Global South African News Wrap 29 June 2012 Index

Zumas policy victory ......................................................................................................... 2 ANC accepts revised 'second transition' document ............................................................ 3 Zuma under fire: Phosa pays Floyd Shivambus legal fees. Mbalula says it is us who will remove president................................................................................................................ 9 Telkom future hinges on ANC policy meet ...................................................................... 12 Investment stalls ahead of ANC talks ............................................................................... 15 Kodwa trapped in Zumas battle against youth league-insider ......................................... 20 ANC a hissing pressure cooker ......................................................................................... 22 Zuma hits out at critics of second transition document .................................................. 24 Much more than just ANC policy at stake ........................................................................ 26 Youth league angered by presence of axed Mabe ............................................................ 28 ANC must adapt or die, says Mbalula .............................................................................. 30 Battle lines are drawn in Midrand ..................................................................................... 32 Zumas new bling Boeing to cost R2bn............................................................................ 36 ANC proposes integrity panel to test allegations and remove bad apples ........................ 38

29 June 2012 The New Age Siyabonga Mkhwanazi

Zumas policy victory

President Jacob Zuma scored a major political victory at the ANC policy conference when thousands of delegates came out in support of the second transition policy document. ANC head of policy Jeff Radebe told journalists yesterday in Midrand, where the ANC is holding its gathering, that there was total consensus among all delegates about the content of the policy proposal. Radebe said to address concerns raised by some delegates on the terminology of the document, the conference agreed on renaming the policy the second phase of the transition. Radebe and ANC head of political education Tony Yengeni rejected suggestions linking the second transition to Zumas bid for a second term. Yengeni, who was one of the authors of the document, said the proposal was about charting a new path for South Africa. It is extremely mischievious to associate this document with the second term bid by President Zuma. This document has nothing to do with the election of any individual. Those people, within and outside the ANC, who associate this document with the second term, are mischievious. We need to reject this notion of a second term, said Yengeni. Leading ANC figures, including deputy President Kgalema Motlanthe and Gauteng ANC provincial chairperson Paul Mashatile had questioned the second transition saying it was vague. Zumas detractors have accused him of using the second transition, as a rallying cry for his re-election as ANC president at the Mangaung conference in December. Radebe said all 11 commissions discussing the policy proposal had agreed that the substance of the document was talking to the issues affecting South Africa. Delegates recognised that after the defeat of colonialism and apartheid, the next transition should be about improving the social and economic conditions of the majority of South Africans.

During his opening speech at the conference on Tuesday, Zuma called on the 3500 delegates to adopt the second transition. Radebe said the delegates believed the only way for South Africa to move forward was to have access to the economy. The economy was still in the hands of a few white men. It could not be that 18 years after democracy the majority of South Africans were on the lower rung of the social and economic ladder, he said. Radebe said delegates wanted the country to accelerate economic transformation in the next 20 years. The second phase of the transition would be about economic transformation. The document was drafted by Yengeni, national executive committee member Febe Potgieter-Gqubule, Gauteng provincial secretary David Makhura and his Northern Cape counterpart Zamani Saul. Potgieter-Gqubule said the next 20 years would be critical for the country to move from political freedom to economic transformation. She said there were many things that needed to be fixed in the country, including an infrastructure backlog. The second phase of the transition would serve as the basis on which South Africa expedited economic transformation, said Potgieter-Gqubule. The document will have to be approved by the elective conference in December. 28 June 2012 Mail & Guardian Nickolaus Bauer

ANC accepts revised 'second transition' document

The ANC has accepted an altered version of the "second transition" policy document but it has nothing to do with Mangaung, says the ruling party. The ANC on Thursday accepted a watered down version of the "second transition" document at its policy conference in Midrand. "All commissions have accepted the contents and the thrust of the document as you know it," ANC policy head Jeff Radebe told journalists. Radebe would not elaborate on the exact changes made to the original strategy and tactics document except to say the essence of the document remained the same.

"It is no longer called the 'second transition' but rather the 'second phase of the transition'. There was broad agreement that we are in a transition from apartheid colonialism and the second phase of transition must be characterised by more radical policies and a renewal of the ANC and its alliance partners," he said. National Executive Committee (NEC) member Febe Potgieter-Qobile said delegates came to a consensus on the need for immediate radical change. "We realise that if things do not change soon, we will not be able to build a South Africa for all. This is why we approach this strategy," she said. The contentious policy document has been the subject of intense speculation that it forms part of President Jacob Zuma's push for a second term as ANC president. Power dynamics Radebe was quick to point out the adoption of the document in an altered form did not indicate any shift in power dynamics within the party as it headed towards its elective conference in Mangaung. "Let me just deal with this elephant in the room: There are no Jacob Zuma or Kgalema Motlanthe supporters there are simply ANC supporters," he said. This was echoed by Tony Yengeni, the man who helped author the document with Potgieter-Qobile. "This has nothing to do with leadership. It is a political discussion, anybody saying otherwise is extremely mischievous. It is extremely mischievous for anyone to equate the second transition document with the second term for president," he said. This was in stark contrast to events outside the conference where a stand-off ensued between supporters aligned to both Zuma and Motlanthe. Face-off Although nuanced, the opposing factions sang songs and gestured at one another at the close of sectoral policy commissions. Matters came to a head during Motlanthe's walk through the conference's progressive business forum. While at the Africa Rainbow Minerals stall, Motlanthe was met by a group of pro-Zuma members. Marching past the deputy president, the roughly 50-strong crowd sang "uZuma yo siVuma iSecond-Transition" (Zuma will take us to the second transition).

While initially bemused by the spectacle, Motlanthe was quickly escorted to the VIP area. Succession debate Once the group moved to the back of the hall, Motlanthe exited and was welcomed by a small group of his own supporters outside the venue. He passed them as they sang "Siyaya noKgalema" (We are going with Kgalema). As Motlanthe moved towards the dining hall, Zuma supporters exited the commissions venue and intercepted the Motlanthe faction. Both sang opposing songs and gestured at one another. Zuma supporters thrust their hands in the air with two fingers raised signifying their call for a second term for the incumbent. The Motlanthe group met their gestures with arms raised, rolling their hands a sign indicating their call for a substitution in leadership. Downplaying the issue Both factions were dominated by delegates from different provinces and representatives from all of the ruling party's leagues. The stand-off could be interpreted as the first crack in the ANC's attempt to silence the succession debate. ANC secretary general Gwede Mantashe ruled out any discussions on the matter until October but the incident is reminiscent of events leading up to the 2007 Polokwane elective conference when Zuma took power. The ANC downplayed the issue. "We will not comment as most events have had ... songs. A comment would indicate a cynicism in rival politics. People are trying to air whatever views they have through songs and that is an age old tradition," ANC spokesperson Keith Khoza said. 28 June 2012 Business Day Page 3 Mariam Isa

Gordhan adamant about states economic role

Finance Minister PravinGordhan says there is a need for state intervention in the economy

