The world is changing fast and to keep up you need local knowledge with global context.
Despite facing daunting challenges and comparisons to Zimbabwe’s plight, South Africa stands resilient, with a coalition of smaller parties driving positive change. From renewable energy innovations to empowering the entrepreneurial spirit, Sean McLaughlin believes the nation is on the cusp of a prosperous future. Critics are confounded as South Africa defies the odds, charting its course towards a brighter tomorrow.
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.
The Long Walk to Prosperity
By Sean McLaughlin*
A creative view on how South Africa may yet again confound the critics and not go the way of Zimbabwe.
“There is a widespread political will to make the country work,” remarks a hotelier as he details his plans for expansion and shows me an in-progress bore hole for a second swimming pool. “Opportunities here are vast… for those who know where to look,” he adds.
What a contrast to the doom-mongering headlines on South Africa. Zimbabwe-esque comparisons of the country’s downfall are tempting. But this country has an answer for every setback.
I am going to stick my neck out and say South Africa will not go the way of Zimbabwe. South Africa is a far cry from its northern neighbour breadbasket turned basket-case turned dictatorship. South Africa currently ranks 7.05/10 on the Economist Intelligence Unit’s Democracy Index. Zimbabwe ranks 2.92.
That South Africa is in a worse state now than it was in 1994 is undeniable. But Apartheid was a false starting point. The current slump is very, very early in the life of the young democracy. It should be seen as a twist in what I take the liberty to call the “Long Walk to Prosperity”.
Africa expert Richard Dowden states that the South African story carried the hopes of the human race in 1994. Perhaps the expectation that political freedom would quickly translate into economic opportunity was simply too much.
The prosperous future South Africa was set for in 1994 did not materialise. Instead, we hear of failing state enterprises, blackouts, violent crime, and the global top spot for economic inequality. This is a tragedy.
Responsibility for this unnecessary hardship rests squarely with the governing African National Congress (ANC). Complacent, their failure to deliver for ordinary South Africans may have them unseated in next year’s national election. This is new territory.
The pessimists fear the bad situation may get worse, with the ANC having to team up with the hot-headed, land-grabbing Economic Freedom Fighters (EFF).
Conversely, the optimists say a coalition of smaller parties will form a government and put things right. Strong institutions will resist backsliding into chaos. South Africa will once again become a beacon of hope. Scholar David Roberts is correct in that the definition of democracy must include economic opportunity.
The Long Walk to Prosperity. Realistic creativity on re-imaging South African fortunes. South Africa 3.0.
It is 2040. South Africa is prospering, again. How did events unfold?
It was 2029 when the ANC was finally unseated, not 2024.
Political analyst Frans Cronje correctly predicted in 2023 that the ANC would in fact hang on until the 2029 election, striking confidence and support arrangements with allies outside of the EFF to keep itself in power for another five years.
This allowed a broad church of smaller parties, which previously lacked critical mass, to come together in proper unity and organisation. South Africa’s tremendous diversity always bred healthy disagreement, preventing any one party sliding into messianic dictatorship territory.
Only then was the country’s entrepreneurial spirit unleashed.
Further renewable energy rounds tendered from 2025 added 10GW to the energy matrix before 2035. (Little mentioned is that international bank-backed highly successful rounds already took place between 2012 and 2022).
South Africa slowly became a world leader in renewables. Open to foreign investment, the wind blows and the sun shines strong. Gusty seas off the Western Cape shore allowed French energy major Total to pioneer methods of floating wind technology in 2033.
Transmission and grid issues were resolved partly by investment from sector privatisation in 2031. Microgrids solved the rest.
A milestone for the country came in 2033 when the coalition government reversed much affirmative action legislation. Businesses ‘tethered’ and hardened by a harsh commercial climate were now free to flourish, expanding within the country and abroad. Legislation enforcing equity allocation along racial lines benefits only benefited a small black elite and prevented business expansion.
No longer restrained by archaic employment legislation nor restrictive immigration laws, exports of South African produce skyrocketed in everything from grapefruits to platinum.
This meant that the 2030s were merely the sunrise for South Africa’s economic revival in what become one of the world’s highest growth, most dynamic economies.
