The ANC has chosen to consume, not grow, the economy
With municipal elections scheduled for August this year, PSG sat down with Moeletsi Mbeki as part of its 2021 Think Big webinars – a series of dialogues with thought leaders hosted by award-winning financial journalist, Bruce Whitfield.
“We want to help viewers formulate their own opinions on some of our country's most pressing issues,” said Ronald King, head of public policy and regulatory affairs at PSG. “During this pandemic, uncertainties and challenges abound, but we believe that armed with quality insights, we are better equipped to chart the way ahead.”
An international political analyst, entrepreneur, author (and brother of a former President), Mbeki is Deputy Chairman of the South African Institute for International Affairs (SAIIA) and a member of the Council for The International Institute for Strategic Studies, based in London.
During the 40-minute discussion with Whitfield, Mbeki came back several times to the idea that for the current generation in power, and those that vote for them, ‘it’s time to eat.’
He told viewers that irrespective of potential economic risks to the country, the ANC’s primary voter base – the approximately 25.6 million rural voters, many dependent on social grants – is the government’s focus.
“You have to put yourselves in the ANC’s shoes, where for over 100 years they’ve been deprived, so now it’s their turn at the table,” Mbeki said. “To invest and grow the economy requires saving, and they’ve decided to put that off to the next generation.
“So, they're eating. And they must keep their voters eating too, to stay in power. As a result, there’s no money left for financing investments in the economy. We are one of the highest-taxed countries in the world, yet, together with Egypt, we have one of the highest unemployment rates in Africa and the lowest investment as a percentage GDP.
“You can’t both eat and grow the economy, you have to make a choice, and the ANC has made that choice.”
Mbeki said black South Africans have been angry for a long time, now they are sitting at the dinner table, and having three helpings. “Everyone knows that eating that much isn’t sustainable and will probably kill you.”
The younger generation doesn’t feel deprived to the same extent. Better educated and more professional, they’re changing their mindset away from one of grievance to one of building the country. Unfortunately, they are not really finding a political home, Mbeki said.
South Africa is still in a long transition cycle, with one-party dominance; but this is changing. The ANC is declining. At one stage the party was 70 percent of the electorate but at the last local elections, it lost control of the biggest metros in the country. How will it fare in 2021?
Julius Malema has recommended that local elections be postponed because of Covid-19, but Mbeki dismissed this saying that countries around the world are holding elections during the pandemic.
Turning to the vaccine, Whitfield asked if the government’s handling of it could negatively impact it in the voting booths. “The vaccine fiasco is showing the incredible level of incompetence the ANC government has sunk into. We know the party has been in trouble for a while in terms of managing its own internal affairs. Now we are seeing the lives of literally thousands of people being put at risk due to this incompetence.”
Bungling the acquisition of the vaccine affects every South African, irrespective of colour or class. This will certainly impact the vote in the coming elections, said Mbeki. “Add this to the fact that the urban population has started to abandon the ANC anyway, and it will be interesting to see what happens at the polls.”
King closed the webinar with a reminder of the importance of having a professional financial adviser to guide you through the highly uncertain environment caused in part by Covid-19 but also by the long history of South African politics.