There is a need for state intervention in the economy, and not enough has been done to change the apartheid legacy of its structure, Finance Minister PravinGordhan said yesterday. His remarks echoed comments made by President Jacob Zuma , who told the policy conference of the African National Congress (ANC) on Tuesday that it was time for a "radical" shift in approach to transform the economy. "We have created democratic institutions, but what we have not been able to do is to change the fundamental structure of the economy. We dont give enough attention to this," MrGordhan told a business forum at the ANCs policy conference in Midrand, Gauteng. Globally, there was now a realisation that there was a place for the state in economies, he said. "Where markets dont go, the state has to intervene. There are many places in SA where markets wont go." Many investors believe that there is already too much intervention in the local economy, and warn that confidence in SA will be undermined if the ANC adopts some of the controversial reforms on its table. They include a 50% windfall tax on mines, export levies on strategic minerals, and capital gains tax on the transfer of mineral rights. The ANC has also said it will discuss calls for the prescription of assets of private pension funds, expropriation of land, and constitutional and judicial change. "As business, we are becoming concerned that there is increasing state intervention in the economy," said Neren Rau, CE of the South African Chamber of Commerce and Industry. "Although we would agree that a completely free enterprise system is not ideal for SA, we dont want too high a degree of state intervention and control in the economy because that reduces flexiblity for business," he said. Any policy changes mooted by this weeks conference would have to be adopted at the ANCs elective conference in December. Mr Gordhan said changes to mining taxes were under discussion. "Can we acknowledge that in SA we are only in the first stages of transforming ourselves into a normal society where everyone is treated equally and has equal opportunities...? Whether we like it or not, certain ownership patterns have persisted." Mr Rau said there could have been more progress in dealing with inequality, but that the answer lay in making policies more effective. Mr Gordhan said there was "no decision yet" on a proposed carbon tax. The government

was "listening very carefully" to stakeholders, and would continue with that engagement, he said. A new discussion document on the proposed tax was due in February but has not been released yet. Mr Gordhan was replying to questions at a breakfast hosted by the Progressive Business Forum. He emphasised the need for the government and private sector to build the trust needed to restore business confidence and boost investment. "Downside risks" were increasing to the governments forecast that the economy would grow 2,7% this year, as Europes crisis was having a major effect, he said. "The world is getting used to the idea that the next three to five years will be pretty gloomy years." Lower oil prices were helping to mitigate the effect of a depreciating rand, which has weakened in response to global risk aversion, Mr Gordhan said. That has put local exporters in a "much more competitive position", he said. Mr Gordhan said much more had to be done about the constraints on SAs economy. That included developing Eskoms power capacity, improving transport infrastructure, and increasing SAs low level of savings, which keeps the country dependent on foreign capital. "In the next couple of months we are putting proposals in place to increase savings," he said. South African households spend all of their disposable income, according to figures from the Reserve Bank. 28 June 2012 Business Day Page 1 (Lead) Sam Mkokeli

Setback for Zuma as ANC rejects second transition

Encouragement for campaigners against presidents second-term bid President Jacob Zuma suffered a setback at the African National Congress (ANC) policy conference yesterday when delegates shot down the "second transition" policy concept, which he has championed as a solution to poverty and unemployment. The rejection of the concept debate on which is regarded as a proxy for the ANCs leadership battle will embolden members and leaders campaigning to replace MrZuma at the partys elective conference in December. ANC delegates attending the conference in Midrand said the concept was rejected by "virtually all the commissions" for being theoretically poor.

One of 11 commissions studying policy proposals, and attended by MrZuma himself, concluded that "while the reasons behind reference to a second transition were understandable, the concept is inappropriate, and does not convey the movements theorisation of the process of social transformation", according to notes seen by Business Day last night. The commission said the ANC should not create an "artificial separation between social and political tasks". "The commission strongly believes that the original transition should be directed towards attainment of all Freedom Charter objectives. There can never be a second transition because the aims and objectives of the first transition as captured in the Freedom Charter have not been achieved." According to the document, over the past 18 years the ANC had ushered SA through a first transition to democracy, when it focused on political emancipation. Now it needed to introduce a "second transition" directed at social and economic transformation over the next 30 to 50 years. The second transition should achieve "rising per capita income, full employment, a Gini index target that demonstrates real and visible progress in reducing wealth and income inequalities, and visible progress in changing racial and patriarchal patterns of wealth and income", the document proposes. Several senior ANC leaders have argued that the new document tries to separate the political and economic struggles which contradicts the ANCs historic approach to the struggle for freedom. Others see it as a way to sneak socialist programmes into the work of the government. The commissions will report back to a plenary session today where the 3000 delegates will debate a range of policy proposals. The plenary will determine the future of the document, and what can be done to improve it. Some delegates want it abandoned altogether and replaced with a document adopted at previous ANC conferences. Among its detractors are union leaders Zwelinzima Vavi and Irvin Jim. ANC deputy president Kgalema Motlanthe has already dismissed the document as a rallying point. MrZuma will be relying on the plenary session to rescue the document, which critics claim is his manifesto for his campaign for a second term as ANC president. It is possible that Mr Zumas supporters could concede at the plenary that the term "second transition" should be dropped.

KwaZulu-Natal, Free State and Mpumalanga delegates were the main defenders of the document in commission discussions yesterday, while Gauteng, Limpopo and the Eastern Cape demolished the concept for being "scientifically poor", said a delegate. If the document is rejected outright, those wanting a change in leadership in December will be buoyed. They may accept a change to the term "second transition", as that would be enough to signal Mr Zuma can be challenged. While the ANC has put a lid on its succession debate, the policy conference is expected to provide clues on which way the leadership race will unfold. The rejection of the second transition will be a huge setback for MrZuma, especially after he had endorsed it during his opening address to the conference on Tuesday. He received a mixed reaction and the delegates were mostly guarded. However, at a press conference on Monday, he said the document should not be attributed to him, because he had not authored it. A conference delegate, who wants leadership change in December, said the second transition concept was regarded as Mr Zumas campaign tool. If by the conference and were sent to the partys elective conference in December for adoption, it would give Mr Zuma a point around which to rally support. 24 June 2012 The Sunday Independent Page 1 Moloko Moloto, Candice Bailey, Moffet Mofokeng and Dianne Hawker

Zuma under fire: Phosa pays Floyd Shivambus legal fees. Mbalula says it is us who will remove president
While President Jacob Zuma is expected to exert his authority to get the divided ANC to focus on policy issues, his treasurer-general is financing the leaders nemesis and his sports minister is threatening to remove him. Zuma, who still commands considerable support amid a barrage of attacks from his opponents, has returned from his international trip to a party torn apart by succession divisions and factional battles. Some of his senior leaders, such as his deputy, Kgalema Motlanthe, have publicly contradicted his policy stance while some provincial leaders have openly questioned his leadership.

In what could be interpreted as an open declaration of war, ANC treasurer-general Mathews Phosa has paid the legal bill of Zumas political foe and suspended league spokesman Floyd Shivambu. This is after Shivambu failed to settle punitive costs in an Equality Court case that was brought by Independent Newspapers on behalf of the groups former political correspondent, Carien Du Plessis. Shivambu apologised for calling Du Plessis a white b**** and settled out of court. However, he is yet to pay this settlement despite the R18 000 punitive costs. The sheriff tried to attach Shivambus assets, but Phosa settled the bill. The payment was made on June 13 after the sheriff was apparently contacted by Phosa, who made an arrangement for the payment. But Shivambu told The Sunday Independent yesterday that he did not know about the payment. No one told me about it. I was not making an arrangement to pay it because I did not owe anybody. No one ever contacted me to tell me that I owed them money, said Shivambu. He said he would contact Phosa to withdraw the payment he had made because there was no agreement with him. The sheriff had notified the law firm of the payment into its trust account only this week. Phosa could not be reached for comment yesterday. He was previously criticised for defending expelled youth leader Julius Malema when he was initially disciplined for comparing Zuma to his predecessor, Thabo Mbeki. Phosa, who does not see eye to eye with the president, also attended a rally at Wits University where Malema branded Zuma a dictator. Yesterday Phosa was scheduled to attend a youth league event in the Free State, but his plane could not land because of bad weather. The rally turned into a Zumabashing event, with supporters chanting Bring back Malema. The rally was addressed by youth league deputy president Ronald Lamola, who said, without mentioning Zuma by name, that there was fear in the ANC and that you get punished for saying anything.

