Yet despite remarkable changes in the new government’s economic policies and positive economic growth path, the South African economy still faces severe challenges that are mostly typical of an emerging economy.  Louw (2003: 6) highlights some of these challenges.  The level of job creation in South Africa demonstrates a disappointing ratio against its economic growth rates across the various industries and sectors. This can be further observed in the weakening mining industry as more people get retrenched due to dropping exports.

This failure to meet the needs of the majority of its population, the Zuma administration has received a lot of criticism both nationally and internationally for its inability to address the widening gap between rich and poor and moreover that of the distribution of resources has been the source of a great deal of the labour strikes that have been occurring all around the country since mid 2009.  In this highly unionised economy, South Africa’s private and public sectors alike are feeling the heat as workers down tools and bring production in these various industries to a complete halt.  However in the aftermath of the global economic down-turn the issue of economic inequality and unemployment is not unique to South Africa.  The recent waves of political revolts by the nations of the Arab world against their leaders are only a tip the iceberg.

 Most recently, prominent public figure Julius Malema, President of African National Congress’ Youth League (ANCYL) has with the support of the league made an official call for the nationalisation of 60 per cent of South Africa’s new mining companies in February of 2010. While the senior ANC faction has been cautioned against this, the issue of nationalising the mining sector was again brought up by the controversial leader.  In the early 2010, the ANCYL committee had compiled a detailed paper advocating the nationalisation of mines, requesting the government to amend the mineral act to ass a clause that would obligate new mining companies to enter a partnership with state before it can be issued with a mining licence in South Africa.  Since the development of this national debate, contentious arguments expressing the detriment of this is prospect on the economy let alone the effect it will have should it be successful have surfaced from various actors within the South African corporate landscape and more so from oversees investors and potential investors as well.  
Striking while the iron is hot, the ANCYL established the slogan of ‘economic freedom in our lifetime’ at the 24th Congress in January of this year.  The emergence of this widely supported sentiment by presents a continuation of the policy changes the time the league has proposed.  Although the reality of youth marginalisation and economic equality comes second to none in South Africa’s current political discourse, it appears the understanding of ‘economic freedom’ remains to be settled.

According to Nietshezhe (2011: 4) South Africa needs a comprehensive plan that details how it intends to attain the goals it has set out and the time framework for addressing the root causes of the problem including the issue of structural unemployment, quality education and the overall structure of the economy. The question that remains nonetheless is what would it mean for South Africa’s economy if Malema’s call for the nationalisation of mines were to succeed?  While experts have expressed nuanced perspectives on the matter, the outcome is all very much the same and presents a disconcerting picture of the future of this country.  Hlongwane (2011: Internet source) cites Azar Jammine, director and chief economist at Econometrix, who made a daunting projection stating that “the very first thing that would happen is that there would be a big outflow of capital out of the country, which would lead to a rapid depreciation of the rand” and although this may result in positive returns for manufactures in the short to medium term interest rates will rise and the inflation rate”. Perhaps the question to ask is whether the nationalisation of any sector in the South Africa’s economy will translate into the equal distribution of the gains made.

References:
1. Hlongwane, S. 2011. “Analysis: what would happen to SA if mines were nationalised”. The Daily Maverick, Internet source.
Htpp://www.thedailymaverick.co.za/article/2011-06-23-analysis-what-would-happen-if-mines-were-nationalised.htm
2. Kirsten, M.  2003 “Financing Africa’s Development: Enhancing the role of finance”. Development Report 2003.
3. Louw, L, 2006. Habits of highly effective countries: Lessons for South Africa”. 
4. Nietshezhe, J., 2011 “Economic freedom in our lifetime: we have a proper debate this time”. Mapungubwe Institute