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Artillery Row

South Africa needs better policies, not just better vibes

Political change must lead to economic change as well

Tuesday, 8 October, marked the first 100 days of South Africa’s “Government of National Unity” (GNU). The GNU was formed on 30 June in the aftermath of the 29 May 2024 general election, wherein the African National Congress (ANC) for the first time since apartheid ended in 1994, lost its absolute majority in Parliament. This caused much hope for reform.

The new multiparty government consists primarily of the ANC, which only cobbled together about 40 per cent in the election, the Democratic Alliance (DA), the ANC’s former and fierce opposition, which received about 22 per cent in the election, and the Inkatha Freedom Party (IFP), another former ANC opponent, which obtained around 4 per cent of the vote. 

A handful of other, smaller parties are also represented.

President Cyril Ramaphosa’s announcement of a unity government was met with much domestic and international fanfare, with many believing that the moment for true reform, after years of increasing leftward populist radicalism, had finally arrived.

But after 100 days of this government — when its political capital was arguably at its highest — there have been exactly zero significant policy reforms. While the potential for change is not gone, it will only become more difficult as time goes on and the honeymoon period of the GNU comes to an end.

The three policies that must be viewed as the test for the reformist ambitions of the GNU, are the Expropriation Bill, the National Health Insurance Act, and the labour framework.

While some object to the overload of “-isms” and pretend that the end of the Cold War was the end of ideology, it is entirely appropriate to characterise each of these policies as being clearly tainted by the ANC’s socialism.

The Expropriation Bill, perhaps its most severe manifestation, makes it significantly easier for the South African government to seize private property, and even allows it to confiscate property — that is, seize it legally without paying one cent in compensation to the owner. It is part of a long-running agenda by the ANC to, eventually, make the state the “custodian” (read: the owner) of all land in South Africa.

At this moment, there are only four sub-Saharan African states where the phenomenon of private ownership of agricultural land is recognised: South Africa, Namibia, and parts of Botswana and Zambia. 

Being exceptional in this regard is something to be jealously protected, given how land has become nothing more than a vehicle for political patronage elsewhere on the continent, rather than — as one would expect with Africa’s plentiful natural endowments — feeding the fastest growing populations in the world.

The GNU has taken no steps to reverse the regress made thus far in bringing the Expropriation Bill into law. In fact, Ramaphosa appointed a member of the Pan Africanist Congress, a radical anti-property party, as his Minister of Land Reform. This minister, Mzwanele Nyhontso, within two weeks of his appointment, announced he would dedicate himself to undoing the constitutional protections for private property in South Africa.

Perhaps more present in the minds of South Africans, however, is National Health Insurance (NHI), which has been billed by its proponents as a mechanism through which to achieve universal healthcare.

Of course, South Africa already has a system of universal healthcare. Any citizen or permanent resident can go to their nearest state hospital or clinic and receive free medical care. What they can also do, in the alternative, is go to a private facility, which is what those who can afford it opt for, due to the state’s gross mismanagement of the public health system.

This latter category of South African therefore pays taxes to keep the dilapidated state system going, while also investing their own money into private medical aids and insurance. 

The NHI, far from simply providing a social safety net, seeks to undo this choice and force all South Africans into one, single payer model without private insurance options. Forcibly removing the pressure release valve of private care is, obviously, not a solution to South Africa’s health outcomes, but rather a move to bring about equality of misery.

Ramaphosa signed the NHI Act into law in the weeks before the election in a cynical attempt to snuff out any post-election debate about whether this disastrous plan should proceed, causing swift backlash from the millions of South Africans who dread having to rely exclusively on state care.

Finally — though there is a raft of other, bad policies that also need to go the way of the dodo – South African labour policy has been the consistent, underlying reason for a lack of real, work-intensive investment in the country over the past 30 years. 

Simply, nobody is desperately keen to employ South Africans. This is not because South Africans are not hard workers, but because the euphemistic “protections” offered by labour law do not simply make it difficult to get rid of underperforming employees but also makes it next to impossible for employers to protect themselves or their assets from riotous trade unions.

South Africa is worse on employment than Djibouti, Palestine, Sudan, and the Republic of Congo

Of South Africa’s working age population of 41.3 million, only some 16.7 million are working and 8.4 million are seeking work. That means, on the narrow definition, 33.5 per cent of the labour force, 25 million, is unemployed. On the expanded, and more relevant, definition, some 11.6 million South Africans are without work, being 42.6 per cent of the total labour force.

South Africa is worse on employment than Djibouti, Palestine, Sudan, and the Republic of Congo, and by some rankings is the worst in the world.

This is, simply, a disaster.

Research in 2023 by Statistics South Africa showed that social welfare grants were the second most important source of income for 50.2 per cent of South Africans, and the primary source of income for 23.5 per cent of households. This means the taxpayer is carrying a huge burden to care for those who are kept unemployed by government policy. This is not a sustainable economic policy model and holds much risk for future stability.

There is no hint that the GNU is even considering fundamental reforms to labour policy

The outsized political influence wielded by trade unions over the ANC is a key factor to consider in this context, but the ANC is by no means being held hostage by its unionist partners. The ANC is, instead, ideologically committed to this economic model, and embraces state dependency. As Dr Anthea Jeffery explains in her book, Countdown to Socialism, the ANC’s scheme is to make the population dependent upon government largesse, and through that door entrench itself in power permanently.

There is no hint that the GNU is even considering fundamental reforms to labour policy. In fact, the labour minister recently announced that 20,000 new state inspectors will be hired to ensure employers are complying with South Africa’s race-based employment laws. This serves only to discourage job creation per se.

It is not all doom and gloom. The formation of the GNU — bringing liberals and conservatives into the halls of power once monopolised by radical socialists — has signalled to many that the government now harbours, perhaps sentimentally, a more pragmatic view of things. Surveys show that South Africans are more upbeat about the future, and we expect economic growth to improve slightly in the midst of a state apparatus that seems more business friendly.

But, ultimately, the real test for the GNU is and must remain policy reform, not merely vibes. On this score, the GNU has undoubtedly failed to seize the moment.

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