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This week Lamola, in a veiled attack, said Zuma was turning his village, Nkandla, into New York. In Limpopo, Zuma also came under fire from Sports Minister Fikile Mbalula, who said: President Zuma was elected by us, and it is us who will remove him. Mbalula said the organisation should fight against populism and root out tribalism. Malema also accused Zuma of tribalism last week. Mbalula told a rally yesterday that it is not the numbers that must actually intimidate us, it is the ideas, in what could be seen as a veiled admission that Zuma has the upper hand. We must not be intimidated by populism, Mbalula added. Ironically, Mbalula like Malema used to be a diehard Zuma supporter and once attacked Mbeki in an open letter. Mbalula said the ANC took a decision to prohibit debate on succession, but others have a licence to say who they prefer. KwaZulu-Natal has openly supported Zumas second term as party leader. In other provinces there are these fanatics, with chicken audacity, and they speak about leaders they support. But if you talk about succession, on Monday you will be hauled to (a disciplinary committee) and given a huge file of charges, said Mbalula, in what could be construed as a reference to the expulsion of his friend Malema. The president did not get flak only from the youth league sympathisers. ANC Veterans League leader Sandy Sejake said Zuma must be removed as party president in Mangaung because of his ties to the powerful Gupta family. The Guptas and the Presidency have always denied any undue influence on Zuma. But Sejake said: Our cabinet members are actually appointed by the Guptas. I have never seen the membership of the Guptas in the ANC. He was speaking at the Limpopo Agriculture Department farmers awards ceremony in Polokwane this week. In a subsequent interview with The Sunday Independent, Sejake mentioned that SA needed new leadership. The solution is that when we go to Mangaung, we (should) elect leadership that is going to function as a collective, leadership that is tried and tested in the Struggle, people who have the interest of this country at heart, said Sejake.

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However, ANC spokesman Keith Khoza said yesterday that the election of the ANC president this year would be up to the branches of the party. The issue of whether comrade president Zuma will be elected or not does not depend on individuals and their pronouncements In terms of what people say outside, it would not change that fact, he said. Khoza said the party had noted some of the comments made by party members. The ANC has raised this many times. There are internal processes to deal with these issues. Once people go outside of the party they are not speaking to ANC structures, he said. Zumas support came from his ally in the Free State, Premier Ace Magashule, who was re-elected provincial party chairman. He did not hide his allegiance at the provincial conference this weekend: If you talk about leadership, come December (Mangaung national conference), youll apply your mind on who is the best leader. Zuma was expected to use his closing remarks at the Free State conference today to deal with his opponents and also try to exert his authority at the policy conference on Tuesday by nudging the party to focus on policy issues. Political analyst Karima Brown said it was wrong to perceive the policy conference as a proxy war for succession and that Zumas strength is his ability to create a platform for different ideas to flourish in the ANC. He brings interest groups to come together and says lets debate that is his popular phrase. Another political commentator, Ebrahim Fakir, said it was unfortunate that delegates go in to support the position of a certain candidate. He added: It defeats the purpose of the conference. But this is politics and the reality is that delegates will take a position on a basis of who says what. That is what they are used to doing. 24 June 2012 The Times Page 11 Reuters

Telkom future hinges on ANC policy meet

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The future of Telkom might depend on whether the ANC trusts its government more than the private sector to build internet infrastructure. In a country with one of the world's highest ratios of income disparity, the ANC has argued that companies trying to maximise profits could overlook the millions of poor people who lack services, including a broadband internet connection. The party and its labour allies have in recent months tried to thwart some high-profile foreign acquisitions of stakes in local firms, saying they could lead to job cuts in a country battling chronic unemployment. But, on paper, Telkom had a nearly perfect partner to increase connectivity in South Korea's KT Corporation, a fixed-line operator that wants to acquire a 20% stake in the South African parastatal. KT helped turn South Korea into the world's most wired country, with more than 90% of households having an internet connection. "The government is schizophrenic because on the one hand it is a shareholder in Telkom, so it wants Telkom to maximise its profit because it gains as a shareholder but also from the tax base," said Dobek Pater, an analyst at consultancy Africa Analysis. "On the other hand, it still views Telkom as a vehicle for achieving part of its information technology policy, as one of the critical vehicles to drive that policy forward." The ANC holds a policy conference this week. It has said that it wants greater government control of the economy and to spend tens of billions of rands on infrastructure to spur growth, increase employment and alleviate poverty. Telkom shares tumbled to an eight-year low this month after the government blocked KT's plans to acquire the 20% stake. "The cabinet didn't support the transaction," Minister in The Presidency Collins Chabane said. He did not offer an explanation but other officials said the deal could compromise Telkom's position as "a strategic asset". The government owns more than a majority stake jointly with the state-run pension fund. The deal with the Koreans would have diluted that holding to less than 50%. But the shares jumped back this week after a report that the ANC would consider nationalising Telkom at its policy meeting and place the internet build-up in its infrastructure plans. "The government .thinks it is the best placed to roll out Telkom infrastructure across the country," said Sasha Naryshkine, an analyst at Vestact.

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"The ANC isn't suspicious of private business per se, but it thinks the state is better placed to drive development and empowerment," said economist Peter Montalto. "The government already has a very hefty influence over Telkom and wouldn't need to nationalise it to obtain its policy objectives." Telkom employs about 23000 people but reportedly needs only about half of them, Africa Analysis's Pater said, adding that KT would probably have wanted to cut the bloated workforce

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24 June 2012 Business Report Page 1 Stephen Gunnion

Investment stalls ahead of ANC talks

Local companies are hoarding near-record amounts of cash, hurting returns with interest rates at 30-year lows, as concern that President Jacob Zumas ruling party could push through policies that will cut profit hold back investments from mining companies. The ANC, facing protests over a 25.2 percent unemployment rate, starts a four-day policy conference on Tuesday that will debate proposals to nationalise mines, banks and telecoms firms, seize land without compensation and raise mine taxes. Europes credit crisis, slowing economic growth in China, local factories operating at below capacity and inadequate port, rail and road infrastructure are also forcing companies to sit back. Investors are going to be taking a wait-and-see attitude, NicBorain, a Cape Town-based political analyst at BNP Paribas Cadiz Securities said. The policy documents going into the ANC conference indicate a more thorough attempt to share the spoils of the South African economy between those who controlled the old South Africa and those who control the politics in the new. Cash belonging to companies sitting on deposit with banks increased 11 percent to R522 billion at the end of April from a year earlier, after reaching a record R540bn in December, according to the latest data from the SA Reserve Bank. Sitting on cash is costing companies. The average return on equity for the 162 stocks on the all share index last month declined below 22 percent for the first time since the end of 2010, according to data. Policy uncertainty doesnt mean they have to hold the cash, said Neville Chester at Coronation Fund Managers. The cash needs to get returned to shareholders and allocated to other investments if it was not going to be spent. The central bank has kept its repurchase rate at a 30-year low of 5.5 percent since November 2010 to offset effects from Europes debt crisis on growth, which it estimates may slow to 2.9 percent this year from 3.1 percent last year.

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Zuma, 70, is being pushed by some members of the ANC, its youth wing, the SACP and the Cosatu to use the countrys mineral wealth to improve the lives of black citizens, many of whom live in poverty 18 years after apartheid ended. Tuesdays ANC conference will be followed by another in December, when decisions will be ratified and leaders for the organisation elected. While there is need for change were not looking at a counter-productive platform of policies, ANC spokesman Keith Khoza said on Thursday. The ANC would adopt what is responsible, he added. While an ANC-commissioned study released in February found that seizing mines would be an unmitigated economic disaster, it recommended imposing a 50 percent tax on mining companies earning returns in excess of 15 percent, levies on the sale of prospecting rights and more taxes on companies based in offshore tax havens. One of the concerns investors have is what is going to happen here; the sooner we can get clarity, the better, Nick Holland, the chief executive of Gold Fields, said on May 17. Thats what investors want and thats what we want as well as a company that is investing heavily. Gold Fields has R5.2bn in cash on its balance sheet after reaching R6.1bn in December, the most since at least 1998. The company is studying opportunities in Finland, the Philippines, Peru and Mali to reduce the proportion of gold that it mines in South Africa, where output has declined since 2009 to 40 percent of total production by 2015 from 62 percent in 2008. Metals account for 64 percent of exports in the economy, while labour and power costs have increased faster than inflation for each of the past three years. The mining index declined 2.17 percent to 30 771.82 points in Johannesburg on Friday, taking losses in dollar terms over the past 12 months to about 27 percent, compared with a 6.3 percent slide in the MSCI emerging markets metals & mining index. What is not happening, is there is no expansion being put in place on a forward looking basis, Kevin Lings at Stanlib Asset Management in Johannesburg said. The horizon has shortened and the immediate focus has become shorter; companies are not really looking far beyond that because there are too many unknowns to effectively plan into that environment, Lings added.

