South Africa’s economy is sick – even Zuma agrees

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South Africa’s economy is sick – even Zuma agrees


The South African economy is in trouble. GDP shrank 1.3% in the second quarter of 2015. There has been a negative growth rate in the manufacturing sector, which is down by 6.3%. Mining, the bedrock of the economy, has declined by 6.8%. The rand has suffered a steady decline in value for the past few months, reaching 14 rand to the US dollar in August, the lowest since 2001.

The effect of all this on the voting majority poor, poses a great danger to the ruling party.

“The economy is sick,” President Jacob Zuma confessed on 30 August when he launched the first unit of a power station in the Limpopo province. The government has had great expectations for the Medupi coal project as a panacea to a country that has witnessed with shock, rolling power blackouts in recent times, which have had a very serious effect on the growth of the economy. Planned load shedding to ease the burden on the national grid has become a way of life. And the national power utility Eskom has become the butt of many jokes, leading to a drastic overhaul of its top executives.

Zuma called upon the business community and labour organisations to put the country first as the  domestic economy faces heightened headwinds. Both government and labour movements routinely blame white monopoly capital for the country’s economic woes and their effects on the disadvantaged majority.

Meanwhile, amid this already sensitive labour/economic situation, the mining and manufacturing sectors recently announced plans to cut thousands of jobs due to declining commodity prices and subdued demand from China.

While there are myriad reasons, including the bad global economic climate, to explain the malaise in the South African economy, what has become apparent is that apart from the corruption and inefficiencies in most state-run enterprises, private corporations are also not investing in business expansions. Many of them cite the “political climate” – a coded word for the lack of confidence in governance, which translates to the country’s rule under the ANC.

Will the ANC rule “until Jesus comes”?

The Stellenbosch University’s Bureau of Economic Research found that political reasons for the lack of investment in the economy stood at 70%, with no agreement from various bodies and institutions on how to fix the problem. Political incoherence has been the bane of  rumblings. Ideological political positions have often reflected economic viewpoints, leading to polarisation and paralyses.

No doubt economic apartheid still plagues the country. For 21 years now the ANC has fought a battle with the economy – with mixed results. But today, as the economy keeps floundering, voter patience is running even thinner and the ruling party’s electoral fortunes have been dipping since 2009, when President Jacob Zuma was elected. There is now a palpable and rising fear of an irreversible decline in the party’s popularity, calling into question Zuma’s oft- quoted declaration that the ANC will rule until Jesus comes.

The Reverend Frank Chikane, former President Thabo Mbeki’s Director General of the Presidency and prominent ANC National Executive Committee member has warned that the party has reached a point of no return, and is in real danger of losing the next elections in 2019.

In a document released to the press in early October, Chikane called for self-criticism and reflection, and warned that factors that work against party interests included “readiness to sacrifice the movement in defence of leaders or ill-gotten wealth, or ensuring that such leaders do not face justice”.  His concerns have not gone down well with the ANC’s top leadership.

The DA and Maimane factor

But perhaps the litmus test will be the 2016 municipal elections, and already the alarm bells are sounding, with the opposition smelling blood. The official opposition party, the Democratic Alliance (DA), fresh from the election of a black leader, Vusi Maimane, has seen a steady increase in their national electoral fortunes, growing from 12.37% of the voting in 2004 to 22.23 % in 2014. With respect to municipal elections , it has grown from 22.1% of the vote in 2000 to 23.94% in 2011. Now with Maimane, and research showing that there is a dramatic increase in support from black voters, who have previously shied away from white-controlled parties, the DA sees a tipping point. Black South Africans constitute about 80% of the country’s electorate.

As a measure of its confidence, the DA has been capturing traditional ANC strongholds in municipal by-elections, the most recent being an ANC voting district of Mbombela municipality in the province of Mpumalanga.

Attacking from another flank are the youthful Economic Freedom Fighters (EFF), whose very name and brand focuses on the issue of the economy. Its debut 6.23% of the votes in the 2014 elections was a clear signal to the ruling party that the political deck was going to be re-arranged, and that economics was going to take centre-stage. Research has also shown that the EFF has been steadily growing its support in the urban areas, not only among the black middle class, which is revolting against the ruling party, but in informal settlements where the poverty-ridden reside. Julius Malema has predicted that the EFF will win the 2019 election, and go on to nationalise the country’s mining sector and the land.

