South Africa's ANC, leftist allies agree to end rift

By Phumza Macanda

JOHANNESBURG (Reuters) - South Africa's ruling ANC and its left-wing 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 his 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 COSATU, the largest labour federation, and the small but influential South African Communist Party (SACP).

"It was agreed that the alliance will work together to formulate policy," the three groups said in a statement at the close of a weekend conference. 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.

They would also join forces to prepare for elections in 2009. South Africa's constitution prohibits Mbeki from running for a third term as the country's president.

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

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

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