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The National Union of Metalworkers of South Africa (Numsa), a unit of Cosatu with 300 000 members, recently called for the nationalisation of banks, mines, telecoms and energy companies. The National Union of Mineworkers, the largest union within Cosatu, doesnt support nationalisation and instead encourages greater local processing of minerals. The ANC Youth League has said it wanted Zuma replaced by his deputy, Kgalema Motlanthe. We have meetings with big listed companies that are saying if there is policy uncertainty about nationalisation of mines, why am I going to make long-term capital investments, Nicky Newton-King, the chief executive of JSE Limited, the operator of the stock and bond exchange, said on Thursday. Mergers and acquisitions, which should be boosted by the cash holdings, were being stalled by the political and global economic environment, Mike Brown,the chief executive of Nedbank Group, said on May 18. Deals dropped 18 percent to R54.2bn in the first half compared with a year earlier, according to data. The policies up for debate present a whole range of threats that could be keeping those companies from spending their money, BNP Paribas Borain said. They are also an attempt to make South Africa more sustainable in the long term and make the South African story a more enduring one. 28 June 2012 Business Day Page 1 Siseko Njobeni

SA falls further down rankings of cheap electricity producers

South Africa is ranked 11th out of 16 major electricity markets, as Canada retains its position as the country with the cheapest power SA is continuing its slide down the rankings of countries with cheap electricity, and the next round of increases will affect the competitiveness of key industries. After losing its place to Canada as the cheapest power provider last year, SA dropped further in international energy consultant NUS Consulting Groups survey of 16 major electricity markets, released yesterday. SA ranked 11th and Canada retained its position as the country with the cheapest power.

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With a 23,1% increase this year, SA had the second highest "one-year percentage change", NUS found. Australia had the highest increase in prices, with 27,8%. Eskom is on the verge of making its submission to the National Energy Regulator of SA for the next round of annual price increases. It wants electricity prices to rise from 50,3c/kWh to 97,51c/kWh by 2017. Anton Eberhard, a member of the National Planning Commission and professor at the University of Cape Towns Graduate School of Business, said electricity prices were allowed to fall below cost-effective levels in the 1990s and early 2000s, but the long-term viability of the electricity industry depended on price rises. "However, there are concerns about the extent and rate of current price increases," said Prof Eberhard. "Electricity is no longer cheap and, if projected price increases materialise, SA will certainly not be internationally competitive in terms of energy costs. Already we see the impact on some of the minerals beneficiation industries." Citing high electricity costs, Aquarius Platinum recently closed two mines, Royal Bafokeng Platinum curtailed three projects and the Xstrata-Merafe joint ventures chrome smelters are operating at half-capacity until August. Eskom spokeswoman Hilary Joffe said yesterday that large users paid higher tariffs in winter as much as six times more than summer off-peak tariffs. Prof Eberhard said SAs ferrochrome smelters were struggling to compete internationally. "For a country with huge mineral resources, this is a matter of concern. Ways need to be found to smooth the rate of electricity price increases over time," he said. "However, this will not be easy and the latest procurement of renewable energy at prices two to four times Eskoms current average electricity tariff will result in further increases, as will any possible future carbon tax." NUS said it and most analysts expected electricity prices to rise "for many years to come". It said the price of natural gas had increased 24,3% in SA in the past year, and it was now the second most expensive, after Sweden. "Although gas is imported from neighbouring countries such as Mozambique, geopolitical instability in the Middle East has an effect on prices," NUS SA national manager Elton Bosch said yesterday. Gas prices were expected to fall when international oil prices fell, he said. Mr Bosch said low demand due to the slowdown of the Chinese economy and the

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oversupply of oil would push prices down. 28 June 2012 Business Day Page 1 Evan Pickworth

Nafcoc to launch black-owned bank in bid to grow small businesses

The National African Federated Chamber of Commerce and Industry (Nafcoc) plans to launch a mass market, black-owned "mega" bank this year that will mimic the Chinese model and grow small businesses. This is not the first time Nafcoc has tried its hand at banking it failed to establish African Bank and Future Bank 40 years ago. "Now we want to do it properly," secretary-general Gilbert Mosena said yesterday. The initiative will attempt to fill the gap in SAs financial services sector the unbanked make up more than a third of the population and provide funding for black businesses finding it tough to access finance. MrMosena said the process had already started as Nafcoc had established co-operative banks across 19 business sectors in the nine provinces, where the likes of tavern owners and taxi associations participated. It now wanted to scale up by obtaining a commercial banking licence. Copying the Chinese Mega Bank model, the organisation intends to use its alliance with the Black Business Council (BBC) to grow black-owned small and medium-sized businesses. Nafcoc is a member of the BBC, which broke away from Business Unity SA (Busa) in September last year after a spat over transformation. Nafcoc quit Busa in 2009. Both organisations are calling on the government to prioritise black business development. Nafcoc plans to use the influence of the BBC to grow its bank into a "mega bank" that will service the construction, retail, mining and property sectors. It also plans to list one of its investment units on the JSE before the end of the year, probably its property portfolio. The business organisation has also called on the government to pass legislation that would regulate and protect SAs small, micro and medium-sized enterprises by limiting foreign participation in the economy. It plans to lobby the South African Local Government Association and relevant government departments to ensure that more than 51% of SAs prime land and the 19

development of township and rural centre shopping malls be reserved for black business. "This domain is strictly for local businessman, so foreigners only come in as real investors rather than as small business operators that compete with locals," MrMosena said. "So a company like Shoprite shouldnt come down (to townships and rural areas), but must partner with people in business there." Nafcoc also wants the government to "scale down some social ministries" and create two new ministries for black economic empowerment (BEE) and for small business that will concentrate on creating wealth. The BBC also proposed a small business ministry this month. "The big guys and foreign internationals are calling the shots. We must give them a hiding and allow it so that everybody can participate," said Nafcoc deputy president Steve Skhosana. "Black small business hasnt benefited from BEE," he said. Nafcoc also wants the government to consider expropriating the assets of colluding companies that do not comply with competition rules. The organisation was clearly emboldened by its conference last weekend. Nafcoc was reportedly broke in late 2010, with its head office staff splashing out on fancy cars for its council members. But the BBC, headed by SAs richest man, Patrice Motsepe, has been resurrected and Nafcoc is its major constituent. 24 June 2012 The Sunday Independent Page 5 Moffet Mofokeng

Kodwa trapped in Zumas battle against youth leagueinsider

Mistrust among top officials in the presidency has allegedly led to the departure of President Jacob Zumas special communications adviser, Zizi Kodwa. Appointed in 2010 to rescue Zuma from what the presidency perceived as a media siege, Kodwa left the presidency this month to join the Gauteng Film Commission as manager for communications and marketing. It is a less powerful position for a man who was once the strategic voice of the highest office in the land.

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Zuma personally asked for Kodwa to move from Luthuli House to Mahlambandlopfu to take over communication shortly after the presidents sex scandal in 2010. It was felt that his communication aides were failing to polish the presidents battered image following news of Zuma fathering a child out of the wedlock with Sonono Khoza. Kodwa, an effective and charming communicator, was one of Zumas trusted lieutenants. But the former youth league spokesman was apparently caught in the succession crossfire as his former comrades turned on each other, a government official said. He refused to be named because he was not authorised to speak publicly. This was after a fallout between Zuma and the expelled ANC Youth League president Julius Malema. On the one hand, Kodwas former comrades Sports Minister Fikile Mbalula and Malema could not trust the spokesman of their nemesis. On the other hand, some in the presidency including Zuma apparently started being suspicious of Kodwa, who was still socially closer to the youth league circle. Kodwa was often seen at the two former youth leaders functions at the time the presidents relationship with Malema and Mbalula was at its lowest ebb. At one stage, Kodwa was even suspected of leaking information from the presidency while the Malema-Mbalula circle also thought he was a sell out, according to a second source close to Kodwa and Mbalula. The source said none of these suspicions could be proven, but Zizi found it difficult to maintain the balance between his boss and his friends. The suspicions led to Zuma appointing former transport minister Mac Maharaj as presidential spokesman. This effectively sidelined Kodwa, who although brought in as adviser was the communications chief for the president. He initially created a bridge between the president, who was paranoid about journalists motives, and the media. Ironically, Kodwa was one of those who were instrumental in leading a pro-Zuma campaign against former president Thabo Mbeki. This week Kodwa said he went into his job knowing that he wouldnt be loved by everyone, without elaborating. My conscience is clear. The person I worked for never had doubts, he said. He said he would help Zuma as and when he wants me to.

