MICHAEL AVERY: Do business leaders have the courage to seize the moment?

Pretty Yende’s ethereal rendition of Amazing Grace filling the recently reopened Notre Dame cathedral with triumphant hope while France’s government lay shattered and Donald Trump sat centre stage, sums up 2024 for me.

That history, culture and tradition still mean something. That hard work, excellence and meritocracy must crown our efforts to rebuild a world fractured by ideological polarisation. And that we as South Africans deserve to grace the global stage.

Sadly, I was reminded during a conversation with Moeletsi Mbeki of another jarring artefact of the year. SA’s education system remains dismal. Results in the 2023 Trends in International Mathematics & Science Study show grade 5 pupils (to add insult to injury, assessed primarily against grade 4 pupils from other countries) finished dead last among 58 nations in both maths and science. Meanwhile, grade 9 pupils, tested largely against grade 8 counterparts globally, fared only marginally better.

Mbeki reached out with a simple yet urgent message after reading my recent column on the hapless competition authorities. The government of national unity (GNU) will not grow SA. No government with the ANC in it will be able to solve the country’s growth and unemployment crisis no matter how much markets may feel warm and fuzzy that John and Helen are looking over the ANC’s shoulder.

As Hernando de Soto argued in The Mystery of Capital, “The poor [or assetless] stay poor not because they are lazy, but because they have no property rights to turn their assets into productive capital.” Mbeki offered his considered view on why SA’s political framework is failing to bridge this gap. And, more importantly, how we can create a system that allows for broader asset ownership, productivity and economic growth. 

Mbeki has long held that the ANC — once a movement of resistance and hope — has transmogrified into a political vehicle tied to a patronage-driven project. It has abandoned any meaningful focus on human capital development or fostering entrepreneurship. Instead of addressing the structural imbalances in SA’s economy when it came to power in 1994, it opted for quick wins, co-opting a narrow elite through BEE and creating a black middle class reliant on government bureaucracy. 

Mbeki is unsparing in his critique of this black middle class, which he describes as an assetless group whose survival hinges on state patronage. Far from being a driver of growth or innovation, this group thrives on immediate consumption, contributing little to long-term economic sustainability. In his view, the ANC has failed to capitalise on SA’s demographic dividend — the vast potential of its young, growing population — choosing instead to perpetuate a system that enriches a small elite while neglecting the broader populace. 

This, Mbeki argues, is why SA is stuck in economic stagnation. The ANC cannot reform without dismantling the very structures that sustain it. “It would be like turkeys voting for Christmas,” I quipped, and he agreed, pointing to the bloated civil service filled with ANC voters. Any attempt to right-size the bureaucracy would threaten the party’s political survival. And let’s not even mention the lip service paid to ending corruption given President Cyril Ramaphosa’s slap to Thembi Simelane’s wrist.

Mbeki believes the GNU is a temporary stabiliser at best. It buys SA time, but cannot fundamentally alter the economic and political dynamics. His observations echo the Austrian economist Friedrich Hayek’s warning: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” BEE, much like SA’s broader economic framework, is a top-down construct that has failed to consider the complexities of human behaviour and market dynamics.

So, what’s the way forward? Mbeki sees hope in a political coalition led by business. But surely the masses wouldn’t vote for the greedy capitalists? Mbeki points out that business is a group South Africans trust more than politicians, according to the Edelman Trust Barometer. This coalition would need to appeal directly to the unemployed masses, who now constitute almost 50% of the voting populace. For 30 years social grants have placated this group, but as the fiscal reality tightens the unsustainability of this approach is becoming glaringly obvious.

That’s why Mbeki believes a message of deferred gratification, investing in education, infrastructure and long-term growth for their children’s future, would resonate. But time is of the essence. SA faces a stark choice — continue on the path of stagnation, which eventually leads into the arms of the populist demagogues of the MK and EFF, or embrace a radical reset. This reset would mean dismantling patronage networks, scrapping BEE to genuinely empower the majority, and prioritising human capital development over short-term consumption. 

Mbeki’s thesis is sobering. It forces us to confront the reality that SA’s challenges are not merely the result of global economic trends or the lingering effects of apartheid. They are the product of deliberate political and economic choices that have perpetuated inequality, stifled innovation and entrenched patronage. 

Our two-hour chat ended with a poignant observation. SA has the potential to be a powerhouse, but only if we can break free from the ideological and political shackles holding us back. For now, the question business leaders need to mull over during the festive break is: do I have the courage to seize this moment, or do I continue to bury my head in the quicksand of the GNU?

• Avery, a financial journalist and broadcaster, produces BDTV’s Business Watch. Contact him at Badger@businesslive.co.za.