Director's Cut: Dr Frans Cronje - Why the DA's biggest threat isn't the ANC

Frans Cronje delivers a hard-hitting assessment of the Democratic Alliance's internal turmoil, John Steenhuisen's dramatic fall from grace, and what it means for South Africa's political future. He argues the DA's biggest challenge is proving it can govern better than the ANC, warns that voter confidence is slipping, and explains why Helen Zille's Johannesburg ambitions could reshape the country. Cronje also defends Tony Leon, dismisses state capture claims, and outlines why he remains cautiously optimistic about South Africa's future..Watch here.Listen here.Edited transcript of the interview.Alec Hogg (00:05.948)Dr Frans Cronjé is with us in studio for a catch-up, as so much has been happening, Franz.Let's start with Mr Steenhuisen and the whole DA issue. The polls leading up to that interview that John Steenhuisen had with News24 suggested that the DA was in for a fantastic 4 November local election. How are you reading the impact of that?And where might we be standing now?Frans Cronje (00:38.034)The Steenhuisen story, and the way I've thought about it, is complicated.I saw him in action ahead of the formation of the GNU, and he was excellent. We all owe him a lot of credit for what he did there. He was often put in a very difficult situation and was magnanimous.I recall one afternoon Mr Ramaphosa put him in a very difficult position, sufficient to walk away. He understood that that wasn't an option.He also faced opposition to the GNU within his own party - legitimate opposition. There were arguments both ways. But he pushed through and helped to make the thing happen, together with some of his ANC counterparts. I think that was extremely important. I think it saved the country.Had we faced the shock of an MK–EFF government at that moment, the sentiment consequences, and what could have happened in the bond market and the rand, might have been irrecoverable.So he did very well.He also did very well to get to that point at all. He was the guy who led the DA when the ANC lost its majority and got the DA into government - achievements on a scale that... I mean, you can think back to some of his predecessors, but they might have dreamed of that.He also took the DA to its best-ever polling results and to its strongest support amongst black voters. He deserves a lot of credit for all these things.There's a habit in these matters to put someone in a box - they're either bad or good - but too many analysts make the world neat, tidy and easy to understand.Regrettably, I thought his performance in the Agriculture Ministry was very poor and caused damage to the DA brand and to the whole idea.I thought the policy was wrong-headed - to centralise vaccine procurement and administration in the state. As a matter of policy, it was the wrong idea. The DA should have been pressing for much more private sector activity, as its policies would dictate.Politically, it was also a bad idea because, when the whole thing started going wrong, the blame would be on the state and thereby on the minister.Frans Cronje (03:00.814)Whereas, had the private sector been told, "This is how it should have been done. We need your help. Procure anything that is regulated and legitimate," then, had it not happened, politically you could have said, "It wasn't me. I told you guys to go and sort it out, and you didn't."I therefore think Jordan Hill-Lewis was correct in the decision to remove him.As so often, we thought of Thabo Mbeki in a similar way. Mbeki presides over this immense economic recovery. Growth goes to 5%, the first budget surpluses since the formation of the Union, and the ANC reaches its record - almost 70% of the vote in 2004.At the same time, he's laying the seeds of his own destruction.So, yes, it's a great pity. I think it's a sad tragedy how it ended, with such nastiness and so on. You wonder how it might have been avoided, but I suppose now it is what it is.Alec Hogg (04:23.794)But his decision to do what he did - to alienate a lot of Afrikaners who voted for the DA by calling them "Afri-MAGA" - I just can't understand how somebody in full control of his faculties would make such a bad decision.Surely, at the very least, you would ask somebody whether that's a good thing or not.Frans Cronje (04:52.758)Yes, I know, Alec.This is the tragedy of the thing. The pressure on a person in this situation is absolutely immense. I'm not trying to excuse it, but what happens to you -and I think also the scale of it - the DA was, in many respects, a dog that caught the car. Suddenly you were there.Suddenly you're on this global stage and you're under pressures and influences that you might never previously have imagined existed. I think that's harsh on anyone.I'm reminded of Enoch Powell, who was actually a very great British MP, but is remembered in the wrong way because of one speech, when he'd actually done many other things in his life.Powell said that all political careers end in failure or disgrace.You can be critical of politicians - and it's necessary - but I've encountered some, and the fact that many of them dedicate their lives to it at all... it's like nothing else. The nastiness, the pressure - there's nothing else quite like it.It's a pity about the MAGA stuff because that was wrong.Who are these people being called MAGA? Sakeliga, AfriForum, Solidarity and the like."MAGA" is suggested as a slur - as some nasty right-wing American