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I served him with loyalty and dedication. That still stands. We will support him as and when it is necessary. I thank him for appointing me. It is an honour because there are many South Africans who are better communicators and he chose Zizi. I thank him for that, Kodwa said. He said he could not respond to rumours and perception about being caught between Malema and Zuma. Maharaj could not be drawn into the alleged mistrusts in the presidency. The simple issue is that as an adviser, he felt that his work was not fully stretching him and he got the position as marketing manager (at the film commission), said Maharaj yesterday morning. The Presidency announced that Kodwa quit his job at the beginning of this month while former defence minister Charles Nqakula, who was the presidents political adviser, had been appointed high commissioner to Mozambique. He will depart at the end of this month. Nqakula was also never used effectively as a political adviser because he was seen as one of the remnants of the Mbeki era who were hired by Zuma to accommodate warring factions. Zuma mostly depended on ANC officials or his political confidants for political advice. Kodwa and Nqakula are among the Zuma presidency staff who have left in the past three years amid tensions and infighting. Others include former presidential spokesman Vincent Magwenya, former communications head Vusi Mona, former director-general Vusi Mavimbela, former chief operating officer Jessie Duarte and former economic adviser Mandisi Mpahlwa. Some blamed power relations between the senior staff and Zumas key confidant and head of private office, Lakela Kaunda. She has since dismissed such allegations. 25 June 2012 The Times Page 9 Justice Malala

ANC a hissing pressure cooker

There is no doubt that the ANC is in huge trouble and deep pain. This is no longer in question. The symptoms are there for all to see.

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As it goes into its policy conference this week, the party's provincial structures are in tatters and its leaders are at war with each other. The North West ANC has experienced a coup d'etat. The Free State ANC is composed of leaders who openly defy their national leaders. The Limpopo ANC is virtually an independent structure, in open war with the party's national leaders. The Western Cape provincial structure is in so much debt that the sheriff has attached its office furniture, it is ineffective as an opposition in the provincial legislature and it is divided. The same goes for the party in Eastern Cape. The leadership in Northern Cape faces such serious corruption charges that it boggles the mind that it has been returned to power so emphatically. This is not an organisation whose mission is to liberate ordinary South Africans from poverty. It is a party that has been hijacked by people whose aim is to loot the state as quickly as possible before the taps are shut. This applies not just to the provinces. At national level, corruption flourishes, the party's leaders are at each other's throats and the national executive committee leaks like a sieve. Tragically, the divisions are not between different ideological strands. They are between three ideologically similar strands: a corrupt faction that is in power and wants to perpetuate its hold on it; another corrupt faction that wants to be at the feeding trough; and a third, weaker, strand that believes it can return the party to its former glory. Ideological contestation is dead in the ANC. There is no real effort to push the ANC left or right. Such questions arise only in relation to who is pushing what policy line. It has nothing to do with what the party can do for its constituency. It has not always been like this. Whatever one may say about the ANC today, it needs to be said to its credit that the new South Africa owes it a debt of gratitude. No party could have held South Africa together as the ANC has done for the past 18 years. It gave hope to the poorest of the poor that their lot will be bettered. It gave hope to the landowners and the wealthy that their property rights would be protected. It kept a balance. The National Party, the PAC, Azapo, the Democratic Party of the 1990s - none of them could have come even close to pulling off this feat. It was a balancing act that required leadership, sacrifice, patience and, above all, vision. The ANC had this and it pulled out every stop to make sure that we were set on the road to stability. It was a different ANC then. Even though many of its leaders were living in abject poverty, like the majority of the people, making as much money as quickly as possible, with no regard for the needs of the populace, was not the leaders' priority then.

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But not now. Not anymore. This has massive implications for the future of the ANC and for our future as a country. The key question of the week ahead is how long the ANC can keep itself together without its internal ructions totally destroying the party. Don't be fooled into thinking that, just because the ANC is divided, and ruled by fear and loathing, that it will implode quickly. Empires, and corrupt empires in particular, are kept together by common interests. In this case, the largesse that comes with the continued hegemony of the ANC is such that it has, as we saw in 2007, before Thabo Mbeki was kicked out, made enemies of friends and friends of enemies. What is keeping many within the ANC now is that they cannot contemplate a future outside the party. This is a lesson learnt extremely harshly by those who went with the Congress of the People in 2009. This is a lesson being learnt by expelled ANC Youth League leader Julius Malema. It's freezing out there. So the pressure cooker remains inside the party for now. But no organisation can withstand such intense pressure for decades. As communities begin to protest about service delivery, as ANC leaders continue to look away and line their pockets, the pressure will rise. Something will have to give. So the question for this conference, as the ANC puts useless plasters over its deep wounds this week, is whether it is capable of sorting itself out and charting a new way. If not, then how long can the ANC hold itself together? And if it cannot, what is going to happen when it eventually loses power? 25 June 2012 Business Day Page 1 Natasha Marrian

Zuma hits out at critics of second transition document

President Jacob Zuma challenges critics to propose a better plan to tackle poverty, inequality and unemployment President Jacob Zuma yesterday took on his detractors and critics of the "second transition", challenging them to propose a better plan to tackle poverty, inequality and unemployment. The " second transition", the African National Congresss (ANCs) strategy and tactics document to be discussed at its policy conference starting tomorrow, has become a proxy for the leadership battle ahead of its elective conference in Mangaung in December, with

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those opposing a second term for Mr Zuma appearing to be more sceptical of the contents of the document. It describes the first transition as the attainment of political freedom and calls for a move to a second transition emphasising economic and social transformation, aimed at addressing unemployment, poverty and inequality. Deputy President Kgalema Motlanthe , who is seen as a challenger for the ANC throne in December, tore apart the document during a lecture earlier this month, questioning its motives. He said it was "packed with Marxist jargon" and urged the party to focus on renewing itself and on self-reflection to examine whether it had been successful in implementing its own resolutions. Mr Zuma stepped up his defence of the document, saying ANC policy documents were subjected to a "very thorough methodical system" of preparation, with discussions about them among the partys top leaders, in the national working committee and the national executive committee (NEC). Only after scrutiny by the party s top brass were they dispatched to branches for discussion, Mr Zuma said. "Comrades at leadership level in particular had an opportunity to see them, not once, many times. In fact, the NEC discussed this document three times, so it is inconceivable that a member of the NEC says hes not aware of these," he said during the closing address at the ANCs Free State conference in Parys. He indicated he was ready to take on critics of the document. Mr Zuma also spoke out against those in the ANC Youth League who insulted party leaders, saying "only those who dont have the ANC in their blood would do so". The Mangaung conference had to "reaffirm" the party as a "disciplined force of the left with a bias toward the poor and the working class". Mr Zuma said the partys "character" may have been "diluted" by the compromises made in 1994 which was natural since democracy was attained through a negotiated settlement with sunset clauses. "We had to negotiate and many of the programmes that are going on are programmes born out of a negotiated settlement. There were sunset clauses (in the constitution), there were no sunrise clauses, the time has come that we must have a second transition so that we can address the legacy of apartheid." Initial drafts of the strategy document contained changes to the constitution in order to accomplish the required economic and social change. A watered-down version was made public. "We have got to do what is our task to change the quality of our peoples lives and come with programmes that will do so," Mr Zuma said.

