ANC rolls the last dice with economic recovery plan

The ANC is pushing preferential electricity tariffs, export controls and infrastructure investment for SA’s chrome and manganese industries, in a move aimed at stopping factories from shutting and heeding long-standing industry warnings of creeping beneficiation decline.   

The proposals, outlined in the ANC’s 10-point economic action plan adopted by its national executive committee (NEC) meetings over the weekend, aim to arrest the deindustrialisation of SA’s metals sectors, particularly chrome and manganese, while embedding state support across energy, trade, procurement, infrastructure, beneficiation and financing.

SA has seen a rapid deindustrialisation in recent decades, with the industrial sector’s contribution to GDP falling from 28% in 1993 to 18% last year, threatening the country’s long-held status as Africa’s most industrialised economy. Various sector master plans have fallen short of expectations.

The strategy comes as the government faces mounting pressure to support mining and smelting companies that have been hit by years of unreliable electricity supply, deteriorating rail capacity and weaker global commodity prices.

Chrome and manganese sectors 

SA controls the lion’s share of the planet’s chrome and manganese, with more than 70% of chrome reserves and roughly 80% of manganese resources, but only a sliver of that volume is processed at home. Industry estimates point to 2.7-million tonnes of chrome leaking outside the formal value chain each year, costing the economy roughly R7.5bn in lost downstream value.

The plan is to capture that value by marrying trade tools with industrial energy relief. Since 2005, electricity tariffs have risen more than 10-fold, pushing energy-intensive smelters to the brink. Smelting ferrochrome consumes about 2,800 kWh per tonne of metal produced, making affordable, predictable power a make-or-break input.   

Trade, industry & competition minister Parks Tau has already tabled export permits for chrome aimed at curbing illicit shipments and strengthening domestic beneficiation. The proposal is part of a broader effort by the government to reshape the chrome value chain.

“The third intervention is to rebuild our chrome and manganese industries. We will finalise chrome and manganese export tariffs, implement defensive duties on dumped imports, and expand alloys and battery precursor production,” ANC president Cyril Ramaphosa said during his closing address of the NEC on Monday. 

Both chrome and manganese have been designated “critical minerals” in mining & minerals minister Gwede Mantashe’s strategy, elevating them to priority status for state support, recognising them as priority inputs for industrial policy and potentially unlocking targeted financing.

The NEC resolves that an economic war room should be established in the presidency to co-ordinate cross-government performance, monitoring and publish regular scorecards on progress. 

—  Cyril Ramaphosa<br />ANC president

“The NEC resolved that the fourth intervention must be to improve the capacity of the state to manage major projects. This is to address infrastructure delays due to weak capacity and fragmented co-ordination.

“We will professionalise the project management cadre, establish a cross government co–ordination unit and ring fence catalytic projects. This will be the big ticket projects that we want to see established.” 

Ramaphosa said the action plan would be implemented through government structures, with results expected by 2027. 

“The NEC resolves that an economic war room should be established in the presidency to co-ordinate cross-government performance, monitoring and publish regular scorecards on progress. Fundamental to the success of these efforts will be sound institutional governance,” Ramaphosa said. 

Another intervention proposed by the ANC includes accelerating the recovery of SA’s freight and logistics sector. Transnet, the state-owned logistics operator, has been tasked with implementing a turnaround plan that includes greater private sector participation and upgrades to export corridors, particularly those serving mining regions.

“We will develop a sustainable budget negotiation strategy in the context of the government of national unity. We will align fiscal, monetary, trade and industrial policy and mobilise development finance institutions and pension funds for productive investment. In the course of this, we will craft innovative financing mechanisms and processes that will enable us to fund the key catalytic infrastructure projects.”

The ANC also seeks to diversify SA’s trade partners on the continent through accelerated implementation of participation in the African Continental Free Trade Area (AfCFTA), addressing trade barriers, supporting vulnerable sectors and expanding exports to other Brics nations. 

“This will include an emergency industrial support package for sectors affected by increased tariffs. We will expand exports under the AfCFTA and exports to Brics countries and to other markets where we will be paying visits in due course.” 

maekot@businesslive.co.za