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Published 8th June 2012

Vol 53 No 12


South Africa

Higher taxes, less nationalisation

SOUTH AFRICA Johannesburg: Miners in a gold mine. Sven Torfinn / Panos
SOUTH AFRICA Johannesburg: Miners in a gold mine. Sven Torfinn / Panos

Image courtesy of Panos Pictures

Instead of nationalisation, an ANC report proposes new taxes, a swarm of regulatory commissions and a new super-state mining company

An attempt to meet the political requirements and the economic self-interest of factions in the governing African National Congress has produced a plan for super-taxes on mining profits, partial nationalisation and a bigger state-owned mining company. ANC leaders tell us the plan will win broad support and counter the calls for wholesale nationalisation without compensation, which are pushed by the ANC Youth League (ANCYL) and its ousted leader, Julius Malema.


A born-again state mining company

The nucleus of a proposed state-owned mining company would be the existing African Exploration Mining and Finance Company (AEMFC), a wholly-owned subsidiary of the Central Energy F...


Conflicts of interest

Acting on corruption is one thing but Frelimo is having problems even passing laws against it

Proposals for anti-corruption legislation are causing severe anxiety in the governing Frente de Libertação de Moçambique. Frelimo is scrambling to bury reforms.



BLUE LINES
THE INSIDE VIEW

A curious dissonance between the African Development Bank and the West’s hyper-enthusiasm for business on the continent emerged at the Bank’s Annual General Meeting in Arusha on 31 May-1 June. Leading the charge against excessive exuberance was AfDB President Donald Kaberuka, who cautioned that turmoil in the Eurozone and the ‘ominous slowdown’ in the larger developing economies could put a brake on Africa’s recent impressive economic growth (its econo...

A curious dissonance between the African Development Bank and the West’s hyper-enthusiasm for business on the continent emerged at the Bank’s Annual General Meeting in Arusha on 31 May-1 June. Leading the charge against excessive exuberance was AfDB President Donald Kaberuka, who cautioned that turmoil in the Eurozone and the ‘ominous slowdown’ in the larger developing economies could put a brake on Africa’s recent impressive economic growth (its economies are forecast by the AfDB and World Bank to grow at around 6% on average this year).

Beyond external pressures, Africa still has to face its own socio-political and financing demons. Kaberuka warned that the return of the military in Mali and the violent partition of that country, together with the drug-fuelled instability in Guinea Bissau, mayhem in Somalia and desolation in the Sahel and the Horn could also damage the economic picture.

The AfDB insists on the distinction between headline growth statistics and economic transformation. It says much of that growth has come from a narrow range of traditional commodity exports, not from products developed through innovation and diversification. Growth hasn’t translated into jobs, opportunities for the young or wider improvements in living standards. Above all, Kaberuka said, there is the need to break ‘the intergenerational cycle of poverty’ by ensuring that all children have access to good education. All salutary messages for the new investors in Africa.

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