Yet to develop traction, Cape Independence may see support as dissatisfaction grows – Katzenellenbogen

To many, the idea of an independent Western Cape is ludicrous. But for many, particularly residents in the province, it’s the only way forward. The Cape Independence Advocacy Group is striving towards this, with their goal being to create a ” first world nation on Africa’s southern tip.”  But even if the majority of the province were on board, how would it actually work? As Jonathan Katzenellenbogen writes “the path to the new country is likely to be strewn with court cases and referendums.”  Some question whether the Constitution would allow for secession, but there are scholars who insist it’s possible. As the author points out, it won’t be easy – “as a lesson to other provinces that may be thinking of breaking away, the ANC is likely to be hard on the new country.  South Africa would also suffer from a harsh breakaway. For example, the province provides an enormous number of job opportunities for people from the Eastern Cape.” – Jarryd Neves

Would an independent Western Cape be viable?

The movement for the independence of the Western Cape has yet to develop serious traction – but growing levels of dissatisfaction might yet see support for a cause that does not represent politics as usual.

To poor service delivery, frequent load-shedding and low growth, add a natural resource find in the province, and support for the cause could gain impetus. Substantial gas reserves were recently found in the Brulpadda block off the Western Cape coast. Then, add in strong feelings about the national government taking more in taxes from the province than is returned. And then there is the urge to uphold a unique culture. And maybe add a refusal on the part of national government to allow large-scale devolution of powers to the Cape. All of this could amount to a strong motive for a path to self-determination for a gatvol Cape electorate.

The Cape Party, which wants independence, was established in 2007, but so far its candidates have not won any offices. It says it wants to run hundreds of candidates at the local government elections later this year. CapeXit, which calls itself a civil society group, is pushing hard for a referendum on the province’s exit from South Africa, and claims nearly 810,000 online membership registrations.

If it ever comes about, the path to the new country is likely to be strewn with court cases and referendums. There are conflicting legal opinions on whether or not the Constitution allows secession. But some legal scholars insist it would be possible, as self-determination is allowed under the Constitution as well as under the African Union Charter and the United Nations Charter.

The path to greater devolution of powers, and possibly independence, would be greatly helped by provincial referendums, but at the moment these can only be held under national laws. The Democratic Alliance (DA) says it will put forward a private member’s bill to allow provincial premiers to call for referendums. The ANC and its supporters are unlikely to let this pass through Parliament, but it is a start and the matter might ultimately go to the Constitutional Court. This could set the ball rolling to greater assertion of provincial power.

A very long shot

Secession is a very long shot. But would an independent Western Cape be an economically viable entity?

The data we have shows what the Western Cape looks like as a province of South Africa, not as an independent country. Certainly, a secession would mean a good chunk of South Africa breaking away.

The Western Cape makes up about 14 percent of the South African economy. If independent, the country would have a small economy, about the size of Zambia. The province’s population is about 6.9 million, which is 11.6 percent of South Africa’s 58.8 million.

The people of the province are better off on average than those in the rest of the country. The Western Cape had a GDP per capita of about R108 000 last year. That is about 17 percent higher than that for the entire country, which was R86 000. Gauteng and the Western Cape tend to grow faster than the other provinces – 1.4 percent in the five years to 2019 compared to 1.1 percent for the country as a whole. Over the period 2010 to 2019, the Western Cape’s 16.8 percent average annual unemployment rate – defined on the narrow basis of people looking for a job – was the lowest among the nine provinces, and nine percentage points below the national average.

Supporters of independence envisage a small dynamic and export-oriented economy without South Africa’s over-regulation and job-killing laws. And they are pretty sure they would be allowed free-trade deals with South Africa and the rest of Africa.

Taxes raised in the new country would stay in the country. The Cape and Gauteng are hard done by when it comes to what they contribute in taxes and what is ultimately returned to them. Only 45 percent of the taxes collected in the Western Cape are returned to the province.

‘It all depends’

Ultimately, economist Dawie Roodt points out, the answer to the question of whether an independent Cape is economically viable is ‘it all depends’. On the one hand, if the split between the Western Cape and South Africa is full of acrimony, it could be highly costly. On the other hand, if the break is amicable and the Cape becomes part of the Southern African Customs Union, and free movement of labour is allowed, much could be positive.

As a lesson to other provinces that may be thinking of breaking away, the ANC is likely to be hard on the new country.  South Africa would also suffer from a harsh breakaway. For example, the province provides an enormous number of job opportunities for people from the Eastern Cape.

Nationwide business would be disrupted and we all would be poorer because of this. The Western Cape gets a large chunk of its power from outside the province, and it would take time to build up generation capacity.

An independent Cape without easy access to South Africa might not be such a magnet for investment. The province’s investment promotion agency, Wesgro, says it sells the Western Cape as a destination to reach the wider South African and African market, and indeed international markets.

Setting up a new country requires big spending. The Cape would need an army, or at least a border force, a navy or a fleet that could be used for fisheries protection, along with other departments, embassies, a central bank, and much else to show that it is a nation state. And, with politicians keen to get jobs, it is likely a new expensive provincial layer would be added.

There are other less costly options that would allow perhaps less independence, but at least a more secure economic future. A free trade agreement in goods and services as well as allowing the movement of labour would be best for the new country and South Africa. But then South Africa might well insist on the Cape’s adherence to its labour laws, BEE regulations, and much more. This could compromise the entire project.

Federal solution

Much more practical would be to seek devolution of greater powers to the provinces, or an actual federal solution. A federal solution allowing provinces to have far greater revenue-raising powers and to pass legislation on more areas could ensure far better government.

One scenario might be that the force of events allows devolution. Rising central government budget deficits, debt, and inefficiency could mean central government exists in name, but really grinds to a halt. As the central government becomes inefficient, the space might be taken up by provincial governments by force of circumstances. The provinces might then be forced to compete for investment.

The eight ANC-ruled provinces have been largely deferential to central government, although Ace Magashule was able to establish a fiefdom in the Free State. More fiefdoms and greater assertion by the DA in the Western Cape could change the reality on the ground and pave the way to a more devolved system, although not a federal one. The further this goes, the better it might be for the economy.

  • The views of the writer are not necessarily the views of the Daily Friend or the IRR
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  • Jonathan Katzenellenbogen is a Johannesburg-based freelance financial journalist. His articles have appeared on DefenceWeb, Politicsweb, as well as in a number of overseas publications. Jonathan has also worked on Business Day and as a TV and radio reporter and newsreader.

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