Who is Cyril Ramaphosa? A profile of the new leader of South Africa's ANC

New ANC President Cyril Ramaphosa moments before winning.
EPA-EFE/Cornell Tukiri

South Africa’s governing party, the African National Congress (ANC), has a new president – Cyril Ramaphosa. But who is he?

Ramaphosa cuts a fitting figure to take over government, stabilise the economy, and secure the constitutional architecture that he helped create at the end of apartheid.

But to expect more would be expecting too much. He is unlikely to veer far from the traditional economic path chosen by the ANC.

There are some important features we can draw on to make some conjectures about the man.

The early days

Ramaphosa was born in Johannesburg, the industrial heartland of South Africa, on November 17, 1952. The second of three children, his father was a policeman. He grew up in Soweto where he attended primary and high school. He later went to Mphaphuli High School in Sibasa, Limpopo, were he was elected head of the Student Christian Movement soon after his arrival, attesting to his Christian beliefs.

He studied law at the then University of the North (Turfloop), where he became active in the South African Students Organisation, which was aligned to black consciousness ideology espoused by Steve Biko. He became active in the University Student Christian Movement, which was steeped in the liberation black theology of the black consciousness movement.

After graduating with a degree in law, Ramaphosa continued his political activism through the Black People’s Convention, for which he was jailed for six months. He went on to serve articles and joined the Council of Trade Unions of South Africa which was to form the National Union of Mineworkers (NUM) with Ramaphosa as its first secretary general. He helped built the NUM into the largest trade union in the country, serving as its secretary general for just over 10 years.

Business and politics

His prominence and public stature grew even more when he was elected secretary general of the ANC in 1991. He went on to play a key role during South Africa’s transition, becoming one of the key architects of the country’s constitutional democracy.

Under the auspices of the Convention for a Democratic South Africa (Codesa), he became the ANC’s lead negotiator during negotiations on a post-apartheid arrangement.

Following this, he led the ANC team in drawing up a new constitution for the country. It is now considered one of the most progressive constitutions in the world.

In 1994 Ramaphosa lost the contest to become President Nelson Mandela’s deputy. Having Thabo Mbeki appointed instead was a blow, but persuaded by Mandela, Ramaphosa went into business.

For the next two decades Ramaphosa put his energies into building a large investment holding company Shanduka with interests in sectors ranging from mining to fast foods. The success of the group confirmed his reputation as a skilled dealmaker and negotiator.

During this 20-year period in business, Ramaphosa established deep links in the private sector in South Africa.

This set him at odds with sections of the ANC which believe that the post-apartheid arrangements delivered political power, but not economic freedom. These voices have become louder under President Jacob Zuma’s presidency with calls for radical economic transformation and action to tackle white monopoly capital.

Ramaphosa will have his work cut out for him as he tries to accommodate these demands by driving a more inclusive social compact in the country while simultaneously trying to manage rampant corruption in the private and public sectors.

Road to presidency

Even during his years in business Ramaphosa remained close to the ANC, serving as a member of the national disciplinary committee.

But he made his major comeback onto the political scene at the ANC’s 2012 elective conference in Mangaung, Bloemfontein where he was elected deputy president of the ANC, and later of the country.

Two years prior to this Ramaphosa became deputy chairman of the state-run National Planning Commission. He presided over its diagnostic report, which set out the problems facing the country in clear terms. A plan was drawn up to provide answers to the challenges identified in report. Known as the National Development Plan, it was tabled as a blue print for the type of society South Africa could become.

The plan showed Ramaphosa’s strengths as an architect of social compacts.

Since its tabling the plan has been left to gather dust. But it remains a point of reference, and serves as a counterpoint to calls for radical economic transformation.

Ramaphosa is likely to emphasise stability – in government and the ANC. Given his history he is likely to want to stabilise the economy rather than to pursue radical interventions.

Ramaphosa has a personal interest to secure a stabilising social compact akin to the one he negotiated in 1994 given developments that have left the country economically and socially weaker. These have included allegations that parts of the state have been taken over by corrupt civil servants and some private sector interests, high levels of unemployment and increasingly fractious public debates.

Not surprisingly during his campaign trail he moulded his image on the sanctity of the rule of law and on the dictum that social stability hinges on respect of the rule of law.

The big question mark over Ramaphosa is how effective he will be. Although he’s been the deputy president of the ANC and of the country for five years, some believe that his influence has been minimal and that he has not been able to imprint his leadership on the party – or the country.

Will he be able to impose his will on those he now leads? Ramaphosa will be presiding over officials who have big personalities and have enjoyed long periods of political power. They are used to leading, not following.

Thapelo Tselapedi, Politics lecturer, Rhodes University

This article was originally published on The Conversation.

Why Ramaphosa won't be able to deliver the three urgent fixes South Africa needs

New ANC President Cyril Ramaphosa, centre, with fellow top leaders elected at the party’s 54th national conference.
EPA-EFE/Cornell Tukiri

The competition for the top six leadership positions in South Africa’s governing party, the African National Congress (ANC), was no carefully choreographed script such as the one-candidate-per-election of Chinese Communist Party congresses. It was a rip-roaring, full-throated democratic contestation – as raucous as US primary elections. Even more so, with delegates’ repeated singing and dancing.