thing.Frans Cronje (06:56.574)MAGA in America is trying to draw Afrikaners to America and persuade them to leave South Africa. They have their own political reasons for doing that.But AfriForum and Solidarity are doing exactly the opposite. They are trying very hard to create circumstances that mean there will be a sustainable future for Afrikaners in South Africa.So the idea that there's common cause amongst them is simply false.I don't mind saying this because the MAGA issue has now gone so far that it needs to be said.What's called MAGA here is actually unhappy with MAGA in America because it recognises that it threatens the idea of a sustainable future for Afrikaners in South Africa.The local variant is trying to achieve something that's actually at odds with what some people in Washington are trying to do.Alec Hogg (08:18.042)Quite extraordinary, Frans.But when you unpack the argument that John Steenhuisen had to have done something, I actually asked William Saunderson-Meyer in an interview earlier this week whether John was dim. He knows him far better than I do, and I wouldn't imagine that he was, given what he's achieved.William came back and said:"No, this was a ransom note."He was threatening the DA and saying to them, "Unless you give me an off-ramp, I will continue doing these kinds of things."Do you think that's a possibility? Is it possible that was what was in Steenhuisen's head?Frans Cronje (09:05.550)I don't know what was in his head. I wouldn't speculate on that.I'd simply say what I have said, which I've done carefully: that it was extremely good right at the start, and that the pressures and the like later became overwhelming, the wrong decisions were taken, and now it's ended as bitterly as it has.Maybe, in the fullness of time, people will better understand exactly what occurred there and why it occurred.But it's a great pity. His contribution must also be remembered for that early part. If you weigh it in the balance, both parts must be counted. And the early part was, you know, not likely something that saved the country.Anyway.Alec Hogg (10:14.194)Franz, you know these guys much better than I do. I'm much more on the business side.How does he keep an important job like Deputy Minister of Trade, Industry and Competition when he's tried his best, it appears, to implode - or pull down the temple on the DA, like Samson?Frans Cronje (10:34.772)I don't actually know people as well as people sometimes think I might.Sometimes the DA gets cross with me, which I understand too. It's easy to do what I do, relatively speaking, and say, "You did this right, you did this wrong." They're in the arena.So sometimes I do get a bit fed up.I don't actually know the answer. I'm not close enough, Alec, to be able to tell you whatever the personal things were that might have gone on.One hears things, but you try and focus on the hard economic and related issues, and leave the soap opera in the background.Alec Hogg (11:23.282)The scuttlebutt and all the rest.What impact will it have on the DA, though? Because, running up to that interview, it did appear as though the DA had a pretty good shot going into November's elections.Is it going to hurt them?Frans Cronje (11:35.374)Look, he took the DA up to these highs.That actually puts pressure on his successor now, because he took it to very high numbers.Frans Cronje (11:49.294)The best way to think about the answer to your question is to step back a little.What is going on in the country at the moment?South Africa is going through a period of regime change - in the nicest sense, not in a pejorative sense.Regime change is a two-step process, and step one is always the same. It doesn't matter where in the world.Step one is that society loses confidence. It loses the belief that the old regime can protect its interests.That has substantively occurred with the ANC. People have lost confidence. Hence it's at 40%, or wherever it is now.But there's step two.People must come to believe that the new regime will protect their interests.That was very much the DA's challenge.Because step one has happened and step two hasn't happened to the same extent, we sit in this no-man's-land where the ANC has, let's say, 40%, and the DA has, let's say, 25%.The only way we're going to get away from that - if we do, and we might not - is either for the ANC to redevelop the belief that it once commanded, or for the DA to do that.For the DA to do that, it has to demonstrate that, in government, it is very effective - much more so than the ANC has been.That hasn't been clear in Cabinet.John's own performance as a minister wasn't good. People were frustrated with him, and this foot-and-mouth disease issue was badly handled.In the Education Ministry, for another example, you've got a DA minister and it's not good what's going on there. It's a mess.You could argue it's making education worse than it was before, which is staggering to think could even be possible.Then you get...Frans Cronje (14:08.194)...an example like the Communications Minister, who's trying, sort of trapped between things to a certain extent.You get the Macpherson chap, who's doing quite well in some respects in fighting off corruption in government buildings.You get Leon Schreiber at Home Affairs. Yes, there's progress - but visit a Home Affairs office.Frans Cronje (14:38)Someone I know recently did. Oh boy.The thing is, if you're the ANC now, you know you can't reform with your current leader. I mean reform in