Zuma condemns willing buyer-willing seller

thousands of jobs, President Jacob Zuma announced.
During a state of the nation address in parliament in Cape Town on Thursday, president Jacob Zuma said the move is aimed at creating jobs, alleviating poverty, stimulating economic growth as well as boosting transport network linkages in this expansive southern African nation.
He said the funds would see dams, rail, roads and schools being built as the country invests on infrastructure development.
President Zuma said the rail transport network would connect with coal fields in Northern KwaZulu Natal, Mpumalang and Gauteng provinces in a move aimed at addressing challenges of deteriorating road networks.
“This project is intended to connect Gauteng, Durban and seaports. The rail will also address deteriorating roads in Mpumalanga,” said president Zuma.
The president also touched on job creation saying the new economic growth path for 2010 has seen the government reduce the levels of unemployment by 5 percent.
“Unemployment has fallen, but not out of woods. We declared 2010 the year of job creation of which we managed to cut down unemployment from 25 percent in 2010 to 23,9 percent in 2011”, said president Zuma.
He also spoke about poverty eradication, health, job creation, agriculture, a good transport network, mining, manufacturing and small-to-medium enterprises.
On the land question, president Zuma said the willing buyer-willing-seller has failed. “Willing buyer-willing seller concept is not the best way to address this land imbalance,” he said. President Zuma yesterday also squashed more than two years of talk about the nationalisation of South Africa’s massive mining sector, saying state control or ownership of the mines in the world’s biggest platinum producer could not work.
Asked during a televised breakfast briefing if the government planned to nationalise mines, president Zuma said emphatically: “We’re very clear. It is not our policy. We’ve been saying this inside the country, outside the country. It cannot be.”
“We have answered this question many times. We are very clear,” he added. “Our policy is mixed economy.”
“You cannot ask for greater clarity,” said political consultant Nic Borain. “If you look at the words the document uses, and you take what Zuma said today, I think we can put this issue to bed.
“Read altogether, this is the ANC very clearly saying ‘Our task as government is to get the most out of these resources.’ Nationalisation would be a catastrophe.”
Even though the threat of nationalisation has been removed, South Africa’s mining sector – the fifth biggest in the world by value – faces the prospect of higher taxes and royalties as the government tries to squeeze out better returns for the country’s 50 million people.
The ANC has always had a testy relationship with the mines, the economic backbone of the apartheid state, and affirmative action policies since the end of white-minority rule in 1994 have struggled to overturn that legacy.
The mining research released this week proposed a hefty 50 percent tax on profits once a “reasonable return” had been achieved, although it offset the impact with a promised reduction in mineral royalties.
Economists said hiking taxes for a sector that is also facing rising labour and power costs should not be undertaken lightly.
“We keep looking over our shoulder at the legacy issues, when the rest of the road ahead is full of pot holes,” said Colen Garrow, an economist at investment firm Brait.
“Taxation has to be taken very sensitively because the industry locally is in recession.”
The government is also in the process of building a state mining company to ensure cheap domestic supplies of minerals such as coal and iron ore that are essential to a developing economy. Some analysts believe this may yet evolve into significant state control of specific areas of mining.
“While I am convinced that general nationalisation is not on the cards, I don’t believe targeted nationalisation is no longer a consideration,” said Allan Reid, a director at law firm Cliffe Dekker Hofmeyer.
As reported elsewhere, suspended ANC Youth League Julius Malema remained defiant over the nationalisation, telling a meeting of the Youth League leadership: “We will never retreat”. The Freedom Charter said the mineral wealth beneath the soil, banks and monopoly industry shall be transferred to the ownership of the people as a whole,” Malema said. – CAJ News/ Reuters.