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Will the South African precariat drive our new dawn?

11 July 2018Sanlam
Aubrey Matshiqi, presenter at the annual i3 Summit, hosted jointly by Sanlam Investments and Glacier by Sanlam.

Aubrey Matshiqi, presenter at the annual i3 Summit, hosted jointly by Sanlam Investments and Glacier by Sanlam.

‘History is a timeless repetition of error, folly and correction,’ said Aubrey Matshiqi, presenter at the annual i3 Summit, hosted jointly by Sanlam Investments and Glacier by Sanlam.

And not just locally, but worldwide there seems to be much that stands to be corrected. ‘When one looks at the wave of populism in the US and in Europe, citizens are tired of the excesses of the political and economic elite; they are tired of inequality,’ observed Aubrey. In the UK a large part of the middle class has become known as the ‘precariats’, meaning their financial position has become precarious. They are also in and out of jobs and often performing unfulfilling roles not meeting their levels of expectation, education and/or skill. Elsewhere in Europe, the precariats have become the main drivers of this wave of populism.

International trends have an impact on SA too. For example, the decision by the US to walk away from Iran will have a direct impact on companies like MTN, who would now likely need to look for alternative sources of oil, and it will have an impact on all South Africans because of the impact of higher oil prices on inflation.

Like the US and Europe, SA too needs to urgently address its inequality. ‘We are made to believe that the greatest challenge facing SA is corruption. But SA will know no peace until it conquers its main challenge – inequality,’ cautioned Aubrey. Tragically, during the Zuma era, South Africa lost both her innocence and her moral compass. Will the new Dawn be able to eradicate the inequality in this country?

What policies are the ruling party adopting? Can they address inequality and at the same time the concerns of investors and ratings agencies alike? At the Nasrec conference at the end of 2017, the ANC called for radical economic transformation. ‘I cannot see any investor supporting radical economic transformation,’ Aubrey said. ‘And I cannot think of a single investor that is in support of land expropriation without compensation – as was resolved at the conference in December. But as you know the ruling party is very good at speaking left and doing right.’ Aubrey does not expect land expropriation without compensation while the ANC remains in power.

‘Ramaphosa needs to make some tough decisions to address both the lack of investment and economic growth, and the inequality in the country. But he is leading a deeply divided party. Therefore one of Ramaphosa’s main challenges is to neutralise internal opposition. For as long as the internal opposition continues, the Ramaphosa presidency will not be able to make tough decisions without the consent of his opponents within the party. The first sign of the division was when his Cabinet was chosen for him, portraying not his power but the limitations of his power.’

Aubrey cautioned that the current notion that Ramaphosa will liberate South Afica is ‘hysterical optimism and unfair to Ramaphosa’. A new dawn will need not only strong leadership but also the active participation of the electorate and of civil society.

‘What gives me hope is this,’ said Aubrey, ‘in the 2016 elections the ANC lost Tswane, Nelson Mandela Bay, Rustenburg and so on. It tells us that the people, as the key force of the revolution, can exercise free and independent thinking to the detriment of the ruling party. In 2018 this is again our challenge – to exercise free and independent political will.’

‘Whether there is a new dawn depends partly on Ramaphosa and his moral courage and partly on our participation in society. Reconciliation will only happen when we economically restitute the victims of apartheid and if we erase income inequality.’

Quick Polls

QUESTION

Between 1918 and 2014, 32% of all of Lloyds of London’s insured losses were caused by flooding. With Climate change becoming a growing issue, is this a growing concern for insurers?

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