It was the best of times, it was the worst of times, it was the age of political inclusion, it was the age of income inequality, it was the epoch of human dignity, it was the epoch of neglect and corruption, it was the season of electricity access, it was the season of load-shedding, it was the spring of open trade and commerce, it was the winter of premature deindustrialisation, we had everything before us as the doors of learning opened, we had nothing before us as poor educational outcomes shut young people out of the workplace, we were all going direct to the Rainbow Nation, we were all going direct the other way.
The great English writer and social critic Charles Dickens would have certainly found sufficient material in South Africa over the past quarter century to compose a novel as gripping and socially insightful as his 1859 classic, A Tale of Two Cities. The run-up to, and the aftermath of, the country’s first free elections on April 27, 1994, delivered more than its fair share of drama, heroes and villains. The period since has likewise been anything but dull, showing both the best and the worst sides of South Africa and South Africans.
For those who experienced the wax, peak and wane of apartheid in all its grand and petty vileness, the transformation has been at once remarkable and underwhelming. The shameful policies of enforced separate and unequal schools, transport, benches, beaches and even toilets were all rapidly undone, along with some of the system’s most outrageous and notorious legislation, such as the Prohibition of Mixed Marriages Act and the Immorality Act. Notwithstanding South Africa’s impressive rights-based Constitution, the damaging effects of apartheid’s most egregious abuses have not been fully overhauled over the past 25 years. The negative effects of apartheid’s dehumanising migrant-labour system, its degrading policies of Bantu education, land dispossession and forced removals, as well as the system’s ‘self-governing homelands’ sham, linger.
Former President Thabo Mbeki highlighted the country’s ongoing contradictions in 1998 when still Deputy President in President Nelson Mandela’s administration. Opening a debate on reconciliation and nation building in the National Assembly, Mbeki famously described South Africa as a country of “two nations”: one white and relatively prosperous; and the second, larger nation, black and poor. Mbeki’s frank assessment, along with problems such as surging crime, dimmed the halo effect of the so-called ‘democratic miracle’, a term that wrongly portrayed South Africa’s transition as a supernatural event rather than the outcome of assiduous negotiation and courageous leadership.
The upswing in the commodities cycle during the first years of the twenty-first century saw South Africa experience relatively rapid economic growth. During the period, millions of black South Africans, aided by the policies of affirmative action and black economic empowerment, began transitioning into the middle class. The era came to an end with the global economic crisis of 2008/9, compounded by the beginning of a period of poor governance and policy drift.
A report published by the World Bank in 2018, re-emphasised the racialised character of poverty in South Africa more than 20 years into the democratic dispensation. Titled ‘Overcoming Poverty and Inequality in South Africa’, the document states: “Race remains a strong predictor of poverty in South Africa, with black Africans being at the highest risk of being poor. Large families, children and people in rural areas are especially vulnerable to being in poverty for a long time.” The assessment also notes that, while close to 2.3-million South Africans escaped poverty between 2006 and 2015, nearly half of the country’s citizens remain chronically poor, as measured by the upper-bound national poverty line of R992 a person a month. What’s more, the trajectory of poverty reduction was reversed between 2011 and 2015, threatening to erode some of the gains made since 1994.
The message, 25 years into democracy, is that South Africa is again at a crossroads. The country’s extraordinary progression from pariah under apartheid to beacon of hope under Mandela has stalled. There is overwhelming evidence of a serious backsliding, particularly during President Jacob Zuma’s second term, when corruption and so-called ‘State capture’ undercut growth, eroded the standing and performance of key State-owned companies and threatened many of the institutional pillars holding up the Republic. As former activist and Constitutional Court judge Albie Sachs wrote in his 2016 book, We, the People, South Africans should “take considerable pride” in the country’s political and social accomplishments. “But none of them justifies Marikana; the inordinate expansion of wealth for those already extremely rich, while the majority remain poor; the failures to accomplish meaningful land reform; the racism still rampant in our society; or the corrupt dealings in the State and inside political parties.”
Efforts are belatedly under way to understand, and hopefully address, the depth and breadth of South Africa’s governance and corruption problems and lay the basis for something of a fresh start. The shadow cast by State capture is long and wide, however, and moving the country beyond its gloomy reach will involve a difficult journey. Necessarily, it will comprise multiple commissions of inquiry, many investigations and, eventually, high-profile prosecutions. This journey is being made all the more perilous, though, by the current breakdown in social cohesion, the rise of populism, as well as the increasingly hostile and uncompromising atmosphere pervading not only the virtual realms of social media and township streets during service delivery protests but also hallowed institutions such as university campuses and the chambers of Parliament. During the peak of the democratic transition, South Africans became world renowned for their ability to set aside differences, debate the difficult issues and negotiate compromises. Today, every dispute tends towards intractability and platforms for social dialogue, such as the National Economic Development and Labour Council, are either too weak to be effective or are used as instruments of delay and disruption.