To limit graft in public contracts, all public procurement was made live on public portals and some contracts were given to individuals rather than cronies (the latter is already happening).
The ‘Future-State’ apprenticeship scheme, part-private, part-government funded, allowed students to bypass expensive universities and provided businesses with required skills. (Forms of this already exist and there is a long track record of businesses and government working closely together).
This killed multiple ills with one stone: reducing crime, upskilling the population and creating a burgeoning middle class – the latter being a socioeconomic essential ingredient for stability.
South Africa is what you make of it
Development scholar Hans Rosling repeated how good news is drowned out, distorting reality. He famously silenced an opponent, explaining how Nigeria’s insurrection was confined to a small north-western corner of the country. Less headline-worthy was that the country’s coverage of education and healthcare has slowly been edging up towards universal over the last 30 years.
Similarly, scholar Faye Donnelly writes extensively on how speech and ideas materially impact outcomes in international politics. Not being overwhelmed by doom-mongering news is ever more important in a country as complicated as South Africa.
Blackouts make the news. Less headline-worthy is the fightback that South Africans are making of it. There has been a formidable effort by the country’s independent legal system to bring to justice the criminals who have crippled the state utility, emanating from the courageous acts of whistleblowing of the utility’s former CEO, Andre de Ruyter. Less headline-worthy is that an entire economy is emerging off-grid, or that Eskom’s monopoly has been removed, as have limits on private power generation. These changes take time to bear fruit.
With consolidating changes already underway, South Africa stands for a much brighter future.
In addition to ideas outlined above, South Africa has considerable low-hanging economic fruit. Remote working legislation for those escaping northern hemisphere winters seems a no brainer. Enviable government clout should be used to grant new mineral exploration rights and levy modest taxes on new oil and gas discoveries such as Luiperd and Brulpadda, boosting the exchequer. Counter-cyclical mineral funds seem prudent.
South Africa is the largest sub-Saharan recipient of foreign direct investment. It has one of the most free and open constitutions anywhere, protecting its myriad of ethnicities, with 11 official languages and providing modest state support for those at the bottom. Demographics are in its favour.
Business opportunities are aplenty; from data centres to wine to tourism, from TV production to maize and oranges. The astute business class knows this too and is well-placed to rise the sail and take advantage of these coming tailwinds.
South Africa confounds critics, time and again.
A predicted bloodbath in 1990 was avoided. As political violence was proliferating, civil society groups got together and ‘reimposed rule of law… to many torn communities’.
Many thought the elections would not go ahead in 1994. They did. Nelson Mandela’s exceptional leadership contained breakaway separatist groups.
Many doubted South Africa’s ability to host the 2010 FIFA World Cup. Despite transportation and logistical concerns, FIFA declared 2010 its most successful edition, unforgettable for its colour and spread across nine cities.
Whilst awareness is necessary, a constant, lingering narrative that the country may implode is not helpful for those living there, working to build South Africa 3.0. It is also intellectually lazy.
Rather than continuing national-decline talk, why not make donations to political parties, newspapers, or independent investigations such as those tackling Eskom graft (already being funded by private businesses)? Over the next five years, efforts to resource civil society should be coordinated and appeal to South Africans abroad for funding. The ever-sinking value of the rand ensures any contributions go a long way.
The integrity and the destiny of South Africa now depends on well-organised replacements to the ANC. Democratic freedom and civil society in the country provides them. They should be taken up. South Africa is what its citizens, at home and abroad, make of it.
- Clem Sunter updates his flags: SA’s binary 2024 Election; World also on a knife edge
- Putin’s BRICS dream, Ramaphosa’s nuke nightmare, Wagner’s new leader and the long war…
- Cronje: Voters say DA’s W Cape template shining ever brighter; Great AGOA news
*Sean McLaughlin has worked in market intelligence on Latin America and Spain between 2016 and 2020. He writes extensively on the issue of Northern Ireland in the EU-UK Brexit negotiations for think tank VoteWatch Europe. Since 2021, he has been working as a data analyst for a data provider in the energy industry, in Edinburgh, Scotland.
The views expressed in the article are the author’s and not necessarily shared by the members of the Free Market Foundation.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.