If the polls are correct, the ANC faces the possibility of losing its majority in South Africa’s national elections on the 29th of May this year. So, what went wrong for Nelson Mandela’s once proud political movement? Businessman and independent political analyst, Moeletsi Mbeki has identified five deadly sins that have contributed to the ANC’s downfall and the country’s current issues. In an interview with BizNews, Mbeki highlights the policies of Broad-Based Black Economic Empowerment (BBBEE) and the ANC’s decision to cultivate a middle class through public service employment and affirmative action, rather than fostering entrepreneurship. He notes that these employees are among the highest-paid civil servants in the world. Mbeki also criticises the ANC’s decision to retain state-owned enterprises instead of privatising them, citing the success of privatised company SASOL. The fourth and fifth sins, according to Mbeki, are the government’s policy failures in Zimbabwe and Mozambique and the removal of military control over South Africa’s land borders, leaving the country vulnerable. He poses the question: Who can prevent Islamist rebels from entering South Africa and planting landmines? President Ramaphosa, Mbeki said, has repeatedly made it clear that he is sticking to these policies and the ANC is not planning to change course. As a result, public support for the ANC is waning due to these “five deadly sins.” Mbeki however, forecasts that whatever government is produced by the coming election, the ANC will remain central to it. This means he said, “We will continue with this stagnation we are sitting with. Whoever is in coalition with the ANC will have to live with that.” – Linda van Tilburg
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Relevant timestamps from the interview
- 00:00 – Introduction
- 00:41 – Moeletsi Mbeki on what he means by ANC’s five deadly sins
- 01:37 – Sin#1: Not privatising SOE’s
- 09:29 – Sin#2: misuse of BEE
- 12:01 – Sin#3: Destruction of democracy and economy of Zimbabwe
- 13:49 – Sin#4: 55 000 civil servants earning over R1 mil
- 18:31 – Sin#5: Borders unguarded, open to terror attacks, pressure on local communities
- 23:38 – Prospects for ANC in the elections
- 27:00 – The reception to his five daily sins analogy
- 28:12 – The opposition parties prospects
- 29:32 – ANC no longer the dominant party
- 31:20 – ANC for the next five years
- 32:33 – The problem with the opposition parties
- 36:40 – Conclusions
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Highlights from the interview ___STEADY_PAYWALL___
First sin: Not privatising SOEs, no skills to run them
I have identified five grave mistakes committed by the ANC. The first was their failure to privatise the state-owned enterprises inherited from the National Party regime. It is often overlooked that the National Party was primarily a party of farmers. To increase productivity, these farmers had to construct infrastructure that spanned the vast expanse of South Africa. This infrastructure enabled their produce to be delivered to the mining centres, which were the emerging urban centres. The mining industry was solely interested in extracting gold and diamonds, leaving the state to build the railways and other necessary infrastructure for the farmers. As a result, a multitude of state-owned enterprises were developed to service the agricultural sector.
The regime at that time understood the need to train people to manage these industries. One of the most notable individuals was Van der Bijl, an Afrikaner engineer and metallurgist who established the Iron and Steel Industrial Corporation, South Africa’s steel industry. (ISCOR) This corporation was also state-owned because the mining companies and the stock exchange were not interested in setting up a steel industry in South Africa. They advised South Africans to buy steel from Birmingham or Sheffield if needed.
We must remember that we were a colony. The ANC inherited this network of state-owned industries but lacked the skilled personnel to manage them. The National Party had been in power since 1924 and over nearly 70 years, it had developed a workforce with the skills to manage these massive industries. The railway company and the electricity company were among the largest companies in Africa. These were complex organisations.
The ANC, as we know, had been discriminated against, and the education of African people had been systematically undermined over many years. So, they lacked the necessary skills. When they became the government, it did not automatically mean they possessed the skills to manage these enterprises. As they say, the rest is history. Instead of privatising these enterprises, they attempted to manage them themselves and, understandably, they failed.