This point bears emphasising. As recently as 2016, one hardline ANC critic published a book-length argument that ANC political practice and culture is shaped by an exile culture of avoiding or rigging elections. The ANC’s 2017 national elective conference proves him wrong.

At a cost of tens of millions of rand to host 4 776 delegates – and 1 200 accredited journalists – for a five day conference, the ANC achieved the closest possible thing to internal democracy. By contrast, the UK Prime Minister has, on occasion, been chosen by less than four hundred MPs in a party parliamentary caucus.

This refutes those who predicted “the end of the ANC”.

In the end Cyril Ramaphosa won the tightly contested race. He was the favourite candidate of that rarest of all alliances - business, labour and the South African Communist Party. His election was preceded by high expectations that, if elected, he would displace Zuma as state president before his term ends in 2019; stop corruption in loss making state owned enterprises; and make credible appointments to replace discredited ones in state institutions.

On the one hand, Ramaphosa’s narrow victory over Nkosazana Dlamini-Zuma means that there will be no breakaway from the ANC, unlike the Economic Freedom Front and COPE after previous pivotal moments in the party.

On the other, Ramaphosa wins a poisoned chalice, raising big question marks over whether he will be able to deliver on the three big expectations.

Poisoned chalice

Ramaphosa faces a number of constraints. The biggest one is the composition of the other four men and a woman who constitute the ANC’s “top six”. The team effectively runs the organisation.

The election results for the top six were a neck-and-neck mix of the two rival slates behind Ramaphosa and Dlamini-Zuma. Winning candidates were separated from their rivals by only a few hundred votes.

Cyril Ramaphosa with Nkosazana Dlamini-Zuma. He narrowly defeated her to become ANC president.
EPA-EFE/Kim Ludrook

The rest of the team that will work with Ramaphosa are: David Mabuza as deputy president, Gwede Mantashe as national chairman, Ace Magashule as secretary-general, Paul Mashatile as treasurer-general and Jessie Duarte remains deputy secretary-general.

It makes for strange bedfellows given that Mabuza, Magashule and Duarte are widely viewed as Jacob Zuma supporters. This means that Ramaphosa won’t be as free to act as he might want to.

For example, it’s unlikely that a majority of the six would back a motion to ask Zuma to retire as state president before the end of his term of office in 2019.

It also remains to be seen to what extent this mixed slate leadership will support action against the Guptas, Zuma’s friends at the heart of state capture allegations, and tenderpreneurs - business people who get rich through government tenders, usually using dubious means - and the whole system of patronage and clientelism that has gotten out of hand.

The make-up of the team that Ramaphosa will lead might also baulk at pressing the ANC led Parliament to take decisive action against the decline in the country’s large state owned enterprises such as South African Airways and power utility Eskom.

Implications for the opposition

The best results from a partisan viewpoint for the Democratic Alliance (DA) and Economic Freedom Fighters (EFF) would be had Dlamini-Zuma won. This would have alienated more ANC voters in the 2019 elections.

Ramaphosa’s victory means the DA has no option but to knuckle down to the hard slog of building branches in townships, ensuring a rising proportion of black people are represented as members, and promoting a rising proportion of black representatives in its parliamentary and provincial legislature caucuses.

Anticipating a Ramaphosa win, DA leader Mmusi Maimane set the tone for his party’s 2019 campaign in a recent round of full page newspaper ads with the message: whoever wins at the ANC conference is irrelevant – only a DA government can turn the country around. For DA election canvassers, every month that Zuma continues in office as state president is the gift that keeps on giving.

But whether Ramaphosa can tempt disillusioned, abstaining ANC voters back to the polls remains a moot point. Will the DA now win the Gauteng Province in the 2019 elections? Will the ANC retain its shrinking Northern Cape Provincial majority? Can the DA get an absolute majority, or at least hold onto its three metro prize catches of Johannesburg, Tshwane, and Nelson Mandela Bay during the 2021 municipal elections?

All these questions are now part of the roller coaster ride that is normal in functioning democracies.

The EFF will probably continue its taunting of Ramaphosa as “buffalo man”, – a reference to the fact that he bought a buffalo cow and her calf for nearly R20 million rand – but the party seems to have hit its ceiling of attracting alienated ANC voters. It will struggle to build its share of the vote any higher.

This ANC elective conference marks the start of a watershed for the party, which will continue until the end of Zuma’s term as president of the country in 2019.

Keith Gottschalk, Political Scientist, University of the Western Cape

This article was originally published on The Conversation.

The ANC has a new leader: but South Africa remains on a political precipice

Cyril Ramaphosa, the new president of South Africa’s governing party, the ANC, and potentially the country’s future president.
Reuters/Siphiwe Sibeko

Rumours that President Jacob Zuma has instructed the South African National Defence Force to draw up plans for implementing a state of emergency may or may not be true. Nonetheless they are evidence of South Africa’s febrile political atmosphere.

