ANC election manifesto: Expanded BEE bad news for business - Sakeliga

15 January 2019

The business organisation Sakeliga outlined various harmful economic plans in the ANC’s 2019 election manifesto. Judging by its manifesto, the ANC seeks to expand BEE, with calls for more onerous ownership stipulations and selective competition enforcement. Its plans for state-led investments threaten the ability of private sector investors to employ their own money as they see fit. Measures proposed to vastly increase government control includes competition law exercising more granular power over the management and operation of South African businesses.  

According to Sakeliga the ANC seems to think that politicians drive economic progress and not entrepreneurs. Line by line the manifesto reveals an ignorance of the functions of entrepreneurship, ownership, as well as of the market system in the allocation of economic resources.  

“The manifesto reveals the ANC’s deeply rooted disdain for the private sector and the role it plays in the South African economy. Disregarding business’s vast capacity for social upliftment and public welfare, the ANC has made its intentions clear to further expand and solidify its control over the South African economy,” according to Gerhard van Onselen, senior analyst at Sakeliga. 

Van Onselen continues, “In disregard of basic principles of economics, the ANC tries to hammer the economy into the strictures of idiosyncratic political plans. It is as if the ANC dreams of an entrepreneurless economy, replacing entrepreneurial judgment and capital allocation in the South African economy with political fiat and capital appropriation.”  

Sakeliga points to the ANC’s ironic misunderstanding of monopoly: “The ANC’s idiosyncratic definition of ‘monopolies’ is cause for concern – especially in the absence of any pledges to break state monopolies and regulation that hampers free competition,” says Daniel du Plessis, legal analyst at Sakeliga. 

The ANC has used its manifesto to state its clear intention to use policy-measures to promote social-political goals. The party has, for instance, pledged to “investigate the introduction of prescribed assets on financial institutions’ funds to mobilise funds within a regulatory framework for socially productive investments.” 

According to Du Plessis, this policy is likely to have dire effects on investment in South Africa. “This comes down to, in effect, appropriating private persons’ money to prop up the numerous vanity projects, ailing SOE’s and corrupt institutions which are hallmarks of the South African public sector. This scheme is a natural companion to the ANC’s ever-present promises of land expropriation without compensation, and suggestive of other expropriative policies to be instituted in future.” 

“Ultimately, the manifesto points to greater political control over the South African economy and will not solve the country’s economic woes,” says Du Plessis. 

Issued by Gerhard van Onselen, Senior Analyst: Sakeliga, 15 January 2019