Part of the problem lies in the fact that, as the South African political environment has become more fractious, government’s social partners have fractured. This unravelling is epitomised by the split of the Congress of South African Trade Unions (Cosatu), which is now battling for organised-labour hegemony with the likes of the South African Federation of Trade Unions and, in the resources sector, with the Association of Mineworkers and Construction Union. Business, too, has been unable to remain whole. Having struggled for nearly ten years after the advent of democracy to form a representative and unified organisation in the form of Business Unity South Africa (Busa), tensions over the pace and scale of transformation have boiled over. By 2011, the Black Business Council (BBC) had been re-established, following a falling out with Busa. Enduring antagonism between the two bodies spilled into the public domain recently, when Busa president Sipho Pityana, admittedly writing in his personal capacity, wrote a scathing open letter to his BBC counterpart, Sandile Zungu. In the letter, Pityana urged Zungu to come clean regarding his and the BBC’s complicity in the State-capture project by presenting themselves before the commission of inquiry chaired by Deputy Chief Justice Raymond Zondo. The two business leaders have since made efforts at reconciliation and the BBC and Busa have indicated that an effort will be made towards a unified voice of business and to address rampant corruption by building ethical leadership.
Nevertheless, this lack of cohesion among labour and business is difficult enough without the additional burden of increasing political competition and factionalism within the governing African National Congress (ANC) itself. While the party remains on track to maintain its Parliamentary majority and form a government after the May 8 election, the size of its majority, as well as its performance in the country’s most populous and prosperous province, Gauteng, will be closely monitored. Similarly, much attention will be given to the roles politicians directly implicated in State capture, and those perceived to have been close Zuma allies, will play in the new administration.
In this context, President Cyril Ramaphosa will need every ounce of his acclaimed negotiating prowess to align government’s social partners, and the ANC factions, behind a credible programme for reigniting growth, without which it will be impossible to tackle the country’s triple scourges of unemployment, poverty and inequality.
Scaffolding for such a project is being erected. Inquiries and investigations have been instituted to address past abuses, new boards have been appointed at State-owned companies and processes have been launched to forge a new consensus around the country’s future economic trajectory. It’s painstaking work and the results are not yet visible, nor guaranteed.
Developments at South Africa’s troubled State-owned electricity producer, Eskom, typify the progress being made and the resistance being encountered. Since taking over as President in February 2018, Ramaphosa has given priority attention to Eskom and its troubles. A new board was appointed even before his inauguration in a bid to address governance breakdowns, corruption and malfeasance, as well as to oversee the utility’s transition to future sustainability. The time and effort being given to Eskom are commensurate with the risk the utility poses to the economy and any economic recovery. The course correction has been both welcomed and heavily contested. The unbundling of the utility into three independent generation, transmission and distribution companies has been made a condition of the R23-billion-a-year bail-out, which could endure for as many as ten years. The vertical separation of the utility is expected to improve accountability and transparency, while the establishment of an independent grid company is critical for navigating the inevitable transition from a centralised coal-based system to one that is more decentralised and where the workhorses are wind and solar plants, backed by flexible generators. Nevertheless, the restructuring is being resisted by several powerful trade unions, with the help of individuals heavily implicated in diverting Eskom resources and contracts the way of a politically connected elite. The battle over the future of Eskom has taken the Tripartite Alliance of the ANC, Cosatu and the South African Communist Party to the very brink. The ideological skirmishes over the future of the electricity supply industry, meanwhile, pose a threat to sensible energy planning and continued investment by foreign and domestic independent power producers.
Less heavily contested have been the strides made by the Ramaphosa administration, through interventions such as its Economic Stimulus and Recovery Plan, to restore policy certainty in critical sectors, where ambiguity during the Zuma years made investment all but impossible. Reform efforts in the bedrock sector of mining have already received recognition by way of South Africa’s improved ranking in the 2018 edition of the Fraser Institute survey of mining companies. Similar progress is being promised in the areas of energy, communications and tourism, with the aim of reigniting investment in line with Ramaphosa’s target of attracting $100-billion of new investment in five years from 2018.
Those businesspeople who attended the inaugural South Africa Investment Conference in October responded with a level of enthusiasm not in evidence for many a year. Various developments since then – not least the return of rotational power cuts, or load-shedding – have dampened spirits. The level of dissatisfaction was reflected in the sharp decline in business confidence in the first quarter, which plunged to levels last seen during the 2009 recession. Importantly, though, a formal outlet, known as the Public–Private Growth Initiative (PPGI), has been established in an effort to translate any remaining goodwill into investment. The structure has already outlined several factors that could stimulate higher levels of investment in sectors ranging from tourism and manufacturing to mining, automotive and agriculture. The PPGI has also outlined, in direct engagements with Ramaphosa, those enablers that could elevate South Africa’s growth to 5% or better, from a dismal 0.8% expansion in 2018.
Ensuring that the best of times lie ahead and the worst of times remain confined to history will require immediate post-election progress on several lingering confidence-sapping inhibitors. Besides the electricity supply constraint, which weighs heavily on the outlook, resolving the vexed issue of land expropriation without compensation is an urgent priority. Should a progressive, yet market-friendly, solution be found, it will be an important signal that South Africa is committed to being a beacon to the world, rather than one more no-go zone.
Yet another opportunity for redemption lies before us. Will we grasp it?