But any assumption that the election of Cyril Ramaphosa as the new leader of the African National Congress (ANC), after winning the race against Nkosazana Dlamini-Zuma, will place South Africa on an even keel are misplaced. Indeed, the drama may only be beginning.

It’s useful to look back to 2007 when President Thabo Mbeki unwisely ran for a third term as ANC leader. His unpopularity among large segments of the party provided the platform for his defeat by Zuma at Polokwane. Within a few months the National Executive Committee of the ANC latched onto an excuse to ask Mbeki to stand down as president of the country before the end of his term of office. Being committed to the traditions of party loyalty he complied, resigning as president some eight months before the Constitution required him to do so.

The question this raises is whether South Africa should now expect a repeat performance following the election of a new leader of the ANC. Will this lead to a party instruction to Zuma to stand down as president of the country? And if it does, will he do what Mbeki did and meekly resign?

There’s a big difference between the two scenarios: Mbeki had no reason to fear the consequences of leaving office. Zuma, on the other hand, has numerous reasons to cling to power. This is what makes him, and the immediate future, dangerous for South Africa, and suggests the country faces instability.

Why Zuma won’t go

It is not out of the question that Zuma may say to himself, and to South Africa, that he is not going anywhere. He is losing court case after court case, and judicial decisions are increasingly narrowing his legal capacity to block official and independent investigations into the extent of state capture by business interests close to him.

With every passing day, the prospects of his finding himself in the dock, facing 783 charges, including of corruption and racketeering, also increase.

Zuma will have every constitutional right to defy an ANC instruction to stand down as state president until his term expires following the next general election in 2019, and the new parliament’s election of a new president. In terms of the South African Constitution, his term of office will be brought to an early end only if parliament passes a vote of no confidence in his presidency, or votes that, for one reason or another, he is unfit for office.

But today’s ANC is so divided that it cannot be assumed that a majority of ANC MPs would back a motion of no confidence, even following the election of Ramaphosa as the party’s new leader.

In other words, there is a very real prospect that South Africa will see itself ruled for at least another 18 months or so by what is termed “two centres of power”, with the authority and the legitimacy of the party (formally backing Ramaphosa) vying against that of the state (headed by Zuma).

Throwing caution to the wind

As if that is not a sufficient condition for political instability, we may expect that Zuma will continue to use his executive power to erect defences against his future prosecution. He will reckon to leave office only with guarantees of immunity. Until he gets them, Zuma will defy all blandishments to go. And if he does not get what he wants, he may throw caution to the wind and go for broke.

Hence, perhaps, the possibility that he is prepared to invoke a state of emergency.

The grounds for Zuma imposing a state of emergency would be specious, summoned up to defend his interests and those backing him. They would be likely to infer foreign interference in affairs of state, alongside suggestions that white monopoly capital, whites as a whole as well as nefarious others were conspiring to prevent much needed radical economic transformation. Present constitutional arrangements would be declared counter-revolutionary and those defending them doing so only to protect their material interests.

After a matter of time, such justifications would probably be declared unconstitutional by the judiciary. It is then that there would be a confrontation between raw power and the Constitution. If such a situation should arise, we cannot be sure which would be the winner.

South Africa’s army

It is remarkable how little the searchlight that has focused on state capture has rested on the Defence Force. Much attention has been given to how the executive has effectively co-opted the intelligence and prosecutorial service, as well has how the top ranks of the police have been selected for political rather than operational reasons.

It seems to have been assumed that South Africa’s military is simply sitting in the background, observing political events from afar. But is it? Where would its loyalties lie in the event of a major constitutional crisis?

The danger of the present situation is that South Africa might be about to find out.

Were the military to throw its weight behind Zuma the country would be in no-man’s land. Of course, there would be a massive popular reaction, with the further danger that the president himself would summon his popular cohorts to “defend the revolution”.

And South Africans should not assume that Zuma would be politically isolated. Those who backed Dlamini-Zuma did so to defend their present positions and capacity to use office for personal gain. If they were to rise up, the army would then be elevated to the status of defender of civil order.

What is certain is that in such a wholly uncertain situation the economy would spiral downwards quickly. Capital would take flight at a faster rate than ever before, employment would collapse even further, poverty would become even further entrenched.

Reasons to be hopeful

Is all this too extreme a scenario? Hopefully yes. There are numerous good reasons why such a fate will be averted.

Zuma’s control over the ANC is waning, as is his control over various state institutions, notably the National Prosecuting Authority. And the country has a checks and balances in place: there is a vigorous civil society, the judiciary has proved the Constitution’s main defence and trade unions and business remain influential.

Even so, it remains the case that what transpires now that the ANC’s national conference is over will determine the fate and future of our democracy. South Africa is approaching rough waters, and a Jacob Zuma facing an inglorious and humiliating end to his presidency will be a Jacob Zuma at his most dangerous.

Roger Southall, Professor of Sociology, University of the Witwatersrand

This article was originally published on The Conversation.

South Africa's race relations laid bare in Steinhoff corporate scandal

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South Africans are fond of debating whether public or private sector failings are the bigger problem. It does not take too long to realise that they are really talking about race.

