Zuma calls for radical shift of economic power in South Africa

South Africa’s economy is still largely under the control of whites who held power under apartheid, President Jacob Zuma has declared, calling for a “dramatic shift” to redress the wealth balance more evenly in favour of the black majority.

Mr Zuma, speaking yesterday at the start of a major policy meeting of his ruling African National Congress, said the challenges of poverty, unemployment and inequality posed long-term risks for Africa’s richest country 18 years after the end of apartheid.

“The structure of the apartheid-era economy has remained largely intact,” he told several thousand ANC delegates. “The ownership of the economy is still primarily in the hands of white males.”

Without giving details, he called for a “dramatic shift and giant leap” in coming years to spread the country’s wealth more equitably, mentioning the distribution of mineral resources and land ownership as areas which needed to be overhauled.

Mr Zuma said this proposed “second transition” was necessary to complement the negotiated end of apartheid in 1994, when he said “certain compromises” over economic ownership had been made to ensure a smooth political transition from white minority rule.

While draft proposals to be considered at the conference advocate a greater role for state-owned enterprises, Mr Zuma made clear that the ANC’s strategy has been to seek to boost growth and create jobs through “a thriving mixed economy”.

The former liberation movement ANC has had a patchy record in ending economic disparity that is among the highest in the world. It has brought housing, electricity and running water to millions, but almost half the population still lives in poverty.

According to Statistics South Africa, 29 per cent of blacks are unemployed compared with 5.9 per cent of whites, while IHS Global Insight, an economic consultancy, estimates that whites have an average income nearly seven times that of blacks.

But Mr Zuma’s speech yesterday may have been more focused on lining up support for an ANC party leadership election at the end of the year than on policies. If he wins the party race, he is poised to also win a second term as president, serving until 2019.

“His speech did not convince me that he was serious about cleaning house. It was half-hearted considering that corruption is a very serious problem in government,” said Susan Booysen, a political analyst at Wits University in Johannesburg.

“His first priority is not to make enemies.”

Mr Zuma said the debate over how the country’s mining wealth should be used must go beyond simply the question of “to nationalise or not to nationalise.” Calls for nationalisation from some sectors of the ruling ANC have stirred investor concerns in the world’s biggest platinum producer.

Mr Zuma said the conference should consider how the state can obtain an “equitable share” of mineral wealth, which could be used more to benefit poor communities.

He also called for a new programme for land reform, saying the current “willing buyer-willing seller” policy had been too slow in returning white-owned farmland to blacks dispossessed by the apartheid state.