The ANC youth league, which was a major electoral force during Malema’s youth league presidency until his expulsion, has now become a shadow of its former self, with its new leader Collin Maine making little impact, while Malema as EFF leader continues to ruffle feathers and is highly popular with young members of the electorate.

But the ruling party’s troubles don’t end there and nothing could have come at a worse time than the shocking defeat the ANC suffered recently in a Port Elizabeth ward by-election, overwhelmingly losing to  a minor local party, the United Democratic Front. This indeed did not bode well for ANC prospects in any future elections – municipal or national. The Nelson Mandela Bay Metropolitan area in the Eastern Cape Province, is a hugely symbolic ANC support base. It has raised, made and is home to some of the ANC’s greatest head honchos. It is literally considered by many as the headquarters of the liberation struggle, most which took root right there through stalwarts such as Govan Mbeki, the father of ex-president Thabo Mbeki. The defeat was therefore very telling. Any  further losses of support in municipal elections will spell a loss of patronage and a grave danger to the party in the national elections in  billed for 2019.

The ANC realises that trouble is brewing and in fact, that it is in trouble. After the 2014 general election, the liberation party shed 10% of its electoral support from 64 to 54 per cent in Gauteng province, which provides the economic lifeblood of the country, accounting for 75% of GDP.

As we went to press, the powerful ANC governing body, the National General Council (NGC), was meeting to reportedly plot a way out of danger and retrospectively look at and find ways out of the ills plaguing the party.

Jeff Radebe, another ANC stalwart, who is the party’s head of policy, has acknowledged a decline in the party’s fortunes but believes the party can come out with a strategy and tactics to regain dominance. Radebe, President Zuma’s close confidante, believes that for the past 20 years, the party succeeded in consolidating political structures to support the democratic order and that the ANC has shifted its attention to economic transformation and that a key focus is to foster the growth of small businesses.

However, what the marginalised poor and unskilled have seen is increasing economic hardship while the rich have become richer. The ANC is in crucial need of arresting this cancer before it becomes a malignant tumour that may lead to the death of the once all-powerful and popular liberation party.

The Zuma factor

So where does the president feature in all this?

Battered by scandal after scandal and a huge stink over the expenditure of 246 million rand of taxpayers’ money on his private homestead at Nkandla, Zuma is in survival mode, while many question why he soldiers on.

There have been calls after calls for him to quit. The DA at the end of August threatened to impeach him on the fact that amongst other things, he violated the constitution by disobeying a court order to detain Sudanese President Al Bashir during the January AU conference in Johannesburg.

But with the ANC commanding  62% of the seats in Parliament, that was likely to be. But it is all part of the pressure being exerted an increasingly beleagured Zuma, who has had to be admitted to hospital on a few occasions for what are, officially, regular check-ups.

Wanton speculation

Already, political jostling is taking place in anticipation of the unknown, and the ANC’s 2017 elective conference, which will anoint the president of the country and presidential candidate for 2019. Names bandied around include Radebe himself, AU Chairperson and former wife of Zuma, Nkosazana Dlamini-Zuma, the Secretary General of the ANC Gwede Mantashe, and the current putative successor and Deputy President of the ANC, Cyril Ramaphosa. But all this could just be a silly season of wanton speculation and long invisible knives.

If the ANC is to survive the  seriously eroding electoral support and an assured winter of economic discontent, it will have to come up with some highly imaginative solutions to the economic malaise that continues to plague the majority black population. Otherwise there will be serious consequences, which could in the long-run bury the party that liberated South Africa. NA


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Written by Pusch Commey

Pusch Commey is a Barrister of the High Court of South Africa, Award winning writer and associate editor of New African Magazine since 1999. He is based in Johannesburg South Africa. He is the author of 9 books including the best selling 100 great African kings and queens, and Tofi's Fire Dance. He is also the CEO of the South African based Real African Publishers, and the founder of the Real African Writers  series.

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