This is evident as the country faces an unusual scandal – one involving a private company called Steinhoff. The multinational furniture company is in trouble after German investigators began looking into it, for allegedly doctoring financial information to mislead the markets.

This was not the first time fingers were pointed at a private company. Auditors KPMG have been accused of unethical practice on behalf of the Gupta family who are linked to President Jacob Zuma and are accused of using money to influence government appointments and policies. Media conglomerate Naspers is also facing corruption accusations. Its subsidiary MultiChoice is accused of paying large sums to the formerly Gupta-owned television channel ANN7 in the hope of influencing government decisions.

But Steinhoff stands out because it does most to shake the confidence of one side of the argument and to get the other claiming it is vindicated.
For much of the past few years, corruption has been seen almost exclusively as a public sector problem. Attention has focused on Zuma and his relationship with the Guptas. The private sector (Gupta-owned firms excepted) has, by default, been painted as a corruption-free zone.

The KPMG and Naspers cases may involve prominent private firms, but are seen by the national debate as yet another sign of the Guptas’ baleful influence. The villains remain the same and so does the problem: public sector corruption.

Steinhoff is a different matter entirely. The state plays no role at all and the company is a pillar of the private economy. Its leadership is overwhelmingly white and its attitude to the post-apartheid government seems to range from indifference to scepticism.

No wonder that its failings have been gleefully seized upon by people who insist that private sector corruption is as big a problem as its public equivalent. Or that many of the people who usually insist that public corruption is the problem have reacted to Steinhoff with shock.

On the surface, this sounds like the standard debate in most democracies over the past few decades in which one side favours letting business do as it pleases and the other wants it to be reined in by the state. But, in a country in which whites remain dominant in private business while blacks largely control the government, it is really about the country’s racial divides.

Colour of merit

Apartheid was underpinned by strong beliefs in white superiority – these don’t simply melt away because political rules change. People are used to seeing one racial group in skilled jobs, giving orders to the other: inevitably, this becomes seen as natural and so being white is associated with merit, being black with lacking it.

Since 1994, when policies promoting black advancement in business and the professions were adopted, this is often expressed in the view that black people in senior positions are there because they were given a free pass by the system, not because they deserve it.

This way of thinking also shapes attitudes to government and business. For those used to the racial pecking order of the past, government is run by people who hold posts because they are black, not because they are competent. Business continues to be run mainly by people who were judged to be competent in the past and who are therefore assumed now to be honest and to know what they are doing. Calls to assign more government functions to businesses or business people are often a way of saying that white people or black people approved by them should be running the country.

This attitude is particularly evident in how people in the suburbs react to private monopolies or dominant corporations.

Government departments are almost always associated with waiting in long lines for surly officials who have no idea what they are doing. In most cases, this is a caricature; in some, the Department of Home Affairs passport office for example, it is flat wrong. But similar long waits, indifference to customers and incompetence at the dominant digital television corporation or one of the mobile phone companies is accepted cheerfully as normal business practice.

Delighted black voices

Black people are perfectly well aware of these attitudes. This is why those who insist that the private sector is as bad if not worse than its public equivalent are almost always black. And why many black voices are delighted at what has happened at Steinhoff because it shows that a pillar of white business can behave at least as badly as black government.

It also explains why many white people have reacted to Steinhoff with such shock – and why Steinhoff happened in the first place.

The editor of the country’s leading business daily, Tim Cohen, has pointed out that Steinhoff’s failings should not have been a surprise since several market analysts warned a while ago that something was amiss and were ignored. He offered some explanations but, given the realities described here, the most likely answer is that no-one believed the specialist nay-sayers because they assumed that a major white-owned company must know what it is doing and that the critics must have an axe to grind.

Cohen also ran into trouble on social media for suggesting that reduced capacity at state regulators allowed Steinhoff to happen. Predictably, black people felt (wrongly in his view) that they were being blamed for white business failings.

There is another explanation for the regulators’ inaction. It is that they were not eager to look into a large white-owned company because they feared that this would be seen as yet another case in which incompetent black people wanted to bully competent whites. It is standard in the South African debate that any attempt by government, however mild, to intervene in business is branded a threat to the market economy so it would hardly be surprising if regulators feared this.

Correcting wrong perceptions

The Steinhoff scandal would do South Africa a huge service if it made the point that corruption and mismanagement have nothing to do with race. It would also help if it alerted everyone in the marketplace to watch as carefully over private companies as they do over government departments.

But, given how entrenched racial attitudes are, it is more likely that it will be dismissed as a once-off freak by those who assume that white led business is always competent and as further evidence of white prejudice by black people reacting to the label often stuck to them. If that happens, some private businesses will continue to get away with behaviour which would never be tolerated in government.

Steven Friedman, Professor of Political Studies, University of Johannesburg

This article was originally published on The Conversation.

