There is nothing, not a single word, of any merit or interest in the ANC manifesto for the upcoming local government elections on November 1.
I read it. I’ll never get that time back. I was looking for signs of new thinking on the economy, but all I found was this: “Working with all levels of government to grow the economy, increase jobs, and reduce poverty, especially for young women and men, we will … accelerate implementation of the Economic Reconstruction & Recovery Plan, which was launched in October 2020 to rebuild our economy due to the Covid-19 pandemic.”
So I strolled back to the ANC’s 2016 local government election manifesto. It didn’t do well then, which helped tip former president Jacob Zuma out of power. There wasn’t a word, however, about economic growth in the document. It’s on the ANC website under “Manifesto’s” (sic).
Back then to 2011, which was tragicomic: “Over the years,” the manifesto said, “we achieved sustained economic growth, but unemployment and inequality remain high. We need to ensure that our economy creates more jobs, decent work and reduces income inequalities. Government has unveiled and is implementing its New Growth Path programme whose primary objective is to create at least 5-million jobs in the next 10 years.”
That was then economic development minister, now trade, industry & competition minister Ebrahim Patel’s first big shot at policy-making. It was a disaster, but you can see traces in it of his current effort — localisation — which is supposed to reindustrialise the country. In 2011, unemployment in SA was at 24.6%.
Bending over to be fair, I went back to 2006. “Building on our achievements and drawing on the lessons derived from our collective experience, we can move faster and further to reach the goal of a better life for all,” the manifesto said, neatly reflecting then-president Thabo Mbeki’s (misplaced) confidence. “We are determined to halve unemployment and poverty by 2014.”
Patel’s localisation policies favour companies that are signed up to central wage bargaining councils
Mbeki wasn’t in office long enough to deal with the global financial crisis of 2008. But unemployment in 2006 was 28.49% and fell smartly to 22.43% by 2008, the year he was removed. Then came the crisis, and by that 2014 target, unemployment was 24.89%. Hardly a halving, or even close.
As everyone knows, second-quarter unemployment in 2021 was a record 34.4%. Covid-19 is partly to blame, but the ANC is mostly to blame. The reason is in this short sentence in the concluding lines of the current manifesto: “We must urgently finalise the social compact between the social partners to achieve our country’s fundamental social transformation to reduce and eradicate the plague of unemployment, poverty and inequality.”
The fact that the ANC automatically regards the three very different problems of unemployment, poverty and inequality as one and the same thing (“the plague”) means it is automatically doomed to make poor policy choices in tackling them (or it). And it does, over and over again. Poor policy is killing the ANC.
Poorly positioned
Financial Mail economics editor Claire Bisseker reported recently that SA’s tax base has added only 500,000 people in the last 10 years, while the number of welfare beneficiaries has risen by 2-million and the unemployed by 3-million.
It means an at-best stagnant tax base is supporting a rapidly growing number of people in need. And only 5% of the 7.7-million taxpayers above the tax threshold earn more than R1m a year. A million rand isn’t what it used to be either. The end of Covid-19 will trigger a recovery of sorts, but the state is poorly positioned to take advantage of any opening.
It has no skills, for a start, and the private sector is on a very short leash. The ANC insists on standing in the centre of the economy when what it should do is get out of the way.
That’s not going to happen. For all President Cyril Ramaphosa’s promises of “compacting”, the compacts are being made with big business, which inclines to job cuts or mechanisation, and not with small or medium-sized companies, where the bulk of jobs are. Patel’s localisation policies favour companies that are signed up to central wage bargaining councils.
Deeply vulnerable
A neat circle on paper, perhaps, but the world is complicated. The oil price is rising and the international price of steel, now kept artificially high in SA by import tariffs, is falling as Chinese demand has slowed in the face of the potential $300bn collapse of property developer Evergrande.
The key here is the SA Reserve Bank, which has gone out of its way to hold interest rates low. But with the US Federal Reserve signalling a possible interest rate increase in 2022, currencies such as the rand are deeply vulnerable to a flight to the dollar. That would stoke inflation and an inevitable interest rate increase in SA.
The only way out of our misery is to become an open economy that sets itself only one target — to export more this year than we did last year. The jobs will come. Instead we have adopted the foetal position under the coffee table, hiding from the world and its products in the mad conviction that we can make them all ourselves and change the course of our future.
It is all hubris, just like those old “manifesto’s”.
• Bruce is a former editor of Business Day and the Financial Mail.
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