the sense of getting growth back, because the chap's not a reformer. And you're losing support to the DA. So one of your options is to stop losing support. You can either do that by making yourself better or by making the DA look as bad as you.Alec Hogg (15:10)Mm-hmm.Frans Cronje (15:15)The challenge the DA therefore faces now, given the numbers and where John Steenhuisen had them going, is to demonstrate that it can govern better. And that hasn't been demonstrated - not at the scale needed to move the political dial to the extent the DA would like.So we're stuck in this middle ground. A point I've made to the DA is that they're not really competing only with the ANC anymore. They're actually competing with something else: the enclave future, where South Africans who get fed up with politicians - just as politicians sometimes get fed up with analysts - think, "You know what? All the politicians are more or less useless, some more than others, some less. We're just going to get on with it ourselves."They'll install their own solar panels, buy their own water tanks, join neighbourhood watches, and take responsibility for their own communities. If the DA cannot demonstrate that it governs significantly better than the ANC, then that's where the country will go: towards greater self-reliance in communities.I think that's already happening to a significant degree.That competitor is perhaps a greater challenge for the DA than the ANC itself.Alec Hogg (17:04)It's a very interesting point, and one you've articulated over many years. Even financial advisers like Magnus Heystek have picked up on it, saying that's where people should be putting their money - into these enclaves.But talking about enclaves, what about Helen Zille? What's your reading of her chances of taking Johannesburg? It's almost as though Herman Mashaba is feeling his oats at the moment. He gave a very strong interview with Chris Steyn yesterday and seems to believe ActionSA is going to do very well.Of course, the animosity between him and Zille suggests it might not be easy for the two of them to work together. How's Helen doing? What's your feedback?Frans Cronje (17:51)It's very interesting, Alec. We asked voters whether they liked the idea of Helen Zille being the Mayor of Johannesburg, and about two-thirds said yes.But when we asked who they were actually going to vote for, she was on around 40%. So there's this gap.How do you explain it?I think the explanation lies in the regime change theory. To get someone to support you, you have to instil the belief that, if they do, their circumstances will improve and their interests will be safeguarded.That gap, which leaves her well short of a majority in Johannesburg, largely arises because that belief hasn't yet been sufficiently established.The last figure I saw was about 40%, and there's still a long time to go. It could still become 50%. Lots of things can happen.But it's not clear that the DA has a willing coalition partner in the city.I've said this to your viewers before: South Africa works best, for the time being, as an ANC-DA coalition. The DA brings the established middle class, while the ANC brings the aspirant middle class. Because their interests are aligned - and because the rural poor live vicariously through the aspirant middle class - you effectively have everyone represented in the coalition.But in Johannesburg, the DA doesn't really have that option because the Gauteng and Johannesburg ANC structures are effectively rebel outposts that refuse to participate in the national GNU.The Freedom Front Plus will probably do better in Johannesburg than before, but not well enough to close the gap. The DA and the Freedom Front have their own issues with each other.Between Herman Mashaba, ActionSA, the Freedom Front Plus and perhaps one or two smaller parties, you might get there. But then you've got a very fragile coalition.I like trying to see the upside in things, but I find it difficult to believe that such a coalition would work in Johannesburg.The DA also has to weigh this carefully because, if it wins Johannesburg and Helen Zille becomes mayor, the city becomes the colosseum. This is where the DA's ability to govern will be demonstrated to the entire country.If the result is uninspiring - let alone a mess - that puts paid to the DA's growth prospects, and we become an enclave country.I imagine the DA would prefer to win Johannesburg outright, with a clear majority, so that it has executive control and can implement the right decisions.I think, if it had that executive control, it would make the right decisions. Those decisions would make Johannesburg a much better place to live and position the DA strongly for the 2029 election.But I haven't yet seen polling that puts them over the line.Alec Hogg (21:24)Yeah. And you were the first person to talk about the brilliance of that option, if it were to work out. I recall there was a lot of enthusiasm and excitement about it at the time.But if you take the Charlie Munger "invert" approach and look at what's likely to stop the DA from winning - or the ANC from retaining power - right now you've got Johannesburg residents no longer having their rubbish collected because contractors aren't being paid. Treasury said this morning it's cutting off Johannesburg's water. That's got to be hurting those in power.On the other hand, would the Steenhuisen factor hurt Helen Zille to a similar degree?Frans Cronje (22:14)Yes, I think it would.To