South Africa needs electoral reform, but president's powers need watching

Jacob Zuma, president of South Africa. There are renewed calls for citizens to directly elect their president and other representatives.
Reuters/Sumaya Hisham

Within a short time, the 4000 odd delegates to South Africa’s governing African National Congress’s 54th National Conference will elect a new party leader. In turn – save death, disaster or unlikely electoral defeat – a parliament stuffed with an ANC majority will at some point elect that leader as the new President of South Africa. The expectation is that this will be Nkosazana Dlamini-Zuma or Cyril Ramaphosa. But, if the ANC elects a pig, the ANC parliamentary majority will vote for the pig.

Although it is by no means unusual for parliaments to elect countries’ political leaders, there is widespread complaint in South Africa that it is the small ANC elite which attends the conference that effectively selects the next president of the country. This, it is said by many, is undemocratic.

Two main reasons are cited. First, ANC electoral procedures are deeply corrupted by money changing hands, personal ambition and factionalism. Second, it should be the people, not the party, which should be charged with electing the country’s leader.

It is therefore of considerable interest that, rather than emanating from civil society or another political party, the proposal has been made by the ANC’s Gauteng provincial conference that consideration should be given to ordinary voters voting directly for presidents, premiers and mayors. This is of particular interest given that Gauteng is one of the ANC’s most powerful provinces, and at the same time, one which is often at odds with the party’s current leadership.

The proposal that the state president, provincial premiers and mayors be directly elected is a most welcome one, as there is much need to consider the quality of South Africa’s democracy, and to encourage public participation in decision-making. However, direct election of such offices simultaneously holds its risks.

The electoral reform debate

The debate about electoral reform in post-1994 South Africa has largely focused on the system used to elect MPs and their counterparts in the country’s nine provinces. The standard argument for a change was captured succinctly by ANC dissident and Umkhonto we Sizwe veteran Omry Makgoale:

When will we wake up and reform our crooked electoral system?

The argument is that the list proportional representation system results in the election of MPs who are accountable to party bosses rather than voters. Such an outcome is rendered more certain by the fact that South Africa’s constitution lays down that MPs or provincial legislature representatives who leave or are ejected from their parties lose their seat in the relevant legislature, plus the handy salary that goes with it. To continue with the animalistic referencing, parties’ elected representatives become sheep, devoid of any capacity for independence.

Presidential hopeful Nkosazana Dlamini-ZumaChairperson.
Reuters/Francois Lenoir

Such critiques often suggest (very sensibly) that the electoral system should become a mixed one which combines proportionality of outcomes with the direct election of representatives from constituencies. This was recommended in 2002 by the Van Zyl Slabbert Commission on electoral reform. But there has been relatively little debate about whether the President and premiers should be directly elected.

The survey conducted on behalf of the Van Zyl Slabbert Commission indicated that 63% of respondents would have liked to vote for the president directly. This level of preference was pretty much the same across all racial groups. Given the disastrous nature of the Zuma presidency, it is very possible that the preference for direct election would be considerably higher if the issue was put to survey respondents today.

Virtue of direction election

The virtue of the direct election of key political leaders is said to be that it renders them directly accountable to voters rather than to their political parties. On the face of it, it is an attractive argument, and it is one which could usefully introduce more diversity into the South African political system.

If they wanted to maximise their vote, parties would have to look at the qualities of their candidates, and ask themselves whether they would appeal to the electorate as a whole. (On this reckoning, it is a dead cert that Cyril Ramaphosa would streak home and dry, rather than, as under the ANC’s present system, running neck and neck with his chief rival, whose popular appeal is that of a wet fish). This would mean that candidates would end up openly campaigning for the leadership, dispensing with the ANC’s absurd pretence that individuals should not demonstrate political ambition.

There is also the possibility that voters would elect a president from a party other than the one which enjoys a majority in the National Assembly.

Would direct election of the president, premiers and mayors be a good idea? And, if so, what system should be adopted?

The second question is easily answered. To avoid the election of a president who gains less than 50% of a popular vote but more than any other candidate, provision would wisely be made for a second round of a presidential election in which the top two candidates engage in a run off.

A good idea?

So would direction elections be a good idea?

Parliamentary systems work well because they devolve the election of prime ministers to the legislature. On the continent, countries that inherited a parliamentary system from Britain subsequently opted for elective presidencies.

The results are not unambiguously encouraging.

South African Deputy President Cyril Ramaphosa.
GCIS

In Kenya and Zambia, for instance, the direct election of presidents may have weakened the link between legislatures and executives. This has allowed executives to trample over legislatures, and for leaders to claim a legitimacy separate from that of their party. Presidents from Daniel Arap Moi through to Uhuru Kenyatta in Kenya and from Frederick Chiluba through to Edgar Lungu in Zambia have all proved exceedingly authoritarian.

It follows that changing the South African system to allow for direct election would require the country to look carefully at how a directly elected president should be rendered accountable to parliament. Would the change enhance the accountability of the government by empowering MPs, or would it render them increasingly irrelevant?

Dangers of an all-powerful president

It is also worth recalling that there is now much greater awareness about how much power is concentrated in the Presidency, in a way, it would seem, that the makers of the country’s constitution did not intend. Under Zuma, the presidency has a direct say in far too much, such as the right to appoint the head of a National Prosecuting Authority which might have the responsibility of calling him to legal account.