Mandela should have realised skills gap in South Africa, SASOL success story
Our electricity company has been in crisis for the last 16-17 years, unable to provide the electricity that the country needs. Despite the government’s repeated assurances of fixing the issue, they have been unable to do so for 17 years. Interestingly, a study conducted by Harvard University, led by the distinguished Venezuelan economist Ricardo Hausmann, pointed out that Chile had faced a similar electricity crisis to South Africa. However, Chile managed to solve the problem in five years, while 17 years down the line, the ANC government still hasn’t resolved the issue.
We often underestimate the destructive power of Dr. Verwoerd’s ban on education. We tend to forget the devastating impact it has had on the Black population in South Africa because we don’t want to discuss it. Discussing it doesn’t imply that black people are inferior. It’s about acknowledging that they were systematically denied the opportunity to acquire the necessary skills, a strategy deliberately implemented by Dr Verwoerd and his associates. The leadership, particularly under Mandela, should have had the wisdom to recognise their inability to manage these companies due to this skill gap. It’s not about inferiority but about the consequences of a system designed to withhold opportunities.
SASOL, example of a successful privatised SOE
Coincidentally, one of the enterprises privatised from this state-owned portfolio was a company named Sasol. Sasol, which produced petrol from coal, was also a state-owned enterprise. It had to be state-owned because no one was going to invest in such an unconventional idea when natural petroleum was readily available and cheap in the Middle East. So why go to the expense? However, the then National Party government was afraid of sanctions, so it developed this oil-from-coal technology. This was privatised before 1994. Today, Sasol is one of the most successful chemical companies in South Africa, with branches in Qatar and the United States, among other places.
But South Africa doesn’t lose anything. Many people think that when you privatise a company, foreigners will simply put it in their handbag or briefcase and take it away, perhaps to Switzerland or England. This is a naive understanding of privatisation. They think the asset gets taken out of the country.
I remember there was a debate some while ago when Richard Branson bought a wine farm in Franschhoek. There was a whole hullabaloo, with people saying, “Oh, a foreigner is buying our wine farm,” as if Richard Branson was going to put the farm in a suitcase and take it to England. The farm is still in South Africa and will remain so. These are some of the challenges we face.
2nd Sin: BBEEE, MTN only new black-owned industry
After a century and a half of excluding the black population from skills development due to job reservation, the majority of the black population had very low skills. They were not property owners and were excluded from setting up companies. So, after 1994, what we needed to do was to encourage the black population to become entrepreneurs and raise their skill levels. Instead, they were given pre-existing wealth in existing companies. That’s what Black Economic Empowerment is on one side. On the other side, they were given highly-paid jobs in the public sector.
We haven’t developed new industries in South Africa since 1994. As far as I can tell, the only new black-owned industry is MTN, the mobile phone company. That’s the only substantial black-owned company that has been developed during the last 30 years. Why? Black professionals are in government jobs, highly paid government jobs and many of them are in middle management in the existing private sector. They are not entrepreneurs.
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3rd Sin: 55 000 civil servants earning over R1 mil
In Asia, people often ask why South Africa is not like the Asian Tigers. In the Asian Tigers, there are no highly paid jobs in the public sector. I once visited a steel plant, a plant making locomotives in China. The salary of the CEO at this plant, which was in Sichuan, was equivalent to 300,000 rands a year. The person who was running Transnet in South Africa, Brian Molefe, was earning R6 million.
So, we have this highly paid public sector administrative class, which is taking resources from the production side of our economy that is functioning through the tax system to pay this massively overpaid administrative class. A few months ago, the government revealed that 55,000 public servants were earning a million rands a year each. There was a joint project between Germany and South Africa. Germany had to engage South African public servants to administer the project and had to pay them. The Germans found out that these individuals were being paid more than German public servants. So they said, no, we’re not going to pay more than what civil servants in Germany earn. So, we’ve had a very destructive administration of South Africa during the last 30 years. People focus on corruption. Corruption is just a symptom. It is the key structural policies that are the fundamentals.
