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It really is no cliché to say that the national elections on Wednesday will be critical to the future of all South Africans.
From social indicators such as poverty levels and unemployment to macro-indicators such as GDP performance and debt levels, this is an economy in deep difficulty. Combined with declining levels of governance integrity via increasing corruption, the stage is set for the most important vote since 1994.
Simply put, the status quo is untenable. Something has to give. The mismanagement, rot and policy paralysis have to change. The choice is stark – fundamental structural and ideological shifts are needed to arrest the decline. Nothing short of that will disappoint on the downside, leaving the country vulnerable to further social decay, the perpetuation of inequality and, more worryingly, the re-fuelling more populist alternatives.
Economists and the broader business community argue that a solid ANC win – seen by them as a vote more for the Ramaphosa factor than anything else – will begin a process of restoring faith, dignity and prudent policy choices from the governing party.
More than talk
Assuming a Ramaphosa victory on May 8 at around 57% of the popular vote, the mandate is clearly sufficient to a new course. But, the realpolitik of the ANC within the context of a changing domestic political environment remains an impediment to real change.
It will simply not be good enough to talk up economic change. Policy actions will be required. And, in an ANC still deeply divided on a variety of core issues, Ramaphosa’s victory might provide him with the constitutional power, but less so within his own party.
The ideological paralysis within the ANC will need to be broken on the issue of the role of the State-Owned Enterprises – particularly that of Eskom. Ramaphosa and Finance Minister Tito Mboweni (if he survives into the new Cabinet) may well be ahead of the broader ANC decision-making bodies and rank-and-file-membership when it comes to relinquishing some shareholdings in the loss-making behemoth.
Heads in the sand
For the entire election campaign, the ANC have largely shied away from dealing with the issues of what to do about the SOEs. The party has simply been too afraid to come clean to its own electorate that a change-of-thinking is required to deal with the relationship between the state and its SOEs.
Although Mr Mboweni had mooted the idea of a re-think on government’s historical desire for SOE control, it’s an issue that has simply been ignored on the campaign trail. Indeed, the inability of the state to manage SOEs is at the heart of the fiscal cliff South Africa stands upon. There has been no desire to deal with this issue honestly and openly in the campaign as the divisiveness it causes within the ANC means it’s better left untouched – at least for the sakes of unity during campaigning.
Similarly so, the issue of nationalising the Reserve Bank has received scant attention. Whilst it might be more of an esoteric issue to an electorate concerned about bread-and-butter issues, it cuts to the heart of restoring confidence in the domestic economy.
Although more symbolic than anything else, avoiding a formal nationalisation would send a message of confidence to domestic and global investors. Again, the issue divides the ANC internally with little consensus.
Land and the Constitution
And of course, the third major issue – is that of land expropriation without compensation and the pending constitutional amendment to clarify this. It is quite remarkable that this issue has been so buried in the election campaign. Clearly, the restoration of confidence in the domestic economy will rest on clarity regarding tenure/ownership rights. With days to go before the vote, South Africans still have absolutely no idea what government policy will be on an issue that can result in substantial conflict.
More broadly speaking, a future Ramaphosa administration is expected to court the private sector to a greater degree. This it can largely do with the backing of the larger ANC. But, the issues of SOEs, the Reserve Bank and Land can well undermine any overtures made to the private sector for greater domestic or foreign direct investment.
Fundamentally, the hard work for Ramaphosa will only begin after he wins the election. And much of that work will be within his own party.
What will the composition of his new Cabinet be? Will it review and completely overhaul the existing economic cluster of Ministers? Can Ramaphosa steer a review of moribund ideological myopia within his own party to shift towards a greater role for the private sector? Can he ‘sell’ a divestiture – at least in part – of aspects of the SOEs? Can he lessen deleterious effects of cadre deployment that has – at least in part – been so detrimental to the SOEs decline?
Can Ramaphosa instil some commitment to greater deregulation on broad economic policy and so remove the influence of those old-style ‘statists’ who still see the role of government as bigger and all-encompassing? And, can he tweak the demands of the trade-unions to create a more competitive work-force attractive enough to secure FDI and breath life back into key employment-creators like the ailing manufacturing sector?
These are big issues. And fundamental to the ideological straitjacket that the ANC has found itself in. The battle-lines will be within the ANC despite what could be a solid mandate on paper for Ramaphosa. And, with the EFF likely show the most growth of any political party on Wednesday, the debate on just how far Ramaphosa can go is likely to become even more problematic.
Ultimately, Ramaphosa will have a choice. Will he put the interests of his own party first – their divisions, history and fears of a stronger EFF – or will he put the interests of South Africa first in its urgent needs to real structural and policy reform? It’s the ultimate test for any leader – and one of critical importance within the South Africa of 2019. The challenge awaits.
Daniel Silke is a political analyst, author and keynote speaker. Views expressed are his own.
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