Ramaphosa's US visit exposes ANC's struggles and calls for economic reform

Key topics:ANC faces critical moment after Ramaphosa's meeting with TrumpRace-based hiring and property rights erode public, economic trustMost South Africans support merit, secure rights, and growth policies.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.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Hermann Pretorius.Yesterday was a discomfiting moment for President Ramaphosa and the ANC..This could be a pivotal juncture for the party, a shock into recovery – or what will be remembered as the historic death knell of a once-formidable organisation, doomed to die before our eyes.The latter is certainly the more likely course, given the state of the ANC as an institution. Yet, it remains possible – stranger things have happened – that the day Ramaphosa went to Washington might in time to come be recognised as the start of an unlikely historic political recovery.South Africa’s national relationship with the United States is one of immense importance – not merely on the grounds of trade or commerce, but because of the enormous impact that Washington’s view has on South Africa’s global economic and market perceptions. The South African economy is particularly vulnerable to sentiment, positive or negative, due to structural weaknesses, negligible growth, and socio-economic stagnation.The escalation of engagements that led to yesterday’s historic meeting could be seen as having been triggered by the Executive Order of 7 February 2025, in which President Trump drew attention to the state of property rights in South Africa, racial discrimination, and the perceived anti-US posture of the South African government in international affairs.Since then, we have seen a multitude of narratives seeking to define the South African socio-economic reality. Much of the discourse, in the United States and in South Africa, has rested on popular and often misleading partial truths. Lost in all the noise has been the urgent priority of getting the South African economy growing again. For this to happen, urgent policy changes, some raised by President Trump in yesterday’s meeting, are necessary.On the issue of racial discrimination, there can be little serious contestation that South African law does not treat people of differing races equally. Only recently, the Minister of Employment and Labour, Nomakhosazana Meth, published sweeping sectoral “employment equity” targets requiring the reconstruction of the national labour force to meet race and sex targets. The stated objective of these regulations, an intensification of pre-existing targets, is to make economic sectors representative of national race and sex demographics.Objectively, this is the aggressive enforcement of government racial preferencing and a clear form of legally codified racial discrimination. Ironically, the current legal framework for racial preferencing copies almost exactly the racial categorisation of the now-repealed Population Registration Act of 1950, the cornerstone law of the entire apartheid system.What has often been overlooked in the debate on race-based policies is their universally negative impact. Obviously, these laws discriminate against white South Africans, but that is only one part of their unjust socio-economic impact.Race- and sex-based targets have already led to cases of black women, for example, being denied opportunities because their demographic category had already been satisfied. In one notable instance, a black female lawyer was denied election to a professional representative body, despite receiving more votes than her white peer who was successfully elected.Results of polling by the Institute of Race Relations (IRR) published just this week show that this sort of demographic discrimination is not supported by South African voters. For example, a large majority of 84% support merit-based appointments to all jobs. This figure combines those who favour merit-only appointments (30.5%) and those who favour merit-based appointments with special training for people from previously disadvantaged groups (53.5%).”When broken down by party, the data show, not even the ANC, the party that enjoyed a majority governing mandate from 1994 to 2024 and implemented these laws and policies, can boast majority support for race-based hiring. In fact, 73% of ANC supporters endorse merit-based hiring practices in direct rejection of the party’s racial preferencing policies.This is clearly an area of policy in need of urgent pro-growth reform. The broad public support for non-racial, merit-based hiring practices offers more than sufficient political scope for rapid change, and we hope that yesterday’s events add to the momentum for such change..Unduly skewed.Regarding property rights, the debate has been unduly skewed by a focus on so-called ‘white-owned’ farmland. The reality is that no particular racial group can expect to be exempted from the negative consequences of the ANC’s long-standing ideological antagonism to private property rights.Since at least the passage of the National Water Act in 1998, followed by the Mineral and Petroleum Resources Development Act in 2002, the ANC’s policy in government has been to have increasingly important economic asset ownership vested in the state. To this end, farm land has been subject to litigation − somewhat ironically, in a signal instance, the farmer in question was a black farmer, David Rakgase. Rakgase had to endure a legal battle of nearly two decades to be allowed to purchase land he’d been farming since 1991.Rakgase was offered the opportunity to purchase the land under the Land Redistribution for Agricultural Development (LRAD) programme. He accepted and a purchase agreement was settled between him and the ANC government. However, the government then reneged on the contract, offering instead a long-term lease of the property after which he might again seek to purchase the property. Being already an elderly man, his was clearly an attempt to deny Rakgase any chance to own the property. This was decried by the Gauteng North High Court in Pretoria as “callousness and cynicism”.Rakgase ultimately won the case, but what was revealed about the ANC’s position on private ownership of property was chilling.Other laws further restrict the ability of poorer black South Africans to use property as a collateral financing asset, yet the most blatant undermining of property rights comes from the recently signed, and unpopular, Expropriation Act. The most recent IRR polling finds that 68.1% of registered voters in South Africa oppose the Act.As much as the law contains the objective of race-based land reform to alter land ownership patterns along racial lines, it contains no exemption from expropriation for black property owners. In fact, it takes such a broad definition of property that all property owned within South Africa – not just land − is, under the Act, legally vulnerable to expropriation below market value.As secure property rights − the ability to earn and own assets – is a cornerstone of economic activity and participation, it is inconceivable that critical economic growth and fixed capital investment in South Africa can improve without far-reaching taming of the various laws that undermine secure property and devalue assets.South Africa is not a country crippled by racial antagonism. In fact, quite the opposite. Polling by the IRR over the last decade or so has shown positive attitudes towards other races across the board, with data from September/October 2024 showing that 63% of South Africans report not having had any personal experience of racism over the preceding five years.We believe the positive fundamentals of sound race relations are likely to remain in place for a very long time. Yet, we cannot ignore that the politicisation of some racial tensions, like the singling out of Afrikaners as uniquely exposed to South Africa’s socio-economic hardships, are not constructive. However, these flare-ups of tension are to be expected, perhaps even increasingly so if socio-economic pressures mount under the weight of policy failures..Grain of hope.In the spectacle of yesterday’s Oval Office meeting, despite the discomfiting ability of Donald Trump to wrongfoot his interlocutors, opponents, and even allies, there might be a grain of hope for the ANC.The glare of the Trumpian spotlight might be a wake-up call to President Ramaphosa and his party. Historical voting patterns show that the ANC does well when the South African economy does well. What South Africans ultimately desire, as evidenced by newly published IRR polling, is job creation and government duly focused on taming the beast of unemployment. The only route to meeting this national demand is through economic growth.As IRR CEO John Endres said in a comment to American media last night:“It is now for the ANC in the GNU to decide what to make of the discomfiting attention of the Trump Administration. Will the spotlight shining on South Africa show the world an ANC willing to do introspection on why South Africans deserted it? Will the ANC rediscover the pragmatism that saw it succeed in its first decade in office? Will it listen to the people of South Africa as they demand economic growth, jobs, merit-based hiring, non-racialism, secure property rights, and economic pragmatism?“Or will the spotlight show an ANC at a loss – a failing, unpopular, lame-duck emperor with no clothes?”.*Hermann Pretorius studied law and opera before entering politics and, latterly, joining the IRR as an analyst..*This article was originally published by the DailyFriend and has been republished with permission

Ramaphosa's US visit exposes ANC's struggles and calls for economic reform

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