South Africans need to be wary of any change in the system which ends up making the President less – rather than more – accountable.

In any case, while there can be very good reasons for reforming an electoral system, this will not automatically result in better governance. Form can rarely trump substance. Robert Mugabe only “won” the Zimbabwean presidency in 2008 through his army and police terrorising the opposition and effectively forcing his rival, Morgan Tsvangirai, to withdraw.

It will take more than a piecemeal change to South Africa’s constitution to improve it’s democracy. South Africans should be careful what they wish for, as they can never be quite sure what they will get.

Roger Southall, Professor of Sociology, University of the Witwatersrand

This article was originally published on The Conversation.

Why changes to South Africa's labour laws are an assault on workers' rights

South African public sector workers march for higher pay.
Reuters/Mike Hutchings

The biggest changes to South Africa’s labour laws since 1995, shortly after the country’s first democratic elections, are currently being considered by parliament. If passed into law, they will significantly limit the hard won rights of workers to strike. In addition, details about the country’s much-heralded national minimum wage set out in the enabling legislation show that, in practice, it may be unenforceable.

The three bills include amendments to the Labour Relations Act and the Basic Conditions of Employment Act, as well as the new National Minimum Wage Bill.

If these proposed amendments become law it will be a significant defeat for workers. Taken together the legislation would roll back the hard won gains of the labour movement in South Africa and curtail the most powerful tool available to workers to improve their earnings.

The end result is likely to deepen South Africa’s vast inequalities.

The right to strike

Two of the proposed changes will affect workers’ right to strike, which is protected under South Africa’s Constitution.

First, the proposed amendments to the Labour Relations Act would introduce measures which, although designed to minimise violent strikes, would, in fact, discourage strikes in general. For example, the amendments would require trade unions to hold secret ballots to decide on strikes. By individualising the decision to strike, the secret ballot fundamentally undermines the collective nature of a strike.

Second, the proposed Labour Relations Act amendments will introduce a mechanism where strikes could be resolved through an advisory arbitration panel, which would be led by a senior commissioner of the Commission for Conciliation, Mediation and Arbitration (CCMA).

The problems with this are that the circumstances under which an advisory arbitration panel can be convened are very broad and, crucially, employers will have the right to request it. Meaning employers will have an easy way to resolve strikes without necessarily having to engage their workers directly or agree to any of their demands. The decision of the advisory arbitration, unless appealed, will be binding on all parties.

On top of this, trade unions can be interdicted at any time during what would be a more onerous procedure.

If passed, the amendments would make protracted strikes, such as the 2014 platinum strike, highly unlikely.

Show us the money

Details of the bill reveal a different picture of the country’s much heralded national minimum wage of R3,500 (USD$256). There will be no monthly minimum wage, only an hourly minimum wage of R20 p/h. Those that work flexible hours or part time will be unlikely to earn the R3,500, if they work under 40 hours a week. For domestic and farm workers the news is worse: farm workers will earn R18 p/h, while domestic workers will receive only R15 p/h. Only in 2020 will these workers receive the full minimum wage.

Two problems loom large in the implementation of the national minimum wage. One is compliance, the other redress.

Some sectors, including domestic work and farm work, already have minimum wages prescribed in the sectoral determination. But, non-compliance can be as high as 50%, as is the case in the agricultural sector. Based on current experience, there is no reason to think that compliance with the national minimum wage will be any different.

But, the ability of workers to get justice will become significantly more difficult.

Under the proposed amendments, the enforcement of the national minimum wage will move from the Department of Labour to the CCMA. This will make the process of seeking redress more arduous.

If a worker is being underpaid, she will have to refer her case to the CCMA. The average time for a case to reach arbitration is 60 days, but in the experience of the Casual Workers Advice Office it can take many more months.

Even if a worker eventually receives an arbitration award, many employers can simply ignore it. The next step is for the worker to have the award certified by the CCMA. If the employer still refuses to abide by the award the worker has to get a writ of execution, which is then served by a sheriff but often only after the demand for a deposit has been met. In 2016/2017, the CCMA had to assist 4,000 low-paid workers in getting a writ of execution. Many more workers often give up hope and never see through the enforcement of their arbitration award. Many more are not even aware of the CCMA remedy.

By making the CCMA the primary enforcer of the national minimum wage, the process is likely to become fraught with legal and practical difficulties, making the whole process unworkable.

What’s worse is that, to accommodate the national minimum wage, the amended Basic Conditions of Employment Act will actually roll back important rights for some workers.

Sectoral determinations do not only prescribe minimum wages but provide important protections for workers, such as provident funds. Amendments to the act will mean that the sectoral determinations will be phased out and replaced with the national minimum wage law. This could mean that workers could lose out on both the wage front as well as some important rights. This is particularly the case for farm workers who stand to lose important rights to housing.

How did it come to this?

You would have expected trade unions to have objected loudly to these fundamental changes to worker rights. Not so. The country’s leading trade union federations, including Cosatu, Fedusa and Nactu have all been involved in negotiations on the changes.

