RW Johnson – SA’s parlous finances, ANC’s patronage network on collision course

Political scientist and long-time Oxford University scholar RW Johnson applies his mind to the key factors influencing South Africa's immediate economic and political future. Cutting State spending is the obvious and urgent fix but enacting it will require backbone thus far absent from the ANC. Johnson also explains the European "toddler management" strategy with Donald Trump – and why Pretoria's total misreading of geopolitics is costing the country dearly. He spoke to BizNews editor Alec Hogg..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter ___STEADY_PAYWALL___.South Africa is at a pivotal moment. The nation's economic and political landscape is shifting dramatically, and few voices provide as sharp an analysis as R.W. Johnson, one of BizNews' most insightful columnists. In a recent conversation with Alec Hogg, Johnson tackled pressing issues—from South Africa's budget crisis and ANC's declining support to the implications of a second Donald Trump presidency..The budget crisis: A sign of ANC's diminishing control.For the first time in history, South Africa's national budget was postponed—an unprecedented move that raised alarm bells about the government's economic stability. Johnson, however, saw the bigger issue not as the delay itself, but the unsustainable choices facing the government: tax increases, spending cuts, or further debt..For over a decade, the ANC has relied on raising taxes and accumulating debt. However, Johnson expressed some optimism that spending cuts are finally being considered—though he doubts the ruling party's ability to implement them effectively. The ANC's governance model, built on patronage and cadre deployment, makes it politically difficult to cut government spending without upsetting key power bases..Read more: BN Briefing: ANC support plummets in latest SRF poll; Mulder elected FF+ leader; German elections.Johnson pointed out glaring inefficiencies, such as South Africa maintaining the second-highest number of embassies in the world—many of which function as comfortable retirement positions for ANC veterans rather than serving strategic interests. Closing at least half of them, he argued, would have no negative impact on ordinary South Africans but would significantly cut costs..Another major expenditure is the bloated public sector. The ANC's alliance with trade unions has resulted in inflation-busting salary increases for government employees. Despite a so-called amicable agreement, public sector workers continue to receive salary increases well above what is fiscally responsible. Johnson highlighted that these pay hikes contribute to the country's growing deficit without delivering real benefits to the broader economy..ANC's declining popularity: A moment of reckoning?.A new poll from the Social Research Foundation has placed the ANC at just 32% of committed voters—down from 46% in September. This is a seismic shift. Johnson described the situation as one of 'tremendous fluidity,' with a growing number of voters unsure of where to place their support..Perhaps most tellingly, if Cyril Ramaphosa were to step down as leader, ANC support could drop even further—to around 21%. None of his potential replacements—Paul Mashatile, Fikile Mbalula, or Panyaza Lesufi—appear to have any significant public following..Interestingly, Johnson pointed out that this decline in ANC support is not translating into major gains for opposition parties. Both the MK Party and the EFF have seen their support decrease, while the DA has made only marginal gains. This suggests that many South Africans are either undecided or have lost faith in the political system altogether..The IMF, the debt trap, and the ANC's worst fear.With the national debt escalating, the question arises: where will the ANC turn for financial relief? Johnson noted that the government recently took a $4 billion, low-interest IMF loan, but the real concern is a full IMF bailout. Such a scenario would be disastrous for the ANC because it would come with stringent conditions—likely requiring the dismantling of much of the party's economic policies and patronage networks..Even an IMF bailout is not guaranteed. Johnson highlighted a little-known but crucial fact: any major IMF decision requires an 85% approval vote, and the U.S.—which holds a 17% voting share—has veto power. If Trump were to return to the White House, he could block any such bailout, leaving South Africa with few options..The Donald Trump factor: What it means for South Africa.Johnson's recent column on Trump delves into the unpredictable consequences of a second term. He describes Trump as a 'big child' with a short attention span, who prefers Fox News soundbites over intelligence briefings. Yet, his impulsive decisions could have real consequences for South Africa..Read more: Rob Hersov – Budget debacle more proof SA needs business-type turnaround. Urgently..With Trump openly aligning with Russia, South Africa finds itself in an awkward position. The ANC's ideological admiration for Vladimir Putin now clashes with their deep disdain for Trump. Johnson speculated that if South Africa wants to avoid economic retaliation, it may have to make a dramatic concession—such as dropping its International Court of Justice case against Israel. Simply offering diplomatic explanations will not be enough to appease a leader like Trump..China's role: Will Beijing bail out South Africa?.Many speculate that China could step in as South Africa's financial savior. Johnson is skeptical. While China may want strategic assets—such as a key Indian Ocean port—it has shown no interest in bailing out badly managed economies. Unlike the IMF, which provides loans for economic stabilization, China's approach is transactional. Without a clear benefit to Beijing, Johnson doubts China will extend substantial financial assistance to South Africa..What lies ahead? The key flags to watch.As the country moves forward, Johnson identified several key indicators that will shape South Africa's future:.The National Budget (February 2025): Will the government finally implement spending cuts, or will it continue down the dangerous path of debt accumulation?The DA's Position: If the DA remains firm in opposing tax increases and demands growth-oriented policies, it could play a crucial role in stabilizing the economy.Foreign Policy Adjustments: Will South Africa make any strategic policy shifts to improve relations with the U.S., or will it double down on its current course, risking further economic isolation?China's Role: Will Beijing see strategic value in deeper financial involvement with South Africa, or will it remain on the sidelines?.Final thoughts.R.W. Johnson's analysis paints a picture of a country at a crossroads. With the ANC losing ground, economic instability rising, and global geopolitics shifting, South Africa must make critical decisions. If the government continues its current trajectory, the country faces a bleak financial future. However, if bold reforms are introduced, there may still be hope for economic recovery and political renewal..Read also:.TRIBE VIBE: McKenzie talks GNU's future and political unityRW Johnson: The megalomania, myths, and global disruptions of wannabe king Donald Trump DA warns of poverty 'wasteland' without urgent economic reforms, spending cuts

RW Johnson – SA’s parlous finances, ANC’s patronage network on collision course

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