• Saturday, February 24, 2024
businessday logo


Not yet uhuru in South Africa


Nelson Mandela has now been laid to rest. We agree with Barack Obama that he accomplished more than what could be expected of any man.  He was a great statesman and inspirational leader. He inspired us as radical student activists in the 1980s with his posters titled “The Struggle is my Life” which adorned the walls of our rooms.  Yet as we celebrate Mandela, we must also reflect that nearly twenty years after Mandela and the ANC ascension to power, South Africa seemed rather have moved backwards with social inequality levels today far higher than the 1990s. According to the OECD, South Africa today is the most unequal society in the world.  While many of the old ANC leaders have become billionaires, some with obscene wealth , the living conditions of the larger number of black South Africans have not changed fundamentally from apartheid days. Yes, there has emerged a new black middle class, who have been coopted into management riding BMWs and Mercedes in Sandton.  Soweto, Alexandria and Gugulethu however remain what they were, townships of black people with huge youth populations that cannot get jobs.

Shanties are still in place, people living in corrugated iron sheet houses as they lived under apartheid despite the fact that black brothers are now running the state house in Pretoria.  Unemployment in South Africa stands at 24 % with more than half of the children of South Africa according to a 2012 UNICEF report living in poverty.  Despite South Africa being classified as a middle income country, more than 50% of the population continue to live below the poverty line.   Nineteen years after apartheid, South Africa has the highest income inequality in the world with gini index of 64% according to a 2011 Euromonitor report . 35% of the population lives below $2.5 per day. With such social misery indices, it is not surprising that South Africa has one of the highest crime and homicides rates in the world.  Nearly twenty years after apartheid, this could not have been the dream of Nelson Mandela.

South African economy must grow faster to create jobs for its people.  The problem however is that its internal social contradictions manifested last year in waves of labour strikes, an expression of deep  discontent by its working people,  is a major disincentive for investment. It is estimated that the strikes shaved off 8% of projected GDP growth of 2.5% in 2012.  South African labour laws, a gain of the anti-apartheid movement is extremely liberal and progressive, protecting workers right and unionization in the work place. Business however considers it too rigid and inflexible and a disincentive to investment.  South Africa has therefore lost out significantly to more competitive Asian economies like Vietnam for manufacturing investment.  South Africa needs to institute an urgent regime of labour market reforms. It however does not have the social consensus needed to do such given its deep internal social contradictions.

The widening inequality within South Africa has fuelled calls for nationalization of its biggest corporations especially in the mining sector. Such extreme Hugo Chavez type of economic thought has been driven by deep frustrations with South Africa’s social reforms and its slow pace of wealth redistribution. The ANC has outrightly ruled out nationalization of South African mining industry as an economic option. The ANC position is right as such moves will drive away much needed investment while stifling free market and its investment incentives that make business to run profitably. Zimbabwe, just across the border of South Africa has shown that expropriation of private capital and nationalization can only send an emerging economy down in a tailspin of economic abyss. The ANC leadership position is however also driven by self-interest. Many of its key leaders are now co-owners and Chairmen of the big mining corporations.  ANC leaders have unresolved moral issue on their hand even when their economic thoughts may be right given that they now preside over mining businesses whose working conditions are not really different from the same they fought in the apartheid days.

If nationalization is not an option and wealth would have to be redistributed to ease social tension, progressive taxation of the wealthy, their profits and their consumption would have to be squarely on the table.  It is economically and morally justified. Those who have been privileged as legacy white big business owners and their new black empowerment co-owners must give out more to fund investment in education, health and infrastructure that will liberate more South Africans out of poverty.  The progressive taxation regime, well targeted at the South African wealthy should however ensure that it does not become a disincentive to investment which is needed for economic growth and job creation. In addition there should be more social philanthropy especially from black business. Those who were prisoners just twenty years ago, who are now billionaires today because of the privilege of black empowerment have a strong moral duty and obligation to give, to donate to charity, black scholarship and entrepreneurship.

A more fundamental issue however for South Africa in the resolution of its social contradictions is the need to reform its politics. South Africa is like a near one party state with the ANC by its legacy of anti-apartheid struggle virtually dominating its political structures. Yes, other parties exist and are protected by law even among the black population; they however do not command significant following to put the ANC on its toes.  No political party can command the credibility of the ANC among black South Africans.  The ANC is therefore comfortable that it will always win elections at least in the foreseeable future. This credibility legacy of the ANC while being well deserved might have become the greatest problem of South African democracy. ANC leaders seem to be able to get away with anything including the perceived sell-out of its poor black consistency for shares in white capitalist corporations and their use of the instrument of the state, (which they now control) to protect their business interests.  South Africa needs a credible black alternative movement that will compete with the ANC, put pressure on it and force it to reform. There have been allegations of corruption in government typical of sister African states.  Without a credible black alternative movement, there are real dangers that a complacent ANC could lead South Africa the way of the rest of Africa’s weak democracies.   In the interim pending the reform of the ANC and an alternate credible black political party, critical political institutions in South Africa such as the judiciary and the free press will need to be strengthened to moderate the dominating influence of the ANC.

Let us all therefore remember the unfinished business of Nelson Mandela. That while racial political liberation might have been delivered, economic liberty is yet to be for South African black majority. Paraphrasing the words of the late Kenyan elder  statesman,  Oginga Odinga , “it is not yet uhuru”, it is not yet freedom in South Africa. The struggle for true and genuine racial equality must continue.

By: Olu Akanmu