4th Sin: Ignoring Zimbabwe’s Ruin, Mozambique’s Heroin Trade
The fourth sin was turning a blind eye to the destruction of democracy and the economy of Zimbabwe. Zimbabwe is a crucial neighbour to South Africa, and any disruption there has a significant impact. The destruction of Zimbabwe’s economy and democracy led to a flood of displaced people into South Africa, which is exactly what happened.
Another destructive process was taking place in Mozambique, where Frelimo, the ruling party, started importing heroin from South Asia to finance itself and selling it to South Africa. The ANC government turned a blind eye to this as well. The Americans discovered that this heroin was leaking out to the United States. They sent someone to South Africa, caught the person who was selling this heroin to the United States, and had him deported. He is currently serving a sentence in prison in New York.
However, South Africa has done nothing. A report by the London School of Economics provided the names of the people who were importing this heroin to sell in South Africa. The South African government should have these people in prison, but it has taken no action.
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5th Sin: Borders unguarded, open to terror attacks, pressure on local communities
South Africa, with more than 4,000 kilometres of land border and situated within the southern and eastern Africa region, appears enormously wealthy relative to its neighbours. In terms of GDP per capita, South Africa is nearly $7,000 per capita, while Zambia and Zimbabwe are in the hundreds. When there’s disruption in neighbouring countries, people see South Africa as a haven and cross its borders, irrespective of formal immigration systems. This influx puts pressure on the poor in South Africa, as these individuals settle in poorer neighbourhoods, such as the informal settlement north of Sandton, called Diepsloot. This has led to friction between local communities and foreigners, contributing to the so-called xenophobia problem in South Africa.
However, that’s only one side of the problem. South Africa, through its membership of the Southern Africa Development Community, has to get involved in pacifying Southern Africa. For example, South Africa is currently deploying to the Democratic Republic of Congo (DRC) to fight a rebel group called M23, which is supported by Rwanda. Rwanda has teams of assassins in South Africa, who have killed one person, an opposition leader to the regime in Rwanda, and tried to kill another one. Without border control, these teams from M23, which South Africa is fighting, can easily enter the country. South Africa is also in Mozambique, fighting so-called Islamist rebels as part of a SADC peacekeeping mission. Without border control, nothing is stopping these Islamist rebels from entering South Africa and planting landmines.
The South African army has been allowed to decline because the funds that are used to fund the army are being consumed by a highly paid civilian administrative class. For example, our attack helicopters called the Rooivalk, are not operational because the pilots don’t have enough time to fly and there are no spares. We have a troop carrier helicopter, which was shot at a few weeks ago while carrying an injured soldier, but it didn’t have protection. It should have had protection from a Rooivalk so that when it’s fired on, it can return fire. These are the consequences of what I call the five deadly sins that have put South Africa on the verge of what one expert calls a failed state.
No absolution for the ANC, ruling party will be central in government after May election
In the Catholic practice, if you have sinned, you confess your sins to a priest and are told how many Hail Marys you should do, but you must stop sinning. For the ANC, the electorate serves as the confession box. The ANC has made it clear it does not intend to change its ways. Ramaphosa has repeatedly affirmed his commitment to the policy of black economic empowerment and the highly paid administrative class. He is not changing the education system to produce individuals with the technical capability of a South Korean population.
The population feels that after nearly 30 years, they’ve given the ANC a chance and they have lost. People think it will be the first time that the ANC loses the national election now. But actually, in the local government election in November 2021, the ANC got 45.6% of the vote. So it has already lost the national election. It has lost all the metros, except probably East London. The ANC used to control all the provinces and all the eight metros. It has lost all of them, except the smallest, which is East London. It now is in power as a coalition in Johannesburg, for example, run by a coalition of the ANC and the Economic Freedom Fighters (EFF).
So it’s clear that the population also realises these five deadly sins and is stopping voting for the ANC. But of course, our other problem is that we have this fragmentation of opposition parties. But I see that as part of the democratic process, because the ANC has been so dominant, the opposition has not been able to consolidate. So for now, the expectation is whatever government is produced by this coming election, the ANC will still be central to it, even though it will no longer be a majority party.
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