The ruling ANC has for many years called for radical transformation, of society and the economy, to attain “shared prosperity, social justice and human solidarity”. Yet it is still not clear what radical policies and tactics will be employed. Its nine Discussion Documents, prepared for its National Policy Conference starting on 30 June, do not in general reveal much that is radical, in our assessment. Radical interventions may well be formulated at the Policy Conference in July and adopted at the Elective Conference in December 2017, but for now we highlight the following themes:

The Discussion Documents in general reveal: first, honest self-reflection on the recent failings of the party and the need for renewal to arrest its “declining fortunes”; second, a continued reference to the National Development Plan, as the guiding long-term plan; third, statements on fiscal and monetary policy that investors will find reassuring, in our view; fourth, acknowledgements of where policy and tactics have not worked and which need to be reformed; fifth, a continued devotion to the utilization of state-owned enterprises as channels for economic development; and sixth, a desire to transform the other three pillars of the state – the legislature, the judiciary and the media. A final general observation is that the documents, as they currently stand, allow for wide interpretation of what radical transformation would look like and how it would be achieved. Herein lies the uncertainty for investors.

Of 108 key selected extracts – statements, proposals or tactics ? from the nine Discussion Documents, we consider: (a) 70 (in isolation) as positive for growth, productivity and investment; (b) 30 as neutral, either because we have uncertainty about intentions or they have little direct financial market impact; and (c) 8 as negative. Within the list of 70 ‘positive’ statements, proposals and tactics, we think that 32 have elements over which investors have doubts, be they about the ANC’s commitment, implementation, funding or unintended consequences of policies. Within the list of 30 ‘neutral’ statements, proposals and tactics, we think that 19 have elements over which investors have uncertainties. Within the list of 8 ‘negative’ statements, proposals and tactics, all will be of concern to investors.

There is much in the ANC documents that is worthy of debate and serious analysis. We are however concerned that this will not happen at the ANC’s Policy Conference, which could be used by factions to strengthen positions for the party’s leadership battle. Policy positions could end up being mere proxies for factions, according to former Deputy Finance Minister Jonas, who recently also said that populism could hijack the policy discussions.