Rifts are over, says Alliance

2008-05-11 17:49

Johannesburg - The African National Congress and its allies said on Sunday they had overcome rifts which had emerged under President Thabo Mbeki, and vowed to tackle the country's economic and political challenges together.

Investors have been concerned that the ANC, which ousted Mbeki as party leader last year, could surrender to the left's calls for a shift away from the business-friendly policies pursued by the Mbeki government for the better part of a decade.

Jacob Zuma, who became the frontrunner to succeed Mbeki after defeating him for the ANC leadership, has pledged to work more closely with the Congress of South African Trade Unions (Cosatu) and the small, but influential, South African Communist Party (SACP).

The three groups said in a statement after a weekend conference: "It was agreed that the alliance would work together to formulate policy."

They said their focus would be on fighting price rises, unemployment, poverty and crime and dealing with a protracted power crisis that has hit the economy.

Mbeki criticised for divisions

They also would also join forces to prepare for elections in 2009. The constitution prohibits Mbeki from running for a third term as president.

Cosatu and the SACP criticised Mbeki at the opening of the summit on Friday, blaming him for divisions in the party.

But, at the close of the meeting on Sunday, the alliance dismissed reports that they had agreed to fire Mbeki.

SACP general secretary Blade Nzimande said: "There was no such decision. The matter was raised as an option by the Communist Party, but no decision was taken."

ANC secretary-general Gwede Mantashe said Mbeki was not to blame for all the problems in the country and the alliance would work closely with him until the elections next year.

The alliance also called for an end to violence and harassment of civilians in Zimbabwe. The ANC has taken a much-tougher stand on Zimbabwe than Mbeki.

Cosatu and SACP have said Mbeki's policies benefited business at the expense of millions of poor citizens.

The alliance rejected Eskom's proposed 53% tariff rise and said energy-intensive projects such as aluminium smelters should be reviewed.

South Africa has been hit by a power shortage this year, and outages shut down the mining industry for five days in January.

The alliance also said it wanted inflation targeting, which sets the desired band between 3% and 6%, to be revisited.

Cautions from Mboweni

The central bank has raised interest rates from 7% to 11.5% percent since June 2006, but inflation has stayed above the target band since April 2007, hitting 10.1% in March.

"If inflation is driven by external factors, how do you use a blunt tool of interest rates to control that?" asked Mantashe.

Central Bank Governor Tito Mboweni has repeatedly cautioned against changing the inflation targeting policy.

The alliance said price fixing should be criminalised and called for the removal of VAT on a wider range of food.

- Reuters