South Africa is in a difficult spot, with endemic electricity cuts (and lately water cuts!) leading to decreased confidence and morale across the board. Add in already high unemployment, worsening education, non-existent freight rail infrastructure, and you get a populous that is fairly pessimistic about the future. Blame tends to be put squarely on the ANC for mismanaging the country while in power for the past 30 years. There is a further claim that the ANC is at its roots a criminal organization that is running the country like its fiefdom. I think this is an unproductive characterization and would point rather to the incentive structure of a single-party state that was always very likely to play out this way. I have always been looking to the ANC’s dropping below 50% support as the next key inflection point in SA’s history, and with the opposition parties building momentum to challenge them, it looks like this could happen in 2024. I think South Africa’s narrative is now overly negative, and a lot of folks are understandably losing hope, but at exactly the wrong time.
Context matters
Apartheid was officially in place for c.90 years (some would argue shorter or longer depending on the policy) in South Africa. It was a despicable policy, but one that did achieve its aim of stopping the progress of black workers, in favour of the white Afrikaner working class. A few statistics illustrate this point. The ratio of black to white workers in the mining sector (one of South Africa’s biggest employers) increased steadily up to 1922, when it peaked at 11.4:1. At the peak of apartheid, this ratio had dropped to 6.4:1, despite the white population not growing materially during that time. The ratio of jobs in railways (also a big employer) dropped from 75% to 49%, while that of whites rose from 10% to 39%. The ratio of spending on education was the most jarring. In 1952, 20x more government funding was spent on each white child’s education than was spent on a black child’s. By the end of it, you had a country with close to 90% of the economic output being reserved for c. 10% of the population.
It is unsurprising that this left most of South Africa in a dire state when apartheid ended. So unjust and cruel were the policies put in place during apartheid that it was incredibly unlikely that there would be a peaceful transition out of it. Many predicted a civil war or some form of chaos, and judging from history it was very unusual the way the transition happened. Property rights largely remained intact, with Mandela’s government planning many policies to attempt to right the wrongs of the past, but not by taking assets and distributing them. Rather, the ANC’s policy was that of growing the country with a bias towards those most affected by apartheid. The ANC has not succeeded in executing on this policy and while some point to this as an outright failure of governance, others have recently started criticizing Mandela for doing a ‘soft deal’ when apartheid ended, citing this as the cause of the problem. Whether true or not, a smooth transition was certainly preferrable to a civil war that was the predicted outcome at the time.
A system with incentives
The result of South Africa’s first election was unsurprisingly a very dominant ANC, with c. 62% of the national vote. This peaked at c. 70% in 2004, before gradually declining. The ANC’s dominance of the political landscape was never in doubt though. Everyone within the ANC structure knew this to be the case – they essentially had a 30-year + run at power before anyone could even think about challenging them. The incentives were thus to aim for power within in the ANC structure, with very little benefit to be gained from doing things that would benefit the country and harm one’s standing in the ANC. This is not to say everyone in the ANC was bad and didn’t want to act to the benefit of the country, but it did mean that a strategy of playing power games within the ANC was likely to dominate one that tried to benefit the country while harming their standing in the ANC (when these objectives didn’t overlap, which they often don’t). With the rules set, the game played out predictably, with the top echelons of the ANC being filled with those that were focused on getting to the top, while the country suffered. The fastest way to get power was to buy it, and money changed hands at a rapid rate. Once in power, favours were repaid through the handing out of contracts, while the legal system was intentionally handicapped to make sure this could take place without consequence. In a state where multiple parties face a chance of winning, such behaviour is stopped through a competitor party exposing it and winning an election as a result. The incentive is to beat the other party, and conducting corrupt activity on a grand scale that doesn’t benefit the country is disincentivized through the knowledge that it’ll lead to a loss of the next election and likely jail time thereafter.
The wrong comparison
But what of Singapore?? An oft-cited but inappropriate counter-example. Singapore, while having colonial rule, did not have apartheid. They were a city state with a population of 2m and unemployment of 9% when colonial rule ended (vs South Africa’s 45m population, 30% unemployment and much larger and dispersed country). Their improved living standard is impressive, and while this also would have been deemed unlikely under a single party state rule, they cannot be compared to South Africa, where the challenge was immeasurably larger.
The potential inflection
The ANC’s monopoly on power is now coming under challenge. Various polls (who knows how accurate) indicate that the ANC’s support will fall below 50% in 2024. Even knowing this, the ANC cannot change. It is filled with folks who have followed the best strategy for power and won’t change to one of best governance for the country. The hope that the ANC would ‘mend its ways’ was always naïve unless they lost power and changed from the outside. The incentives for other parties to mount a real challenge to the ANC has now grown tremendously. For 30 years, this has largely been a waste of time as everyone knew the ANC would win. Well-funded parties like the EFF, Action SA and others, are now campaigning for voters across South Africa well ahead of the 2024 election and if the ANC’s support does drop below 50%, this will be an inflection point for South Africa.
The outcome of these changes is unknown, and will depend what parties and citizens on the ground do to make the future happen. Anyone who thinks the future is a foregone conclusion is wrong, and choosing to be so pessimistic that one thinks it is not worth doing anything to create change is an attitude that will result in those same people’s worst nightmares coming true.
South Africa has always had a lot of potential, being rich in natural resources, and having a sophisticated financial sector and legal system in place. There are obvious problems – a poor health system, poor education system, very high unemployment and broken infrastructure. These can be fixed, they just need a government that is incentivized to fix them. This may come into place in the not too distant future, making now the perfectly incorrect time to give up hope.
Interesting piece, James. Looking at the outcomes of the next election in the scenario where the ANC has less than 50%, who would they be best incetivised to form a partnership with? Their core remaining electorate would probably find the EFF most palatable given the manner in which the DA has alienated black voters over the past few years, but one would hope that Ramaphosa would prevent this happening against the wishes of some in his party (Mashatile et al). Big few months for ActionSA, the DA and indeed the country.
Brilliantly written. Not a commonly held belief but one that's well articulated!
Reminds me of one of my favourite sayings: "Show me the incentive and I'll show you the outcome".