ANCYL – Would Nationalisation be so terrible?

Jun 29, 11 ANCYL – Would Nationalisation be so terrible?

To some this would be a rhetorical question. For others it would be a resounding YES.  I would have answered in the same vein, but after hearing the ramblings and sometimes threats from the ANC Youth League and strong denials from the broader ANC movement; I have been compelled to delve into this issue.

The idea of nationalising the mines is really not as new as some would have us believe. When the ANC first gained power in 1994, part of the economic plan was to gain some ownership of the mines to earn revenue to fund the social programs that had been planned. This plan was clearly derailed after the infamous trip Mandela took around the world on a fact-finding mission and in hopes of reviving the image of South Africa in the world.  Seventeen years later, we find South Africa the most successful economy on the continent beleaguered with many problems. South Africa stands as one of the most unequal societies with the current unemployment rate standing between 23 % and 25% as of the 4th quarter 2010.

One may ask why the sudden focus on nationalization by the ANC Youth League? The ANCYL has stated that the  economy needs to be reformed which is true when considering the fact that the majority of the unemployed in South Africa are the youth and that poverty levels are increasing by the year. The question is whether this would be the solution.

There have been cases where a government’s ownership or having the majority shares of natural resources has benefited the country. Neighboring countries such as Botswana have been able to positively use the revenue gained through their joint shares with De Beers in diamond mining. Botswana is known as the success story of the sub-Saharan region with a strong economy, a stable state and population that is well provided for. This is not any way denying the problems

The worrying part about the ANCYL’s insistence that nationalisation be considered a viable option is that the broader ANC party has come out strongly denying that it is part of any future policy. Even the SACP leader Blade Zimande has come out warning that nationalization is not in the interests of the poor. Ideologically it is very interesting that the (Marxist) Left is opposed to nationalisation. But perhaps the SACP is being pragmatic. When questioned on this issue Reserve Bank Governor Gill Marcus stated that for those considering nationalisation as an option needed to “look at how well government – controlled entities function…” In this case the South African government has a bad track record. Today South Africans deal with rising costs of electricity whilst experiencing shortages during the coldest time of the year due to the mismanagement of parastal Eskom. This is not even considering the myriad of problems faced in the municipalities.

Nationalisation cannot be a viable option when the country’s president readily admitted that the country’s leading party is in crisis and is marred by ill-discipline. Nationalization is a good idea for a responsible government that can be trusted to use the revenues earned to provide for its population. We will not have to wait long to find out whether it will become policy, the NEC has been instructed to report back to the ANC conference in Bloemfontein in 2012. Until then we are likely to continue hearing the ramblings on why nationalisation is important.