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The ANC’s five deadly sins – and what  the future holds for SA beyond the 2024 elections

Outspoken political economist and analyst Moeletsi Mbeki discusses in detail what he regards as the governing party’s gravest mistakes, and makes predictions about the 2024 elections and what the future holds for South Africa.
South Africa 2024 National Elections Analysis Special Edition    
His late father was Govan Mbeki and his brother is former president Thabo Mbeki, both leading intellectuals and important figures in the formation and growth of the ANC. However, businessman and independent political analyst Moeletsi Mbeki is adamant that the ANC has committed what he calls five “mortal sins” during its 30 years in power.

In a wide-ranging interview to reflect on the three decades of democracy, and challenges and solutions for South Africa, Mbeki listed the five mortal sins as:

Adopting Broad-Based Black Economic Empowerment (BBBEE) as a government policy;
Growing the black middle class through affirmative action as an employment policy in the public service and state;
Retaining inherited state-owned enterprises instead of privatising them;
Foreign policy failures in Zimbabwe and Mozambique; and
Removing the military’s control of South Africa’s land borders.

Some of the fallacious policies implemented by the ANC, Mbeki maintains, include BBBEE and affirmative action. These, he says, have broadened the black middle class, but have alienated all the other races and led to stagnation in the economy.

“The ANC adopted the BBBEE policies that were started by business to ingratiate itself with the new ANC rulers by giving money and shares to individuals like Dr Nthato Motlana, Cyril Ramaphosa, Patrice Motsepe, Saki Macozoma, Tokyo Sexwale and other individuals connected to the ANC.

“It also created a black middle class using affirmative action policies by creating jobs and perks in the state, and offering early severance packages to whites who were in the public sector. Those who took up those jobs did not have the capacity or skills to run the departments that they were now in charge of.

“You see this when things are falling apart in the public sector. The classic example of this failure is in municipalities – many in this country are on the verge of collapse, and others have already collapsed and cannot deliver services,” said Mbeki.

“The ANC could still have created the black middle class by making available opportunities for them to be productive industrialists, farmers, artisans and small business owners who would build the country, and create wealth at the same time.

“The current forms of BBBEE and affirmative action, as implemented, confirms the stereotype that blacks are inferior to whites and they cannot create wealth on their own, and thus need white handouts to survive.”

MORTAL SIN 2: Affirmative action as an employment policy in the state

Although the private sector was correct to implement BBBEE, it has had a catastrophic effect as a state policy, Mbeki says.

“Business can do what it wants – within the law, of course – but it does not have the mandate of nation-building. As the ruling party, the ANC had the role of nation-building. Instead, it has adopted policies that benefitted only the African elite and alienated everyone else, including the poor blacks, the whites, coloureds and Indians.

“About 40% of coloured voters voted for the ANC in the first democratic elections and 19% of Indian voters voted for it. Now, less than 4% of coloured voters vote for the ANC because of BBBEE and other policies that discriminate against coloureds and Indians,” Mbeki said.

“The whites didn’t care because they have never voted for the ANC, but these other race groups felt betrayed because they were discriminated against during apartheid and now the new government policy also discriminated against them.

“The most discriminated-against group in South Africa is the coloured community. They were uprooted from their countries in Africa and Asia to come to South Africa to endure 200 years of slavery. Their living standards now have not improved much from the time when they were under slavery. BBBEE and affirmative action discriminate against them, and discriminate against In­­dians and whites.”

‘Parasitic’ black middle class
Mbeki believes that the ANC has crippled the country’s economic advancement by creating a black middle class that is dependent on the state and public service perks for its sustenance or prosperity.

“The ANC is a party that benefits the black middle class. It has done this by offering early severance packages to white civil servants at the dawn of democracy and replacing these whites with blacks.

“This black middle class don’t produce anything, yet they pay themselves huge salaries and other perks. The South African public servants are the highest paid in the world as a percentage of GDP.

“In South Africa, as of November 2023, there were 55,000 civil servants who were earning more than R1-million. This is the highest in the OECD [Organisation for Economic Cooperation and Development] countries. These are people who have a parasitic relationship with the state, wherein they get huge salaries for doing absolutely nothing, ” Mbeki said, adding that the state taxes the private sector and mineral companies to deliver that tax to public servants.

MORTAL SIN 3: Retaining SOEs instead of privatising them
Mbeki believes that, for all intents and purposes, the ANC was not ready to govern South Africa and its complex economy when it took over the country in 1994. And once it took over, it repeated a number of mistakes committed by post-independence countries in the north.

He maintains that the ANC should have privatised most of the more than 700 state-owned enterprises (SOEs) it inherited from the apartheid regime.

“Sasol was privatised just before the ANC took over. It is now a cutting-edge global energy company with factories, service stations and other facilities in South Africa, Canada, Gabon, Mozambique, Australia and 27 other countries. Telkom is also performing greatly after it was partly privatised.

“All vital state-owned companies that the ANC retained under the state are faltering. Eskom, Transnet, Prasa, Denel and the [SA] Post Office are the most scandalous failures.

“A banker by the name of Mark Barnes [CEO of the SA Post Office from 2014 to 2019] approached the government with a vision to turn around the SA Post Office and its subsidiary, Postbank.

“He said the Postbank would be at the centre of this turnaround strategy, and this was opposed by key government officials. He had to leave before the end of his term after failing to win the confidence of the political leaders. Now the Post Office is in a mess and 6,000 workers are facing retrenchments,” said Mbeki.

“When the ANC took over, it should have protected the local manufacturers against foreign competition before opening up the country. As a result of this deindustrialisation and other disastrous economic choices, there was a bloodbath of job losses in the manufacturing, mining, textiles, steel and other sectors of the economy.

“The unemployment rate and associated poverty is higher in townships and black areas in general. This is because the black population is 80% of the population of South Africa and is the great majority of blue-collar workers. ANC government policies that have led to the deindustrialisation of the economy have created unemployment among these blue-collar workers, who are mostly black and live in townships and in the former homelands.

“For the past 15 years, the South African economy has been growing backwards. This has been largely due to the underperformance of state-owned enterprises – Eskom and Transnet, both of which have been major obstacles to the growth of the economy. Eskom cannot provide an uninterrupted supply of energy to power the growth of the economy, and we cannot export our minerals and goods to international markets because of the problems overwhelming Transnet.”

Investment boycott
Mbeki says business has been holding back on investments – which would otherwise create jobs – as a result of inefficiencies.

“Business controls more than 75% of the South African economy. It creates most of the jobs in this country, and produces the food we eat and builds the houses we live in. Business is handicapped from growing by the underperformance of state enterprises.

“The state also taxes the profits of business, which business needs to reinvest in order to grow the economy. That tax is used by the government to promote private household consumption such as social grants, and government consumption.

“A significant part of household and government consumption comprises imported products like Scotch whisky products not made in South Africa,” he said.

White Monopoly Capital scaremongering

The term ‘White Monopoly Capital’ became part of South Africa’s lexicon during the era of President Jacob Zuma and polarised people along racial lines. This White Monopoly Capital, said proponents of the so-called Radical Economic Transformation grouping, controlled the country’s politics and guzzled all its economic gains, leaving everyone poor.

Mbeki doesn’t believe that White Monopoly Capital exists. “This term was coined by a conservative British PR company, Bell Pottinger, that had worked closely with former British prime minister Margaret Thatcher.

“This name was coined by this PR company at the behest of the Guptas, who were stealing billions from South Africa and wanted to use the term to divert attention from their grand theft,” he said.

Read more...

Moeletsi Mbeki - Economist