S.Africa’s ANC Says Fiscal, Monetary Policy to Stay

JOHANNESBURG – South Africa’s new government under Jacob Zuma will leave the country’s conservative fiscal and monetary policies in place, a top ruling party official said.

African National Congress Treasurer-General Mathews Phosa said at an emerging markets conference in London the government would focus on improving public services to uplift the lives of the poor.

“The incoming president will verbalise his own economic policies … but we have repeatedly stated that our conservative fiscal and monetary policies will remain in place,” he said in a copy of a speech released on Wednesday.

The ANC won 65.9 percent of the vote in last week’s election, setting Zuma up for the presidency. The ANC leader will be inaugurated on May 9 and is expected to announce his cabinet soon after that.

The fate of respected Finance Minister Trevor Manuel and the course of economic policy will be closely watched by investors hoping for continuity in Africa’s biggest economy.

South Africa enjoyed its longest period of economic growth under Manuel, but the ANC’s left wing allies — trade unions and the communist party — have been pushing for a shift away from the market-friendly stance that they say have kept millions of people in poverty.

Phosa said the new government would change structures that that hampered progress and would strive to improve the lives of the poor, while taking into consideration the current global challenges.

“It is safe to say that you can expect the government of President-elect Jacob Zuma to focus its attention, policies and delivery on providing a bouquet of health, education, housing and infrastructure services to accelerate socio-economic transformation in South Africa,” he said.  

“To ensure that this agenda is elevated to national priority you can expect a number of structural, policy and management changes to be announced in the next month or two.”

After a decade of growth, South Africa may already be in its first recssion in 17 years, stung by a global downturn and financial market instability.

The economy contracted by 1.8 percent in the fourth quarter of last year and weak output indicators in the first three months of 2009 point to another decline in Q1.

Phosa also reiterated the ANC had no intention of changing the country’s constitution.

The party fell just short of the two-thirds win in the election to give it the right to alter the constitution at will.

Manuel is tipped to head up a powerful new planning commission to oversee departments, boost delivery of services and lift economic growth, although it was unclear whether the new body would be situated within or outside the cabinet.

Phosa told Reuters on Monday that Manuel would continue to serve at cabinet level.

A source familiar with the issue said Manuel could be appointed as a deputy president with the task of running the commission from within the presidency.

Pravin Gordhan, the head of the tax authority, is seen as the frontrunner to succeed him as finance minister.-Reuters