Zuma Says Crisis May Force Less South Africa Spending

By Ken Fireman and Stewart Bailey

Oct. 24 (Bloomberg) -- Jacob Zuma, who is slated to become South Africa's president next year, said the international financial crisis may force slower government spending in Africa's biggest economy.

Zuma, the leader of the ruling African National Congress, said in an interview in New York today that he plans no abrupt shift from ``financial discipline'' toward aggressive anti- poverty programs.

``It's already accepted that economic growth will be lower than expected'' because of the global crisis, Zuma said. ``It's a challenge that faces everyone. I'm sure that the private sector, the workers and everyone will understand there are economic problems.''

Given those difficulties, he said, the government will ``look at programs and priorities, realizing that there are constraints.''

Zuma, 66, also said if Barack Obama were to be elected to the U.S. presidency, it would show that ``America is ready for any of its citizens to lead it'' and would also give him hope that African issues ``are not going to be put on the back burner.''

Because of Obama's connection to the continent through his Kenyan father, Zuma said, Africans would have a perception that the Democratic nominee might ``not put Africa too much down in the agenda. That would be a natural kind of expectation. You should not blame us for it.''

In Line

In December, Zuma became president of the ANC, which has ruled since the end of the apartheid era in 1994. That puts him in line to become the country's president after parliamentary elections are held next year.

His rise to power was backed by the labor unions, communists and the ANC's youth wing, all of whom favor increased government spending, income grants for the poor and interest-rate policies that promote job creation.

In the interview, Zuma sought to allay concerns among investors that those forces and their policy goals would dominate his presidency. The FTSE/JSE Africa All Share Index, the country's key stock index, fell to the lowest in almost three years today.

``They participate in the evolution of policy, but they do not determine which way policy must go,'' Zuma said of the communists and the unions. ANC conferences set policy, and ``that should be a comforting thing to investors. Even if it was not Zuma, it was anybody else, you should not worry about the ANC, and I think we have a track record.''

`Destination for Investment'

Zuma said the world should continue to regard his country as a ``destination for investment'' because of its democratic political system, transparent economic policies and proven record of fiscal discipline.

``If I was an investor, I would say, `Here is a maturing democracy which would make my benefits or profits not to be threatened,''' he said.

In a separate interview with Bloomberg Television that will be broadcast on the ``Money & Politics'' show at 9:45 p.m. tonight, Zuma said the financial crisis was a ``global problem.''

``Nobody can have a magic solution in one country,'' he said. ``It's a question of how the financial institutions and leaders of financial institutions in the world are able to work out some solutions. The question is, how do we all put our heads together, to keep our heads afloat.''