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25 June 2012 Business Day Page 2 Setumo Stone

Much more than just ANC policy at stake

Internal leadership squabbles may be a prominent feature of proceedings at the African National Congress national policy conference African National Congress (ANC) policy trends take centre stage this week at the partys national policy conference starting tomorrow in Midrand, amid expectations it could provide clues on the unfolding of the succession race in Mangaung in December. The conference is meant to set out the ruling partys policy roadmap for the next five years, which would then become official party policy in December. However, internal leadership squabbles may be a prominent feature of proceedings. Indications ahead of the gathering were that discussions of draft policy proposals were already proxy debates over succession. The strategy and tactics document titled The Second Transition? has elicited favourable views from leaders seen to be close to President Jacob Zuma s re-election bid, while his opponents have largely dismissed it. At least five provinces and the ANC Youth League are expected to push for the ANC to adopt some policy on nationalisation, as well as a radical shift on land reform. The leagues autonomy is also expected to come into the mix after disciplinary steps against its leadership. The ANC in Limpopo resolved at a provincial general council earlier this month to place the administrative takeover of its five provincial government departments on the policy conferences agenda. The province is expected to make recommendations on "the role and function of the ANC when such decisions are taken". Limpopo and the youth league also want the ANC to reverse Julius Malema s expulsion. Mr Zuma is expected to give the opening address tomorrow morning. He will go into the conference with renewed confidence, after his supporters in the Free State won the provincial leadership battle at the weekend. According to reports, provincial chairman and premier Ace Magashule took matters a step further and publicly endorsed Mr Zuma for a second term. A critical political intervention is also on the cards for the ANC in North West, after a week of organisational instability due to power struggles between provincial chairman, Supra Mahumapelo, and provincial secretary, Kabelo Mataboge. ANC national executive

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committee members assigned to provide oversight in the province will meet the national officials to chart a way forward for its ailing structures. At the centre of the feud between the two leaders are attempts to consolidate power ahead of Mangaung. Mr Mahumapelo is expected to back Mr Zuma for a second term, while Mr Mataboge is linked to the campaign for Deputy President Kgalema Motlanthe . Meanwhile, the Johannesburg Labour Court is expected to deliver judgment today on the bid by suspended head of police crime intelligence, Richard Mdluli, to overturn his suspension. This was despite the North Gauteng High Court order earlier this month banning L t-Gen Mdluli from performing any police functions pending a judicial review of the decisions that led to criminal charges against him being dropped. Despite Mr Zuma appointing Mangwashi Victoria Phiyega as the new police commissioner about two weeks ago, former acting commissioner NhlanhlaMkhwanazi is still the defendant. Later today, Mr Zuma will host business and government leaders from Brazil, Russia, India, China and SA at the start of the Brics Colloquium, which is expected to continue on the sidelines of the policy conference throughout the week. Business people will be treated to an up-close and personal interaction with Mr Zuma and the Cabinet. The event, organised by the ANCs Progressive Business Forum, raised eyebrows last week when it was revealed that a presidential table of 10 would cost R500000. On Saturday, the president will address a post-conference rally at the FNB Stadium, Soweto.

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25 June 2012 Business Day Page 3 Natasha Marrian

Youth league angered by presence of axed Mabe

THE African National Congress (ANC) Youth League has reacted angrily to the presence of its axed treasurer, Pule Mabe, at the ANC Free State provincial conference in Parys at the weekend, saying The move was incomprehensible and undermined the league s autonomy.

The rifts in the upper echelons of the league were laid bare when a motion of no confidence in Mr Mabe was passed last month and he was removed from his key post as treasurer and from the leagues national executive committee.

Mr Mabe, who was previously part of the leagues collective which called for the removal of President Jacob Zuma , sang songs praising Mr Zuma at the conference.

Re-elected Free State chairman, Ace Magashule, welcomed Mr Mabe on stage and hailed him as the new "leader" of the league.

Mr Mabe sat beside Mr Magashule during the proceedings. Mr Magashule, the ANCs longest-standing provincial chairman, is Mr Zumas close ally.

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However, league spokeswoman Magdalene Moonsamy questioned the presence of Mr Mabe at the Free State conference and his endorsement as a leader by Mr Magashule.

She said the motion of no confidence in Mr Mabe remained in place and he no longer held the position of treasurer, nor was he part of the leagues executive. "This exposes an intention to undermine the autonomy of the (youth league) and its ability to take decisions on its own leadership," she said.

Delivering his political report on Friday, Mr Magashule criticised former youth league president Julius Malema, without referring to him by name. "If you have made a mistake as an individual because you found out Zuma will not make you rich, you have joined the wrong organisation. President Zuma and the ANC does not owe any of us, thats why you must respect this organisation.

"How can you as a young man remind Zuma about the history of the ANC? You were born yesterday you have never been part of the struggle," Mr Magashule said.

He hailed Mr Zuma as an "internationalist and an intellectual", and said Mr Zuma was being called a dictator, yet he was a "simple, humble leader" who never "ran politics with anger".

He was adamant that Mr Malema would not be able to appeal against his expulsion at the ANCs Mangaung conference in December, as this was not allowed by the ANCs constitution. Throughout his address, Mr Magashule held a copy of the partys constitution.

The partys provincial conference ended yesterday, with an address by Mr Zuma.

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25 June 2012 Business Day Page 3 Setumo Stone

ANC must adapt or die, says Mbalula

Sports Minister Fikile Mbalula says the African National Congress might face its end if it did not use this weeks national policy conference to chart its longer-term survival THE African National Congress (ANC) might face its end if it did not use this weeks national policy conference to chart its longer-term survival, Sports Minister FikileMbalula said yesterday. If it did not, he said, the ruling party would go to its centennial conference in Mangaung later this year to "erect a tombstone". Mr Mbalula, who is a member of the ANCs national executive committee, has been proposed by those seeking a change of leadership in the ANC as a contender for the post of secretary-general. That would pit him against the incumbent, Gwede Mantashe. The conference sets out the ANCs policy road map for the next five years, and becomes official party policy in Mangaung in December. Much of the succession debate has been about younger leaders, such as Mr Mbalula, to run critical posts. The secretary-general is the chief administrative officer of the party. The ANC constitution last amended in 2007 says that in the absence of the president and the deputy president, the secretary-general assumes the presidents functions. Mr Mbalula said the policy conference, from tomorrow until Friday, was a "launching pad" for new ideas that would make the ANC a better organisation after Mangaung, and that delegates should not be "intimidated from thinking". "The policy conference must be the centre stage of setting in motion processes towards the national conference," Mr Mbalula said. "If we do not adapt, we will die." As the ANCs head of organising and campaigns, Mr Mbalula has been widely credited with the partys 2009 election victory, amid threats that its voter base could shrink drastically due to the formation of the Congress of the People a splinter party from the ANC and longstanding corruption charges against President Jacob Zuma . For this reason some believe he has the organisational skill to take over the partys running.

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However, the ANCs election processes have proven weak in the face of entrenched factionalism, stifling competition among candidates. Mr Mbalula said the process of electing leaders in the ANC had to be improved, with more emphasis placed on the partys document, Through the Eye of the Needle, which sets out leadership qualities. "We must ensure the leadership election is tied to the understanding of cadre (deployment) policy, and that people do not become leaders simply because of the dominance of a particular faction," he said. Mr Mbalula said this weeks talks must push for more full-time officials with sound political knowledge, "so that even at the slightest possibility of becoming an opposition, the ANC must not die". "As our strategic objective," he said, " we want to remain in power forever ." He said that part of the ANCs weakness was that the secretary-general was the only fulltime official. "We need to ensure that we have full time component of political people at Luthuli House, which at the moment has been sacrificed at the expense of government."