the extent that this whole saga suggests the DA spends its time fighting with itself, I don't think anything irritates voters more than that - particularly Johannesburg voters who already have to deal with regular water and electricity outages.Then you combine that with the perception that the DA hasn't been as effective in government as many had hoped. Sometimes it's difficult to see a clear distinction between the DA and the ANC in government.That hurts further.And now there are these allegations around Tony Leon, which, as far as I can understand them, are quite absurd. I'd like to say something about that later if I could.The damage to the DA's growth prospects, I would say, is considerable.If you wanted to create an equivalence between the DA and the ANC, you'd first want to create the impression that the DA is racked with infighting and cares more about itself than its voters. Well, now we have infighting.Then you'd want to create the impression that the DA isn't particularly effective in government. We have examples of that too.Finally, you'd want people to believe the DA is corrupt and engages in state capture. Lo and behold, a week ago that narrative arrives. Even Mr Ramaphosa, as I understand it, suggested something along those lines regarding Tony Leon.The attacks on Tony Leon are really a proxy attack on the DA. It's clever because it leaves the DA uncertain about how to defend itself. The attacks are aimed at Tony Leon, but in the public mind the distinction between him and the party becomes less important.I think that's the intention.If anyone were trying to create an equivalence between the two parties, they're doing a very good job of achieving exactly that.In another era - before the Berlin Wall came down and when politics worked differently - you probably would have earned a medal for something like this.Alec Hogg (24:50)Tony Leon?Frans Cronje (24:52)Tony Leon, unless there's something I don't know - which is very unlikely - is one of the most decent, honourable and upstanding people I know.I don't know much about his business, Resolve Communications, except that my impression - and the impression I've received from others I've asked - is entirely consistent.A young journalist phoned me recently and asked whether I would comment on the allegations against Tony Leon and his firm.I asked what the allegations actually were.The journalist said Tony Leon had used his political influence to arrange meetings with Cabinet ministers.I replied that this sounded perfectly normal.His business advises investors on how to engage with government, and advises government on engaging with investors. That's a perfectly legitimate business.The journalist then asked where I would draw the line between legitimate lobbying and something improper.I said it's obvious.If he'd committed a crime - for example, if he'd said, "Give me money and I'll get this decision made," or accepted a kickback - that's clearly wrong.What has happened to the world that we've forgotten the difference between right and wrong?If you've committed a crime, you should be prosecuted.I then asked the journalist why so much of the media was writing about Tony Leon as though he'd committed state capture, when there are countless examples of genuine criminal attempts to influence ministers.State capture wasn't the Gupta family merely offering advice to ministers.Frans Cronje (27:07)State capture was the Gupta family bribing ministers.There's a fundamental difference.Another allegation was that Tony Leon had drafted parliamentary questions for an MP.Well, the Institute of Race Relations used to draft questions for Helen Suzman in Parliament. That's perfectly normal.If you're an expert on a subject, you suggest questions that can be put to a minister or to the President. The politician isn't obliged to use them.That's normal democratic practice.Then people complain that ministers were put under pressure.Well, I hope they were put under pressure by investors.In fact, had they been under greater pressure, the economy might have been growing at more than 1%.We recently wrote an editorial asking where people think ministers get their ideas from.Do they imagine ideas descend from heaven untouched by human influence?Of course not.Ideas emerge through debate, through the contest of ideas.Activists promote ideas. Journalists promote ideas.When private investors want to advance ideas, they often hire lobbying firms because those firms understand government and can explain how to engage constructively.You can't simply arrive in a country you don't understand and start telling ministers what to do.You consult someone like Tony Leon, who can explain how the politics works, what the internal pressures are, what issues ministers are sensitive about, and how best to present your case.I think that's valuable.It's an important professional conduit between private investors and the state.And I would imagine that someone like Tony Leon would place the country's best interests at the centre of that work.As far as I'm concerned, it's absolutely disgraceful that suggestions to the contrary are being made without any evidence of criminal conduct - or even serious ethical misconduct.No such evidence has been presented.Alec Hogg (30:11)That brings us back to Steenhuisen's allegations.What motivated him? Was it simply an emotional reaction from a politician determined to strike back? Or was he encouraged by someone else? Was he naïve?Those are the obvious