Why the ANC has failed to transform South Africa

In its 100 years of existence, the ANC has been plagued by bad luck, some of it the result of its own doings but most of it not. When the South African National Convention was convened by the British in 1908, founders of what became the ANC were left out of the great indaba. It was the ANC’s first bad omen.

If we fast-forward 85 years from 1909 when the first South African Constitution was written to 1994 when the ANC eventually became the government of South Africa, far from this signifying good luck for the ANC, the party in fact inherited a poisoned chalice. Yet the ANC’s leaders thought they had reached Jerusalem at last and started to feast.

By the end of the 20th century South Africa had become a hugely damaged society. Its mining industry was founded on the destruction of peasant agriculture and the conversion of the male peasant farmer into a migrant worker. This devastated the African family in South Africa. Also, for several centuries parts of South Africa depended on slavery.  The consequences of slavery are still with us today, particularly among the coloured population.

The destruction of peasant agriculture has left South Africa with a permanent unemployable underclass among black Africans, which accounts for the fact that 64% of them live in poverty. It also explains the huge disparity between the high levels of unemployment in South Africa and those of the rest of sub-Saharan Africa, where peasant agriculture remains strong.

A most striking aspect of South Africa’s social devastation is the rate of youth unemployment. In sub-Saharan Africa it is 11.9% and in North Africa it is 23.7%, whereas in South Africa it is a whopping 48.1% of all young people between the ages of 15 and 24, according to a study by the South African Institute of Race Relations.

The ANC’s misfortune
The heyday of the modern state was between the start of World War I in 1914 and the end of the Cold War in 1991. The state that the ANC inherited was a pale shadow of what the South African state had been. It was the ANC’s second misfortune.

The decision not to invite the would-be founders of the ANC to the 1908-1909 convention cannot be blamed on them and neither can the delay in the drawn-out negotiations that ultimately led to the 1994 elections. The ANC, however, is not altogether innocent in the creating of its own bad luck.

Nelson Mandela was right when he told the ANC to start the armed struggle soon after the end of the Defiance Campaign in 1952. If the ANC leadership had followed his advice, it would have got into government much earlier because its adversary, the National Party, was much less prepared then to withstand that form of resistance.

As a result of the party not heeding Mandela’s advice, by the time the NP agreed to talks the ANC was negotiating from a position of weakness. It goes a long way towards explaining the underperformance of the ANC government in transforming South Africa during its 18 years in power.

The negotiated settlement of 1993, which led to the 1994 election, should have happened during the 1909 convention when both Afrikaner and African nationalists should have been brought together by the British to rule South Africa in partnership. The British, however, concluded that the best way to protect their mining interests in South Africa was by promoting a policy of divide and rule, for which the Afrikaner nationalists fell.

Political elite
By the time these two nationalist groups had reached a power-sharing settlement, South African society had been transformed so that those with political power had little economic influence and those with economic muscle had minimal political power. This is at the root of the ANC government’s inability to transform South Africa into a more dynamic and equitable society.

The 1994 settlement created a political elite that controlled the state but did not control the economy. The previous elite, which had controlled both the state and the economy, lost political power but retained control of the economy. It is an unstable mix because those who control the economy live in fear of having their assets seized or overtaxed by the elite that controls political power. This is actually happening in South Africa through such processes as black economic empowerment that compels owners of companies to give a percentage of their assets to members of the black political elite.

The main gain by the black political elite in 1994 was access to government revenues, which they distribute among themselves through high salaries and, of course, corruption.  The black poor also participate in this wealth redistribution through social grants and other free government services.

Yet political power does not give the new political elite control over the country’s productive assets and savings. Notwithstanding its inability to control productive assets, the ANC so far has been lucky. Its luck came from the rapid industrialisation of Asia and especially China. The ANC government has been able to achieve a relatively painless wealth redistribution, funded by the massive increase in the price of South Africa’s minerals and sales to the Far East.

It is increasingly difficult to think that this windfall will last much longer, or as long as originally imagined. The Chinese economy is slowing down much faster than gross domestic product (GDP) figures indicate, resulting in a slowing demand for South Africa’s minerals.

Patrick Chovanec, professor of business at Beijing’s Tsinghua University, was recently quoted by the Financial Times as saying: “China has been riding an investment boom over the last three years that everyone recognised as unsustainable, and we are now seeing what unsustainable looks like. The unravelling of this investment is happening with nothing to replace it, and that means China is in store for much lower GDP growth than we have become used to.”

End of transformation?
The signs are that even the limited changes achieved by South Africa since 1994 have reached a dead-end. During the past 18 years there was a sense that South Africa was making great progress in improving its society, but closer examination shows that much of this progress was based on growing employment by the government, rising wages in the civil service, massive growth in credit and the replacement of Afrikaners in the state by the emerging black middle class.

The weakness of this model was that it was not only based on windfall profits from mining, but was accompanied by shrinking employment in the productive sectors of the economy. It is a clear illustration that the much-vaunted emerging black middle class is more of an administrative class; it is not an entrepreneurial class with the ability to start new enterprises and create jobs.

The ANC’s luck is once again running out. The numerous service delivery protests we have seen over the past few years testify that the poor no longer see wealth redistribution through government largesse as a solution to their poverty.

Moeletsi Mbeki is the deputy chair of the South African Institute of International Affairs, an independent think-tank, and the author of Architects of Poverty: Why African Capitalism Needs Changing. This is an edited version of his address at the Wits Institute of Social and Economic Research (Wiser) on May 24. It will be followed by an all-day colloquium on the ANC’s latest policy discussion documents ahead of the party’s national policy conference in June. It takes place at Wiser on May 30 (sixth floor, Richard Ward building, University of the Witwatersrand) and speakers include Professor Belinda Bozzoli, Professor Achille Mbembe and M&G editor Nic Dawes. For more information, go to wiser.wits.ac.za or phone 011 717 4220


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