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24 June 2012 The Sunday Independent Page 13 Staff

Battle lines are drawn in Midrand

Feathers are expected to fly at the ANCs policy conference in Midrand next week when discussion turns to the partys second transition document, which calls for socioeconomic transformation to follow the first transition of the political change of the first 18 years of democracy. In the run-up to the gathering, as most ANC provinces forward their policy declarations to Luthuli House, there is an emerging broad sweep of policy convergence largely against nationalisation, uniformly in favour of scrapping the willing seller, willing buyer principle in land reform, and a smattering of province-specific proposals such as Gautengs suggested alternative funding for e-tolls, the Northern Capes demand that returning party defectors serve five years as ordinary members before being eligible for party posts, and Mpumalangas wish to see the sod turned for its planned university before December. The second transition policy paper is the only one, aside from the organisational renewal document, which speaks directly about the future political mindset and direction of the ANC, which, it says, is led by the working class defined as workers, the unemployed and the rural poor. But the ANC in Gauteng, Limpopo and the Eastern and Western Cape, labour federation Cosatu and deputy president Kgalema Motlanthe have all expressed concerns about the second transition documents shortcomings. Motlanthe recently said it contained smatterings of Marxist jargon and failed to define the first transition, and its tasks. The Gauteng ANC called it an expression of impatience without the necessary analysis and instead called for a full and comprehensive review of the ANCs performance since its 2007 Polokwane conference. Although Limpopo did not mention the second transition per se, but talked of strategy and tactics, it criticised the poor and under-theorisation on why the ANC-led movement has not fully utilised its political power. The Eastern Cape general council agreed the paper was misleading, with one member who attended adding there was consensus that it was incorrect to talk of a second transition without outlining the political context of the first for example, reconciliation and lessons learnt.

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Western Cape ANC secretary Songezo Mjongile said there could not be a second transition because it was all a seamless process since 1994: Weve not made progress. You cant say, when youve not made progress, youre starting a new phase. Cosatu cautioned this week that the devil would be in the detail. Acknowledging the labour federations long-standing call for fundamental economic and social transformation, Cosatu spokesman Patrick Craven criticised attempts to link the second transition discussion document to one or another faction in the underground succession battle gripping the ruling party. However, the factional dynamics are transparent: Motlanthe has long been portrayed as a potential candidate for party presidency, Gauteng is not known to be enthusiastic about President Jacob Zuma, Limpopo has been outspoken about leadership change and the second-largest ANC province, the Eastern Cape, is torn between the two camps. While Cosatu strongly denies its ranks are split between those for and against Zuma, it is a vocal critic of the governments track-record, corruption and tenderpreneurs. In contrast, KwaZulu-Natal, the ANCs largest region and Zumas home turf, supports the second transition as the next phase which should be characterised by a decisive and radical focus on socio-economic transformation. And the incumbent president recently started using public platforms to tout the second transition as the blueprint for SA to deal with poverty, unemployment and inequality amid global financial instability. Zuma finds, unexpectedly, an ally in the ANC Youth League. Its policy boss Abner Mosase said they (the ANC) are trying to articulate economic freedom in our lifetime a youth league battle cry and while the language of the document was reformist, it was supported. However, the youth league wanted a change in the way the ANC defined itself, from a disciplined to a radical force of the left, to avoid the confusion of discipline with punishment in reference to the expulsion of youth league leader Julius Malema. At the heart of the second transition document is how the ANC sees itself, the state and society. While the states poor capacity is deplored, theres little in the way of solutions to deal with the highly politicised civil service to ensure a focus on delivery. However, in what must be music to Cosatus ears, the working class are deemed the leaders in society. But the analysis of the middle strata, or middle class, is somewhat vague: while acknowledging it has the skills and ideas to shape the country, the discussion document merely states the ANC should focus particularly on students, young professionals, entrepreneurs and cultural activists.

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Also shaky is the assessment of the patriotic bourgeoisie, or black capitalists who have emerged since 1994. Outlining a clear role for them in job creation, industrialisation, skills development and the like, the document doesnt really tackle reasons this is not happening. The dependence of this stratum on white and multinational capital and the state, makes some susceptible to pursue narrow interests, which may not always be in the interest of economic transformation, it says. Regarding the white community, the second transition document says the ANC must engage it further as electoral patterns show a lack of support, even though the transition to democracy was in the long-term interests of whites. Equally brief is the input on private, predominantly white capital described as a relationship of unity and struggle of opposites of co-operation and contestation in the quest to transform the structure of, and grow, the economy. But white capital was a critical part of a socio-economic transition and, despite its own agenda, the ANC will have to engage and struggle to ensure that our vision forms the basis of national consensus, the document says. It is this approach that Limpopo takes issue with, saying white monopoly capital has been the obstacle to SAs economic transformation since it transferred domestically generated profits out of the country. Disagreeing with the mechanical separation of political and economic transition, Limpopo says it is nevertheless time to tackle growing inequalities by uprooting unequal access to economic production. Hence, the call for the nationalisation of mines. We have great platinum and coal deposits and yet we are one of the poorest provinces If we come back from policy conference (with agreement on nationalisation) we have won, said provincial party spokesman Makonde Mathivha. On nationalisation, Limpopo seems to be joined by the Eastern Cape and, tangentially, the Western Cape, which calls on the state to take ownership in strategic areas in line with the Freedom Charter. Other provinces endorse a greater role for the state through taxes, royalties and beneficiation. However, all ANC provinces are calling for the scrapping of the willing seller, willing buyer principle to speed up land reform. The willing seller, willing buyer (principle) has derailed us, but we are not calling for what the ANC Youth League advocates, grabbing of land without compensation, said Mpumalanga ANC secretary Lucky Ndinisa, adding an amicable solution involving everyone, from farmers to labourers and tenants, must be found.

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But Limpopo also stands out as the only province to declare on leadership highlighting continuity and change in the national ANC leadership after a similar push in Gauteng went nowhere. There would be a call for changes, while others would stay, on the basis of who could deliver and who had implemented the resolutions of the 2007 Polokwane ANC conference. The North West has not submitted its policy declaration because its general council was dominated by the removal of chairman Supra Mahumapelo and others a move now subject to an intervention by national ANC officials who meet again tomorrow (Monday). And the Free State will submit its declaration after this weekends provincial conference. As a committee chaired by ANC policy head, Justice Minister Jeff Radebe, is compiling provincial inputs for presentation to the various policy conference commissions, the ANC is confident all logistics are in place. Said ANC national spokesman Jackson Mthembu: We are preparing for a second transition. The heated debates (will be on) what are those things that we need to do differently to ensure economic empowerment of our people, to ensure social upliftment. Critics say several ANC policy proposals contradict one another. Many proposals echo existing government policy or revisit previous ANC national conference resolutions all without outlining steps to turn policies into delivery and, ultimately, transformation. For example, the proposals to establish a land valuer-general and a land management agency are included already in the governments green paper on land reform, and the National Health Insurance is already being implemented in several pilot schemes. The single police service is again on the agenda, as it was at the 2007 Polokwane conference. Transformation of the judiciary appears to be a standing item, as it has been among policy resolutions of national conferences since the 1997 Mafikeng meeting. The contest over the second transition takes place in the shadow of the unofficial, yet raging, succession debate. But without agreement on this political framework, the ANC, and government, may well find itself being a rudderless ship regardless of who clinches the top job at the Mangaung national conference.