questions.I hear what you're saying about Tony Leon and, if you're right, you have to ask where the instigation came from.Frans Cronje (30:41)I'm a little out of my depth here because I don't know much about Tony's firm.I do know something about the campaign Mr Steenhuisen referred to.As I understand it - and I'm happy to be corrected - a group of investors and business people, who were suffering catastrophic losses because of the government's vaccine policy, approached Tony's firm for help in engaging with the minister.That's what happened.And I think that's exactly the correct way to do it.Take another example: if you're a coal miner, you're an expert at mining coal, not at engaging Cabinet ministers.So you hire professionals who understand how government works and who can help you present your case appropriately.It's exactly the same principle.And remember, John Steenhuisen ultimately lost his position because that vaccine response was, in my view, fundamentally misguided.Do things come together?I imagine they do.Alec Hogg (32:20)Are you still positive? Is this part of the maturing process of our democracy - what we're seeing and going through now?Frans Cronje (32:29)Yes. I mean, look, we've just published a new set of scenarios for South Africa in 2034.What do they say?We believe the most likely outcome is that no single party will win an outright majority again, based on the evidence as we currently read it. Instead, South Africa will increasingly become an enclave society.In the relative order of things, that's actually a positive outcome because it means we'll retain much of our capital base, skills base, entrepreneurial base and employment base - certainly far more than many other post-colonial societies that experienced political and economic decline.Within those enclaves, we estimate that around 15% of the population will maintain a standard of living comparable to that found in the more comfortable parts of the Western middle class. Those enclaves themselves could sustain economic growth of 3%, 4% or even 5% and, taken together, could represent one of the world's most attractive emerging markets over the next two decades.I'm fairly confident about that.The fact that we'll retain most of our middle class - and that it may continue growing and prospering within South Africa - is extremely important.It buys us time.Even if we don't sort out the politics for another five or ten years, we won't reach the point where the country's capital and skills base are permanently lost. If that were to happen, you'd eventually need to repatriate a diaspora, and that's extraordinarily difficult.That's our central scenario.We also have an upside scenario.If Patrice Motsepe is chosen as the ANC's next leader, I think there's a significant opportunity.I watched comments he made to a French journalist a few nights ago. It didn't sound to me as though he ruled himself out. He walked a very careful line between confirming and denying any ambition to lead. He could easily have said yes or no, but he didn't.I'm fairly confident there's a project around him that, if it makes it through the ANC conference, will proceed.That could take South Africa back to growth of around 2.5% to 3% relatively quickly because only a handful of policy decisions would be required. It's actually the easiest path available.It could also return the ANC to around 50% electoral support.Between the enclave scenario and the Motsepe scenario, we've allocated well over 80% of the probabilities.We also have a downside scenario - about a 15% probability - where the governing coalition shifts sharply towards left-wing populism, the state becomes more effective at implementing economically damaging policies, and South Africa finds itself in serious difficulty.But if you ask where we think we are today, based on the evidence, this is what we tell our serious clients - people investing substantial amounts of money.We take that responsibility extremely seriously.If our advice were to take your money and leave South Africa, that's exactly what we'd tell them to do.Instead, what we're saying is that, on roughly an 80% probability, between the enclave scenario and the upside scenario - though weighted more towards the enclave outcome - South Africa presents a very interesting and, in many respects, exciting emerging market opportunity for the right kinds of companies and for the middle class.Their continued presence will effectively cross-subsidise the rest of society and help prevent South Africa from falling over the kind of economic precipice experienced by other post-colonial emerging markets that got into serious trouble.So yes, Alec - empirically, we think South Africa is not in a bad place.Alec Hogg (36:44)Dr Franz Cronje, it's always a pleasure talking to you.As you say, through The Daily Friend and the work you do, you help make sense of South Africa for your readers. And every time we have the opportunity to talk together, you do exactly the same for our audience.We look forward to having you back on Business TV again soon. I know you're a busy man, but hopefully we can keep these conversations going.Frans Cronje (37:07)Any time. You guys are absolutely awesome, and it's always great to be here.Alec Hogg (37:16)As always, thank you to Dr Frans Cronje.I'm Alec Hogg for BizNews.Frans Cronje (37:21)Thanks, Alec.

Director's Cut: Dr Frans Cronje - Why the DA's biggest threat isn't the ANC

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