What this reflects is the balance of class forces in South Africa today. Trade union membership has been declining and now only about a quarter of the workforce is unionised. Of those that are unionised, the overwhelming majority are likely to be in full time, permanent, professional or skilled employment.

The simple truth is that unions largely do not organise workers who will benefit from the national minimum wage and are therefore indifferent to its practicalities.

What is less clear is why the major trade union federations have been involved in a process that has negotiated away important protections around the right to strike.

Carin Runciman, Senior Reseacher, Centre for Social Change, University of Johannesburg

This article was originally published on The Conversation.

South Africa's communist party strips the ANC of its multi-class ruling party status

There is a fallout between alliance partners the South African Communist Party and the governing ANC.
EPA/Kim Ludbrook

The South African Communist Party (SACP) has broken with history and challenged the governing African National Congress (ANC) in an election. The SACP’s decision to go it alone in the Metsimaholo municipality by-election marks a new low in relations within the tripartite alliance forged during the struggle against apartheid. The other alliance partner is the trade union federation Cosatu. The contest ended in a hung council, with the ANC taking 16 seats, the Democratic Alliance 11, the Economic Freedom Fighters eight and the SACP three. Politics and Society Editor Thabo Leshilo asked political scientist Professor Dirk Kotze about the development.

What is the significance of this development?

The decision to contest an election on its own clearly represents a watershed event for the SACP. It is the first tangible step towards implementation of a resolution taken by the SACP in 2007. Then, unhappy with the ANC’s policies in government, the communists raised the issue of contesting elections themselves. It proposed doing this either within a “reconfigured alliance” or having its own candidates contest elections, after which it would come to an agreement with the ANC on how to cooperate in government.

The SACP’s decision to go it alone is the culmination of a fallout dating back to 1996. Then, the ANC government under President Thabo Mbeki announced a macro economic framework, known as Growth, Employment and Redistribution (Gear), without substantial consultations with the SACP and Cosatu. Both slammed the policy as being anti-communist and serving the interests of business at the expense of the poor working class.

The SACP, and Cosatu, thought that their fortunes had turned when, with their support, Jacob Zuma was elected president of the ANC in Polokwane in 2007. But it wasn’t to be. Both groups have subsequently fallen out with Zuma. The relationship has deteriorated so badly that SACP members in KwaZulu-Natal are being assassinated over municipal council positions.

Why is this so unusual?

The Tripartite Alliance can be traced back to the late 1940s and the Communist Party’s subsequent underground involvement in the ANC-led Congress of the People in 1955. The Congress Alliance adopted the Freedom Charter as its blueprint for a democratic and prosperous South Africa.

In the 1960s the formation of Umkhonto we Sizwe, the armed wing formed by ANC and SACP members, was arguably the most concrete articulation of the ANC-SACP alliance.

In the decades that followed the SACP played a key role in facilitating the support of the Soviet Union and Eastern Bloc for the ANC and South African Congress of Trade Unions. The communists also shaped the ANC’s philosophy around national liberation as the “national democratic revolution” and view of apartheid as “colonialism of a special type”.

This influence on the ANC was personified by the likes of leading communists Moses Kotane, Moses Mabhida and Dr Yusuf Dadoo. The SACP viewed the alliance as a popular front uniting the working class and progressive forces in the struggle for freedom.

The SACP is unique in Africa because very few communist parties survived after independence. Most of them were either banned or integrated into nationalist liberation movement governments.

The party’s independent participation in the Metsimaholo by-election takes it back to the period before 1950 when communists such as Brian Bunting and Sam Kahn represented the then Communist Party of South Africa in Parliament.

But after that, and after the party was banned, the SACP’s revolutionary theory of armed struggle and insurrection excluded an electoral approach.

Once the first inclusive elections were planned in South Africa, the SACP deferred to the ANC as the leader of the national democratic revolution to pursue an electoral approach.

What is the significance for South Africa?

Firstly, no one can continue to argue that the Tripartite Alliance is still a coherent political front bringing together a working class union movement (Cosatu), working class party (SACP) and a multi-class governing party (ANC).

What this means is that the ANC’s social democratic character in terms of a partnership with working class organisations has come to an end. The ANC will now have to reconfigure its own identity as a social democratic party, similar to former UK Prime Minister Tony Blair’s reconfiguration of “New Labour”.

Secondly, the SACP’s decision serves as an official recording of the radical changes the ANC’s identity has undergone in terms of how it defines its own interests or constituencies. It’s finally stating that its core interests and those of the ANC’s are in the process of parting ways. In socialist parlance, the ANC’s and SACP’s class interests have reached a crossroads.

This follows on the earlier decision by Cosatu’s largest affiliate the National Union of Metalworkers of South Africa to part ways with the federation and to establish the United Front as its own political vehicle. It’s still unclear whether this this will result in a new left political movement. But, all the socio-economic conditions - such as high inequality, unemployment, poverty and social discontent - provide fertile ground for just such a movement.

What are the electoral prospects of the SACP?

