of increased government borrowing.

“Although many of these initiatives will be phased in, with some further allocations likely in the Feb. 11 budget statement, the rising social welfare payments will still raise concerns over the fiscal implications,” said Mike Davies, an analyst an Eurasia Group in London.

The ANC’s track record in government indicates it’s unlikely to implement the election promises, said Helen Zille, leader of the Democratic Alliance, the main opposition party.

“Manifestos are not always the best guide to a party’s philosophy or policies because there is often a vast difference between what they say and what they do,” she said in a Jan. 9 statement.

Mbeki, 66, did not attend today’s rally.

While Mandela, who turned 90 last year, has pledged support for the ANC in the election, he has declined to campaign actively or seek to reunite the party.

“I have chosen, and made that publicly known, not to become involved in those or other political matters,” Mandela said in a statement read by his daughter Zindzi. “It is the task of a new generation to lead and take responsibility.”

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net;