Although the results are not yet finalised, it appears as though President Cyril Ramaphosa’s ANC has done enough to pass the 50% mark and will govern for the next five years. The president clearly has broad-based support among business and concerned South Africans who believe he possesses some Mandela-like qualities.
However, this perpetuates the view that in SA, because of our racist past, black Africans possess better qualities to govern. That is, the notion that because we live in a country with a black majority we can be better governed by one of our own through a black-led party such as the ANC or EFF, has become a norm.
Even 25 years of poor economic performance and declining per capita incomes credit rating downgrades by at least two credit rating agencies, because of a ballooning debt to GDP ratio now at 56%, a rising budget deficit and stubborn unemployment of more than 27%, does not seem to change voter behaviour. It may seem that South Africans are tolerant of poor governance, economic mismanagement and incompetence and cannot imagine a better SA as articulated in our constitution.
Business, in London and Sandton, and the majority of South Africans, live in hope (despite the evidence in the rest of Africa that liberation movements never outperform their colonisers) and have voted for the ANC. But what should we expect from Ramaphosa’s ANC on the economic front? Business showed its hand in the public-private growth initiative (PPGI) by partnering with the government. The PPGI has developed a short paper on how SA can achieve 5% GDP growth.
CEOs and chairs from 19 sectors of the economy presented growth plans to the government to boost SA’s GDP over the next five years, in partnership with the government. The percentage growth projected in the different sectors varies between 3% and 5%, subject to circumstances relevant to the specific sector, but the summary projection of achieving 5% contribution to the GDP is also based on the expected multiplier impact on associated businesses that cannot be accurately quantified.
However, this is at odds with the ANC election manifesto, which seeks to establish a township and village economy fund to support the productive activities and the development of industrial parks, business centres and incubation centres, reminiscent of the apartheid-era industrial decentralisation strategy. The ANC also wants to help formalise township and village-based enterprises through an active campaign by provincial and local governments that promotes the benefits of formalisation.
The ANC’s plans appear to reinforce the economics of isolation that underpinned the apartheid government strategy of self-governing in the form of homelands and the various administration boards that sparked revolt that started in Sharpeville. The township economy and the revitalisation of decentralised zones is a strategy to keep blacks where they live, completing the incomplete apartheid project of industrial decentralisation funded by the Industrial Development Corporation.
The ahistorical nature of the ANC’s manifesto does not recognise that the industrialisation strategy was an externalisation effort by Taiwan with the apartheid regime as a partner, heavily subsidised by the taxpayer. Johannesburg mayor Herman Mashaba’s strategy of densification and rebuilding the CBD by bringing South Africans closer to places of work and protecting the vulnerable by increasing students’ access to affordable accommodation looks attractive, and Ramaphosa may need to engage him.
Ramaphosa should work hard on a new political settlement for industrialisation in a low carbon economy, which should speak to and mobilise key black constituencies, including industrial trade unions, through effective skills upgrading and investment and productive black entrepreneurs through opening up economic opportunity. It must reach and sustain a shared and binding commitment which, through shared growth and investment, can lead to a reversal of the growing inequality in wealth.
The settlement needs agreement around the expectations for large companies as contained in the PPGI, rewarding long-term domestic fixed investment, innovation and dynamic competitive rivalry, with effective government policies regarding infrastructure, procurement, skills development, technology and opening regional and international markets. Finally, the political settlement must be captured in the augmented National Development Plan to achieve a better life for all.
• Mondi is a senior lecturer at the Wits School of Economic and Business Sciences.
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