29 June 2012 Cape Times Page 1 Ivor Powell

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Zumas new bling Boeing to cost R2bn

The Secretary of Defence, Dr Sam Makhudu Gulube, is in the US on a two-week trip to finalise the purchase of a megabling VIP jet for President Jacob Zuma that will cost the taxpayer $235 million (nearly R2 billion) if it goes ahead. For the deal to go ahead, it would need authorisation from the National Treasury to bend rules and re-route budgetary allocations and it is unclear whether the Treasury has given the green light. The 300-seater Boeing 777200LR, earmarked as ZA1, will cost a whopping $80m to reconfigure to Zumas specifications on top of a $155m purchase price, Independent Newspapers has learnt. Also included in the deal is a $28m Global Express 600 for the deputy presidents use, bringing the total bill for the VVIP transports to $263m (more than R2.2bn). Though negotiated on the basis of cabinet approval, according to information at Independent Newspapers disposal, the deal has failed to follow normal requirements that such procurements be put out to competitive tender. Its simply wrong to spend nearly R2bn on President Jacob Zumas new Boeing 777200LR business jet when so many people in our country are poor, DA defence spokesman David Maynier said. I hope delegates at the ANCs 2012 National Policy Conference ask President Jacob Zuma to explain how a R2bn presidential business jet will help our country tackle the triple challenge of unemployment, poverty and inequality? Negotiated directly with Boeing, according to evidence in Independent Newspapers possession, the Zuma Jet was secured at a price, before reconfiguration, of $155m knocked down from $305m. Originally destined for another buyer, the 777 apparently became available when that deal fell through. But, after the SA shoppers with ministerial policy adviser and political commentator Professor Sipho Seepe serving as go-between missed an earlier deadline for a definitive agreement to be signed and sealed by May 30, the temperature went up. New deadlines were set for the middle of June, with Boeing negotiators J Miguel Santos and Carlos Horan threatening to pull the plug if the South Africans did not make concrete commitments. Seepe confirmed to Independent Newspapers that he acted as a middleman between the ministry and Boeing in pursuit of cabinet directives in respect of the VVIP aircraft. It remains unclear whether the Treasury was approached to invoke special powers to override the competitive tender specification on the basis of urgency.

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Also unclear is what budgets would be called upon to stump up on a shortfall of $183m identified by Public Service and Administration Minister Lindiwe Sisulu. This was after Sisulu, in May, indicated that the Department of Defence could find the $80m required to reconfigure and refurbish the earmarked Zuma plane. She was also of the opinion that, by reprioritising budgets and expenditures, the department could cover the hefty operational costs for the two planes. One solution proposed by Sisulu at the time was that refunds, received from European manufacturer Airbus after the summary cancellation of its orders for the Airbus A400 M, be returned from the fiscus to the department to fund the VVIP transports. The Treasury however has remained tight-lipped on whether authorisation was given to the re-routing of government funds as suggested by the Defence Department. Another deviation from normal practice mooted in the departments apparent haste to push the contracts through, was to acquire the planes via SAA as opposed to the SA Air Force, the authority relevantly mandated for VVIP air travel. Such a procedure would be possible, Independent Newspapers has learned, under Treasury regulations which allow for other organs of state to be used for procurement purposes. However, such procedures do not obviate the overriding requirement for going to a competitive tender process. Approached for comment, Finance Ministry spokesperson Jabulani Sikhakhane confirmed: National Treasury was consulted, as is normal with matters of this nature. However, the Treasury was not in a position to disclose its specific recommendations. The governments planned spending spree comes at a time when earlier blunders and misadventures around VIP air transports could cost the country billions in months and years to come. Nigerian-owned Adonai Aviation, awarded a five-year lease contract to the value of R826m in 2010, which was subsequently summarily cancelled, continues to be in litigation with the Department of Defence demanding a review of the cancellation of its contract. If successful, the review would open the door to multi-billion rand damages claims. Meanwhile, the current presidential jet Inkwazi was returned to service at the beginning of 2012 after being out of service for most of 2011 for routine upgrades and maintenance. The Boeing 777 is the worlds largest twin-engined aircraft, and moreover has the longest range of any aircraft in commercial use. Contacted for comment, Department of Defence spokesman Siphiwe Dlamini said there was a new minister at the helm, who was still being briefed: These briefings are to allow

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the minister to familiarise herself with issues that need to be attended to by her department. Once these are concluded we will be able to engage. The briefings started a week ago and had to be postponed as she had to attend the ruling partys policy conference. 29 June 2012 Cape Times Page 1 Marianne Merten

ANC proposes integrity panel to test allegations and remove bad apples
ANC leaders facing corruption or criminal charges or accusations of mismanaging their government posts may have to step aside even before court or other official proceedings unfold. This was one of the proposals on organisational renewal agreed to at the partys policy conference Midrand last night. It is proposed that when accusations are made, an integrity commission come into play to test the allegations. After this, the integrity commission could not only ask the ANC leader to step aside, but refer the matter to the partys disciplinary processes. David Makhura, an ANC national executive committee member and party secretary in Gauteng, said everyone had agreed on the urgent need to address the troubled image of the ANC. He said there was a new sense of urgency and the organisation could not be held hostage to protracted court processes. A high-profile example of an ANC leader facing corruption charges is Northern Cape party chairman John Block, who was reelected earlier this month. Block faces two court cases relating to the acquisition of water tanks, for the Kimberley Hospital and then for the Sol Plaatjiemunicipality, and both involving Cape Town-based Uruguayan businessman Gaston Savoi. However, neither Makhura nor Sports Minister FikileMbalula, who also heads the ANCs organisation building and mobilisation unit, commented on this example.

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The policy indaba also agreed to proposals banning lobbying, a requirement for a declaration of interests by those wanting to stand for office and their vetting by the integrity commission. The policy conference also endorsed the regulation of private funding for political parties, saying the ANC was ready for this. 28 June 2012 Business Day Page 3 Natasha Marrian

Youth league has veered off the rails, says Gigaba

ANC national executive committee member Malusi Gigaba says the youth league has become obsessed with the leadership of the party The African National Congress (ANC) Youth League leadership had "veered off the rails" and become obsessed with the leadership of the party, says former youth league president and national executive committee (NEC) member Malusi Gigaba . Shortly after the expulsion of former league president Julius Malema, deputy Ronald Lamola was lambasted by the ANC last week for criticising President Jacob Zuma . In recent years, the relationship between the league and ANC has been acrimonious, with league leaders at the forefront of the bid to prevent MrZuma from achieving a second term in office. Ironically, Mr Malema and the league under its previous president, now sports minister, Fikile Mbalula, were instrumental in Mr Zumas rise to the ruling partys presidency. Mr Gigaba, who is also public enterprises minister, spoke out this week about the current generation of league leaders, admonishing them for allegedly failing to champion the causes of their own constituency. "Is it necessary for you to be so obsessed with the leadership of the ANC and to say nothing or very little about the challenges facing young people at the present stage? About the challenges facing the ANC?" he asked. The league should have volunteered to deliver textbooks in Limpopo and the Eastern Cape and assisted with the education woes in those provinces, but instead its energies were occupied with talking about and insulting Mr Zuma. "I think the leadership of the league has derailed. I think theyve veered totally off the rail, they have become an impediment for the youth understanding the ANC as they should, and they have become an impediment for the ANC reaching out to the youth as it

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should," he said. "There is no longer that seamless point of contact; they have raised themselves as an obstacle and I think that the ANC must deal with this." Members of the league leadership should be summoned by the party at some point and told that they were wrong, he said. "It might be necessary at some point for the ANC NEC to summon the (youth league) NEC and say ... you are firing people without due process, you are dissolving your structures, you are undermining your own constitution, you are playing an oppositional role to the ANC." The youth league recently passed a motion of no confidence in its treasurer, Pule Mabe, said to have ambitions of replacing Mr Malema. It has had to beef up its national working committee to assist with the running of the organisation, with only two of its top five leaders remaining in their positions. Its secretary-general, Sindiso Magaqa, was suspended for a year in the disciplinary process that led to Mr Malemas expulsion. They were sanctioned for sowing disunity and bringing the ANC into disrepute. "I think the ANC needs to help the youth league to refocus on the challenges of its constituency, that does not mean that the youth league does not have a right to be critical," Mr Gigaba said. "The rights and duties of the league to make mistakes must not be turned into a fetish. The autonomy of the youth league is given by the ANC consciously, it was not coerced or even cajoled." Mr Gigaba warned that the league should heed its elders, learn from its mistakes and when it failed to listen, the ANC should "wield the stick". Mr Gigaba said the league should be a point of contact between the youth and the ANC, and it was also the ANCs duty to support its youth league.

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