Recent events in the post-Mandela South Africa do not bode well; a fractured labour union, interminable service delivery protests, attacks on colonial statues, corruption, crime, parliamentary violence, xenophobic violence, and tensions between the institutions of state. The deepest fault line remains income inequality, and with it a vast disparity in the economic distribution of the liberation dividend.
Race, ethnicity, class, education, skills disparities, access to land and capital, entrepreneurship deficits, immigration problems, poverty, unemployment, and the lack of access to capital play a major role. It is a deadly cocktail.
The fear now is the collapse of all the capital gains; political, social and economic, and most importantly of African and international goodwill. Ironically, while in the bad old days of apartheid, international hostility was directed against White South Africa, now the tables seems to be turning with recent Afrophobic attacks, orchestrated by some misguided elements thought to be at the bottom of the food chain.
However Trevor Ncube, a prominent Zimbabwe-born businessman and owner of the respectable Mail and Guardian newspaper and other media assets, opines in an article that Afrophobic sentiments run deep across the board and that the virus may well spread to non-African nationals and become tribal or ethnic, as was the case in 1994, when a violent transition to democracy became drawn along racial and ethnic lines.
The Sachs report
When Mandela was on his deathbed in 2013, the investment company, Goldman Sachs, gave an honest assessment of the South African landscape. Their report stated that “South Africa is one of the most unequal societies in the world. By 2008, 85% of Africans were still in the impoverished or lower income categories, receiving less than R1,400 per month ($120) compared to 87% of whites who occupied the middle and upper income categories”.
The report went on: “Unemployment too has barely moved from the 23% inherited in 1994 to a post-Apartheid average of 24.5%. With 70% of the unemployed under 34, the young are disproportionately affected. Job and export-creating mining and manufacturing almost halved their share of GDP to 23% since 1986, while banking and real estate doubled to 24%.
“At 6.5% of GDP, the current account deficit is the highest among growth market peers while foreign direct investment (FDI) has averaged only $1.9bn since 1994. The currency exchange rate acts as a ‘shock absorber’ [currently at about 12 rand to the dollar]. With public service union membership rising, labour militancy is now as much an issue for the government as it is for the private sector.”
The report went on to point out that “productivity in the private sector has not kept pace with wage inflation, while the public sector, despite increasing to 2 million employees, has seen its contribution to GDP fall from 19% in 1994 to 15%. Despite increased budgets, health and education outputs lag [behind] emerging market peers on quality and effectiveness of spending when measuring life expectancy and quality of schooling. This is not sustainable. Productivity needs to outpace wage inflation”.
Goldman Sachs offered a solution: “The government must reduce inequality, increase employment, especially amongst the youth and defend the gains made by the African middle class. It must improve public sector productivity, output and effectiveness.”
And then this: “With sub-Saharan Africa GDP growing at over 5.5%, South Africa now lives in a good neighbourhood. Finger-pointing in this still-divided society will not help. A ‘Team South Africa’ response by business, labour, government, and civil society will. South Africa has the people, the talent, the institutions, and the capital to do what needs to be done.”
A general dissatisfaction with the pace of economic growth and an inequitable distribution of resources has meant a rise of the political temperature, contestation and finger-pointing. Competing centres of power have of late been at loggerheads. The ANC has accused certain sections of the media in the Eastern Cape of plotting to overthrow the government. It sounds paranoid. The general media has, however, often been scathing in its attack on the government, rightly or wrongly, while the trade unions are in what seems like perpetual wars, not knowing whether to
take on the government or join them.
Elsewhere, Julius Malema’s Economic Freedom Fighters (EFF) have turned parliament into a battleground. The South African Communist Party (SACP), which is in bed with the ANC, has called for the political death of the EFF. Now everybody is at everybody’s throat. There is no unity of purpose, or sense of common identity, amongst South Africans of all races, colour, and creed.
However, the biggest threat to the rule of law has been a clash of the government and the judiciary. Over time the government has been on the wrong end of court actions, as increasingly, court orders have compelled government officials to act in a prescribed manner.
This came to a head when, during the AU summit, the Sudanese president, Omar al-Bashir, was whisked out of the country despite a court order to detain him, pending a decision to extradite him for prosecution at the International Criminal Court (ICC). The government, which had given him assurances that he would not be arrested if he attended the summit, later admitted that it broke the law, but was forced to do so.
The SACP’s Comrade Blade Nzimande, who also doubles as the minister of higher education, has accused the judiciary of double standards, claiming that judges were overreaching by making rulings that interfered with the functions of the other arms of state, namely the executive and the legislature.
His biggest gripe, however, was a court ruling that went against the ruling ANC and prevented the use of the police in ejecting unruly members of parliament, with specific reference to the use of force against EFF members who had made parliament dysfunctional on a number of occasions.
“The court should respect the principle of the separation of powers,” Nzimande said, “not a ruling that tells us that the EFF has a right to disrupt parliament.”
