🔒 Moeletsi Mbeki tears into BEE, ANC economic policy

Moeletsi Mbeki is not scared to speak out against the policies of the party that his father Govan Mbeki built with Nelson Mandela and that his brother Thabo represented as President of the country. He has called the ANC and EFF policies of land expropriation without compensation an attack on the white population and  Julius Malema, “a famous black racist”. As the Deputy Chair of the South African Institute for International Affairs, Mbeki has conducted research on the effect of white nationalism in the apartheid era and black nationalism since 1994 and concluded that both have failed South Africa. In an interview with Biznews on the deployment of troops in the Cape Flats to deal with gang violence, he slammed the ANC’s economic policies saying it has led to de-industrialisation in the Western Cape and black empowerment is deterring investment. – Linda van  Tilburg

Political economist and commentator, Moeletsi Mbeki says investors know that they have to donate 26% of their capital to “some stranger who does nothing to fight for your company” if they want to invest in South Africa. Mbeki says investors won’t invest under those circumstances.

He says as the owner of a black company, he spends a huge amount of money on the so-called verifying agencies in an effort to comply with BEE rules; it does not only affect white-owned companies. “It’s basically like having two auditors. I have a normal auditor and I have a second auditor which does a BEE audit, which takes up a huge amount of management time and it takes a huge amount of money because these things cost a lot of money. He says it not only affects the big companies, it affects small companies and foreign investors.

Mbeki says black empowerment, or BEE, is therefore a huge impediment to growth, but the ANC would not get rid of the policy as it benefits the ANC leadership; they are the beneficiaries of it. “Our challenge in South Africa is how do we promote real political competition so there are different solutions… to make a difference to the economies of Africa rather than the policies we have at the moment which drive the stagnation of the economy.”

Mbeki says President Ramaphosa is not the big saviour that the business community thinks he might be. “The reality is that he is the President of the ANC, which is the ruling party and the ANC has programmes and manifestos and strategies, he is not acting along. He is part of an institution.” Mbeki cautions the business community not to think of Ramaphosa as the Messiah who will come and save them… there is no such saviour.”

He says solving the country’s economic problem does not depend on Ramaphosa or Jacob Zuma that came before him. The ANC has been pursuing a policy, which is to drive up private consumption, especially the private consumption of the black middle class in the country. “That is the core of the ANC policy… it is done at the expense of productive investment in the economy.” It has been the ANC’s policy for the past 20 years, he says.

Mbeki says South Africa should be driving up investment not consumption because the country has such a massive unemployment population. Investment is needed to bring the unemployed into production.

Mbeki is particularly worried about the consumption of imports. He cites the example of a recent food processing company he visited that supplies one of the country’s large retailers and learnt that they were importing chicken breasts from Brazil. He says it is a result of the ANC’s economic policies. He says it did not change under Jacob Zuma and it has also not changed under Ramaphosa. Mbeki says people are behaving as if “Ramaphosa has just arrived yesterday”; he was deputy-president for five years to Jacob Zuma and has been in power for more than a year. “What is stopping him from waving his magic wand?” He says the major impediment remains the ANC’s economic policy that is driving the consumption of the black middle class and it has also created a huge civil service.

Mbeki says the ANC sees these policies as a winning formula, because they got re-elected in May on the basis of dubious policies notwithstanding that the country has unemployment of 40%. He says the ANC’s solution to unemployment is social grants, so they are again taking resources from the production side of the economy and paying social welfare. “They think the poor are going to vote for them and they do.” But the sum total of these policies is the stagnation of the economy and  massive levels of poverty and unemployment.

Referring to the decision by Ramaphosa to send troops into the Cape Flats, Mbeki says he believes it will serve no purpose. Mbeki asks what the Defence force is actually going to do there, “attack the poor communities?”. “The government thinking is that we use force to deal with the poor where they are inconveniencing us or where they are causing trouble.” He says the root of the problem on the Cape Flats is the de-industrialisation of the Western Cape.

Mbeki says the challenge that Cape Town and the Western Cape is facing is a huge loss of industries in that part of the country especially the textile, clothing and footwear industries. It has impoverished a big part of the working population of Cape Town and has resulted in a whole lot of malaise and ills. It has led to the growth of drug distribution and consumption and the crime that goes with it. He says you cannot show force to poor communities; it may give them a sense that their problems are being dealt with, but what the government should be dealing with is the de-industrialisation of the Western Cape.

In the case of the Western Cape, Mbeki says the government’s visa policies has been detrimental to tourism, which is a major source of income in the province. It has created a visa regime that has deterred tourism to the country and has subsequently resulted in job losses. He says this visa regime is still in place despite the tinkering on the margins of it.

Mbeki says apart from the lack of industrialisation; the Government should also deal with the issue of drugs. He says the LSE released a report last year showing that Frelimo, the ruling party in Mozambique deliberately opened the country to the import of heroine to be distributed in South Africa as a source of finance. This is another factor affecting the poor population in South Africa. These issues should be addressed he said.

What is needed in the country is political opposition as the main political opposition parties in South Africa has what he called, ‘ANC-lite policies’, whereby the DA and EFF are reproducing ANC policies. “They are saying we are going to implement the ANC policies better than the ANC.” Mbeki says the challenge in South Africa is, how do we promote real political competition so there are different solutions. He says other solutions have to be put on the table that have to make to a difference to the economy of South Africa rather than the present policies which are driving the stagnation of the economy of South Africa.