South Africa Watch - one

It is crunch-time for South Africa on all important fronts

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South Africa has entered crunch time on most critical fronts. From political stability, and its economy, to social stability a sense of crisis has gripped the country.

While the flood of revelations from the so-called #GuptaLeaks is dominating the news scene, and is indeed a crucial factor in the state of affairs on many fronts, it also obscures the complexity, breadth and depth of the multifaceted crisis confronting the country.

We attempt to take a helicopter look at the various areas, and how they impact on one another.

The political scene

Amidst factional divisions within the governing African National Congress-led alliance, the prospects of the party to maintain a united political front has diminished considerably since the local government elections of 2016. A break-up of at least the alliance at this stage, and maybe the party itself before the 2019 general elections, look almost inevitable.

The factional strive has been coming for some time, and already played an important role at the time of the 2007 election of Mr Jacob as leader. Since, the strive has become an open battle, and in some regions – like Zuma’s home-province of KwaZulu/Natal – takes on war-like symptoms with an escalation of political murders.

In an article last week Phephelaphi Dube, Director of the Centre for Constitutional Rights eluded to the fact that, since March 2014, 89 people in the country have died in politically-motivated killings without a single person being convicted  – a trend eroding democracy in the country.

As argued before, State capture is also not new with its roots in the cadre deployment ANC’s policy. This made it possible for the Zuma-affiliated faction to capture most organs of state and state controlled enterprises SCEs, which, in turn, facilitated the hi-jacking of the process by entities like the Gupta business empire.

Against this background, one has to agree with political commentator, Shawn Hagedorn, who in an article for Biznews wrote the looming SA political coalition will be “no bed of roses.”

Whichever coalition takes government over from the ANC, will have to, besides ideological differences, have to deal for some time, and live with a politically ANC-aligned state administration.

On the positive side, that maybe just what the country needs to re-establish a tradition of a professional, politically neutral bureaucracy.

The economic front   

A just published report by international risk analysis company Verisk Maplecroft tells the story of the state of the South African economy, the crisis it is in, how it arrived at the crisis, and how tough it will be to overcome it.

It identifies political instability as the key risk to international investors. The election of Zuma’s successor in December will determine whether the ANC continues to move towards the left or adopt a pro-business stance.

Its Core Drivers report however, warn that the Southern Africa region is becoming less attractive as an investment destination, with the economic outlook for the next ten years looking bleak.

"Economic growth will remain sluggish, causing unemployment to rise and compounding problems associated with inequality. Meanwhile, pressure from unions to protect jobs will fuel strikes, reducing the productivity of key sectors," according to the report.

About South Africa specifically it states: "Zuma's administration has progressively reduced investors' confidence in the government's ability to manage the country's structural problems and investment's contribution to GDP will fall."

Reacting to the latest government ten-point economic development plan, the Inclusive Growth Action Plan, announced by Minister of Finance, Malusi Gigaba, a similar message came from international credit agency Fitch Ratings.

According to Fitch it is unlikely to significantly boost economic growth prospects because most “initiatives focus on state-owned enterprises governance, containing pressure on public finances, and boosting black economic empowerment and addressing inequality, which would only have an indirect impact on growth prospects."

What South Africa needs, is structural change rather than another set of political promises with an eye on the next election, dressed up as yet another “development plan.”

OECD Secretary-General Angel Gurría, eluding to the structural changes needed, said in a press release:

"Ensuring a better future for all South Africans will require increased access to higher education, a stronger and fairer labour market, deeper participation in regional markets and a regulatory framework that fosters entrepreneurship and allows small businesses to thrive.”

There are also some positive news, like Department of Trade and Industry (DTI) making some progress in collaboration with private enterprise institutions on the front of ‘inclusive’ and, small, medium and micro enterprises – earlier this week announcing the signing of a deal with First National Bank for the financing of black industrialists.

However, it is over shadowed by news of failing SCEs, draining funds from state coffers and a flood of reports about executives a being paid huge packages, including so-called bonusses, while the institutions they are supposed to manage are failing – Telkom’s CEO, Sipho Maseko, will take home R25.9 million this year, including paid out shares to the tune of R9.64 million.

In all fairness, however, counterpart in the private sector, MTN’s group executive chairman, Phuthuma Nhleko received a R72.2 million 2016 salary, despite the group posting a first-ever annual loss in its 22-year history, indicating a wider societal problem not unique to South Africa.

Here, however, this narrative feed into an environment where, a close to a third of the population is either formally unemployed (9.3 million) or have given up hope of finding employment and inequity levels set world records.

Social stability

It is, however at ground zero, in the streets, townships (formal and informal), and places of work where the fast majority of South African’s lived experience pay out where the real storm clouds are stacking up.

Levels of discontent, frustration, and anger of millions with their everyday lived reality are boiling over, in some instances taking on the feel of a low-key civil war, and at times some communities turned on one another in the battle for scraps of some living space.

Details and underlying factors differ from instance to instance, but a collection of some news headlines and extracts illustrate this reality:

  • “Close to a thousand protesting residents of Gomora informal settlement in Pretoria West have battled with police since the early hours of Thursday morning ….. Protesters returned fire with slingshots and threw stones at police Nyalas and members of the Public Order Policing on the ground….”  

          “We don’t know who to trust. We don’t know who is next.”

  • Armed attack on occupiers of Helen Bowden Nurses Home

And, this is just a very small sample of the ever simmering tension between communities and authorities and between community and community as government is failing to come grips with problems like rapid urbanisation, economic exclusion, slow economic growth.

Conclusion

Indeed, the realignment of the political forces and coming to grips with, and turning around scourge of state capture will be the just a first step the in winning back the dream of a rainbow nation. A long, hard, and challenging road of reconstruction lies ahead.

However, as we argue in a second article in this edition on the South African socio-political landscape, there are also positive signs that the country can, like in 1994/96 deliver some inspiration to the rest of the world from a base delivered by the 1996 constitution.

Also read: Good story to tell: SA can be global inspiration again

                Southern Africa’s scheming birds of a feather Presidents

by Intelligence Bulletin Team

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