There was a strong response from Chief Justice Mogoeng Mogoeng, who many thought was going to be a lackey of the ANC when he was interviewed for the job. Flanked by senior judges, he challenged the politicians to come out with specifics of collusion in the judiciary and refrain from sweeping and unfounded statements. Mogoeng called for a meeting between the government and the judiciary.
This was welcomed by Deputy President Cyril Ramaphosa, who opined that the principle of the separation of powers needed to be discussed.
New African voices
On the issue of the political economy, there have been many voices on the causes as well as the way forward. Iraj Abedian, the founder of Pan African Capital Holdings, thinks South Africa’s economic crisis is largely of its own making, with key contributors being government-driven policy confusion and instability.
On his part, Floyd Shivambu, the right-hand man of Julius Malema, thinks the high levels of unemployment and poverty in the country can be solved by a state-controlled massive (and protected) industrial expansion.
Mark Heywood, a prominent activist, thinks there should be an investment in quality healthcare and basic education, which would create decent jobs, local spending power, a bigger domestic market, and a more skilled and productive workforce. The opposition Democratic Alliance’s spokesman on finance, David Maynard, believes in an increase in infrastructure development, labour market flexibility, cutting of red tape, and foreign investment.
In all this, the government has banked its hopes on a document, the National Development Plan, which many people have said is too neo-liberal in outlook for comfort.
Moeletsi Mbeki, the younger brother of former President Thabo Mbeki and a leading political commentator, thinks South Africa is a bomb waiting to explode. He says all the country needs is a little match to spark it, and it will go up in flames. In an interview with CNBC in June, Moeletsi Mbeki said “South Africa is a country with huge amounts of tension in terms of the underperformance of the economy”.
Irrespective of the differences of opinion, there is no doubt amongst all pundits that the South African problem is socio-economic, and that the country’s politics track the socio-economic malaise. They agree that social justice is the big elephant in the room.
Newer voices cite land reform and African-centred education as where it should all begin; the recovery of the land and its resources to empower Africans, and the appropriate education to create the human resource capacity to realise value.
In a recently published book, On African Culture and Politics, Prof Simphiwe Sesanti of the Centre of Advanced Studies of African Societies, insisted that the land issue was key. He said that the continued private ownership of African land (the major means of production) as a result of colonial land dispossession, was a violation of African culture.
Quoting the writer Buchi Emecheta to buttress his point, Prof. Sesanti said land was the soul and lifeblood of a community, and that it was disturbing that South Africans were wasting time defining who was African for the benefit of rich whites, while the real issue, the dispossession of Africans – “the cause of our poverty” – remained unresolved.
Sesanti further railed against unproductive conferences and useless resolutions, but rather insisted that we should learn from the wisdom of our ancestors who hold the African truth and heritage that, “it is culturally offensive when one child eats bread in front of another without offering to the one who is without”.
Moss Mashamaite, an admirer of Julius Malema, muses over the future in his book, The Moving Finger Writes. He postulates that education should be free.
He quotes the EFF national chairperson, Advocate Dali Mpofu, as saying: “How can a country that has 80% of the world’s platinum reserves, among others, be unable to afford free education for its children?”
The reason, Mpofu laments, is because Africans refuse to own their resources. He cites various less rich countries that offer free tertiary education: Kenya, Egypt, Mauritius, Morocco, Pakistan, Trinidad and Tobago, Venezuela, Barbados, Sri Lanka, Cuba, Estonia, Algeria, etc. He is of the belief that the problem is not whether South Africa can afford free education or not, it is about who opposes it and how strong they are in their argument.
Free education is opposed by powerful people, the media, the whites, and the small group of
black elite who have no use for it. Mpofu is adamant that white people in general oppose free education because it will suddenly wipe out their advantage over black people.
It may well be a conspiracy theory or a search for a bogeyman, but the saying, “your ignorance is their strength”, supports Mpofu’s stance. Mashamaite adds that the educated black is most unlikely to be found knocking on a white man’s door, looking for a job.
The multiplicity of voices means one can only be heard when one has a big platform and a megaphone, and so far that is also dictated by one’s economic or political advantage. As such, others have started scrambling for the exit.
The irony is that, over the last 15 years, South Africa has accounted for a decent chunk of new dollar millionaires in the world. Sadly, between 2000 and 2014, 8,000 individuals with net assets of more than $1m, excluding their primary residence, have left the country with their skills and capital.
According to the annual overview of the migration patterns of the rich, compiled by the New World Wealth in cooperation with LIO Global, destinations for the wealthy include Australia, Britain, Cyprus, Mauritius, the US, and Canada. The behemoth, Anglo American Corporation, the famous Elon Musk, and Mark Shuttleworth made some money and bolted for the exit some time ago.
Over the same period, only 500 wealthy people immigrated to South Africa, mainly from other countries in Africa.
About the hungry and desperate poor who have nowhere to go, the prognosis is not good. They might just end up eating the rest of the rich – unless something dramatic happens to alleviate their long-term suffering.