Despondency is growing among businessmen, investors and members of the professional class in SA.
In the past three months the future has become less certain. The economic turnaround, if it can be pulled off at all, will be more difficult than imagined.
At the same time, the ANC and President Cyril Ramaphosa are being driven ever further down a developmental cul de sac, as they fear losing power and are making it up as they go along, pushed in the direction of short-sighted populism because of earlier failures.
Ramaphosa’s announcement on land expropriation without compensation last Tuesday was an important example.
In and of itself it will have profound implications for whether SA is considered a good place to invest.
But just as importantly there is reason to believe it will not be the ANC’s last capitulation to populism.
It is also a critical indicator of another disturbing trend: the declining influence of business and the investor community in shaping government policy.
How we got here
First, a quick recap on how we got here.
It is common cause that land reform was not very high on the ANC’s agenda and that it was disastrously executed. As a result and because land is a proxy for the intergenerational poverty in which all but a few black people are stuck, it was the perfect issue for the Jacob Zuma faction in the ANC and the EFF to whip up a political campaign.
Although the Ramaphosa grouping had anticipated a fight over the expropriation of land at the ANC’s elective conference in December 2017, it wasn’t quite prepared when, late on the last night, the Zuma grouping threatened to collapse the conference.
When the expropriation without compensation resolution was passed, the die was cast: Ramaphosa was bound from that point on to implement it.
Business, however, never expected him to implement it. At his state of the nation speech in which it featured again, a well-known mining and finance mogul leant over to my colleague and said confidently: “It’s never going to happen.”
But things are not like they used to be. For many years the governing party (and its trade union ally) could bluster left and then with a nod and wink to investors, walk right, with the explanation, “Don’t mind the noise; we are a robust democracy”.
The parliamentary debate called by the EFF came next. EFF commander-in-chief Julius Malema spoke first and owned the day.
The ANC’s Gugile Nkwinti, the minister of rural development and land reform dumbly followed. It was only after this that Ramaphosa began to pay attention to the modalities, realising belatedly that, in fact, the problem was not the constitution at all, but the failure of the government as well as the courts to willingly award zero compensation.
A brief period followed in which Ramaphosa and those close to him propounded the view that the constitution need not be changed at all and that it was the expropriation bill where the major changes should take place.
But again, the ANC lost the initiative, this time completely.
The public hearings across the country stirred up deep feelings among the poor, the marginalised and black people in general who are locked into the poverty trap.
It provided a rare opportunity for them to express their loss, deprivation and anger, one possibly even more relevant than the Truth and Reconciliation Commission decades earlier.
The EFF was at hand to channel their anger.
The ANC was mostly absent. And so again, it was left with no choice: go with the flow or lay itself open to a charge of complicity in failing the people. Whether the only option open to the ANC was to announce that it would amend the constitution can be debated.
The important thing, though, is that last Tuesday Ramaphosa believed it was.
Ruinous
Had the ANC not spent so much of the last 20 years cloaking its vision and policies in the misleading language of national liberation, there might have been another road before the cul de sac.
It might have been able to make the case for the importance of a free market economy and to tell voters what many of them suspect – that the EFF and its policies will be ruinous for the national economy.
Other developmental cul de sacs loom.
This is not a government that will confront overpaid and excess numbers of workers in failing state-owned companies; or confront teachers without the ability or knowledge to teach and move them aside; or one that will punish municipalities that don’t pay their accounts for bulk electricity or water but spend municipal resources on salaries and cars for officials.
It is a government, though, that come 2019 will stay in power.
• Paton is writer-at-large.
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