President Jacob Zuma promised to keep the country’s powerful mining sector “globally competitive”.
The latest comment from a senior government official to knock down the prospects of nationalising the mines.
In his annual State of the Nation address, Zuma also pledged a 300 billion rand ($40 billion), seven-year investment plan for state rail and ports firm Transnet to increase the shipping of iron ore and coal, whose exports have been hampered by logistical bottlenecks.
Unlike previous years, he gave no projections for the budget deficit or growth in Africa’s largest economy.
Prior to the speech, editorials and comments on social media sites had called for bold plans to cure chronic unemployment and a broken education system, as well as act against growing corruption.
However, the speech lacked any major policy initiatives.
This week the Zuma administration has worked to squash the idea – pushed by radical elements in the ruling African National Congress (ANC) – of mine nationalisation in the world’s largest platinum producer, with two cabinet members telling a global mining conference in Cape Town that it would not work.
A mining sector study submitted to the ANC leadership this month rejected nationalisation as an “unmitigated disaster”. It proposed a 50 percent tax on mining profits as a way to help the poor better benefit from South Africa’s mineral riches.
In last year’s speech, Zuma laid out plans to spend billions of dollars to create jobs, but there has been little to show for the money, and official unemployment has refused to budge much below 25 percent.
Economists say reform of rigid labour laws and the cutting red tape strangling small businesses is crucial to invigorate growth that is likely to come in below 3 percent this year.
“We are tinkering in decimal points, whereas the substance of unemployment is not really being resolved at all,” said Chris Hart, chief economist at Investment Solutions.
“This economy is not geared to creating jobs because the environment is too hostile for small business.” – Reuters
Source: Business Report
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