The SACP is not in a position to mobilise substantial support in the near future. The left is contested terrain and prone to fragmentation. This is partly the result of personality clashes and ideological hair-splitting.

It could possibly join forces with the National Union of Metalworkers of South Africa which, for the last 30 years, has debated the ideal of a workers’ party. This would only be viable if the SACP combined its party programme with the social democratic (social welfare) needs of a rural, non-socialist populace. This would imply making ideological compromises, which is not uncommon for the SACP. It would also require it to establish a real party political infrastructure.

Dirk Kotze, Professor in Political Science, University of South Africa

This article was originally published on The Conversation.

Snags that could cast doubt on ANC's choice of new leaders

South Africa’s governing African National Congress has begun the process of choosing its leaders.
EPA-EFE/Kim Ludrick

South Africa’s governing African National Congress (ANC) holds its highly contested national elective conference for its top six leaders, between December 16 – 20. The conference will, among other things, mark the end of Jacob Zuma’s controversial decade-long tenure as party president. It will also bring to an end a bruising contest to replace him. The top two contenders are Cyril Ramaphosa and Nkosazana Dlamini-Zuma. The Conversation Africa’s Politics and Society Editor, Thabo Leshilo, asked Keith Gottschalk about the process.

Why does the conference matter?

The elective conference is important for the party as well as the country. This is because the person chosen to lead the party has, since 1994, gone on to become president of the country – an outcome dictated by the fact that the parliament elects the next president and the ANC has a large majority in parliament. The outcome is therefore watched very closely by both South Africans who support the ANC and those who don’t.

How does the ANC choose its top leaders?

The ANC’s election process is full of extraordinary contradictions. It has built into it some of the most stringent checks and balances of any party in the world. On paper, the process could not be more fair. In practice either incompetence or manipulation causes much anger.

The party holds an elective conference every five years. According to the ANC rules, 90% of the delegates to the conference must be from party branches. Each branch in good standing is entitled to send one delegate, and if a branch has more than 250 delegates it is allowed to send one extra delegate per 250 extra members.

The additional 10% of delegates is made up of representatives from each provincial executive, delegates representing the women, youth and veterans leagues as well as members of the party’s National Executive Committee who attend in an ex officio capacity.

Before the conference ANC members are required to take part in a specially convened annual general meeting of their branch. There are over 2 000 branches in good standing. To be able to vote at this special AGM members have to have their ANC membership card as well as their South African national identity document.

What checks and balances are in place to make sure the process is fair?

Voting at the branch AGMs is monitored by trusted veterans chosen by the Provincial Executive Committee who are deployed to monitor the process.

Voting usually takes place by show of hands, but may be done by secret ballot. The team monitoring the process must take a picture of results of voting recorded on paper using their cellphones and send the image to the party’s national headquarters at Luthuli House, in Johannesburg. This is to prevent ballot results being tampered with.

What are the flaws in the system?

I believe the process is fair. But it would be fairer if there was a direct one-member-one-vote system instead of branch totals.

The flaws in the system relate to the extent to which rigging can take place. This can happen by wealthy politicians setting up ghost branches. Provincial executive committees also sometimes try to manipulate the outcome of the branch AGMs. This can happen through manipulating who gets chosen to represent the branch as a delegate to the national conference.

But the biggest opening to possible fraud is through using the issuing of ANC membership cards to “gatekeep” – stopping people from being able to vote in branches, or even from attending the conference. Membership cards, and being included on the membership list compiled by Luthuli House, national HQ (as opposed to lists kept by one’s own branch and provincial office) matter because they give individuals the right to vote at their branches, as well as at the conference if they’re chosen to go as a delegate.

During the last few conferences there were accusations that the Zuma faction of the ANC deliberately used the fact that renewals and new cards can take a very long time to issue to keep certain people from attending (and voting).

The issuing of cards is a mess. New members complain bitterly about waiting inordinately long periods - sometimes up to 21 months - to get their membership cards. Renewals can also take forever. The renewal of the late ANC former cabinet minister Kader Asmal’s membership card reached his widow five years after he died.

Sometimes, some members in good standing suddenly discover that their names have been removed from the membership register. The most high profile of these cases was Zweli Mkhize, the party’s treasurer and one of its top six leaders.

Five years ago an example of gatekeeping hit one branch’s delegate when he arrived at the national conference at Mangaung. He was told he was not a member in good standing. He was in fact an ANC Member of the Provincial Legislature. Only after votes were cast which saw Jacob Zuma re-emerge as party president was it conceded that he was actually a member in good standing.

Another potential flaw is that delegates who are mandated by their branch to vote for one particular candidate are persuaded – for example by being bribed when they get to the conference – to vote for someone else.

Voting at the conference is by secret ballot. The assumption is that branch delegates will behave with integrity and vote for the person their branch mandated them to vote for.

But even if they do accept a bribe, those reportedly offering the bribe have no way of knowing if the delegate actually did change his or her vote.

South Africans, especially ANC voters, will be watching closely for any signs of rigging, bribing branch delegates to switch their votes, and other manipulations. If all is free and fair the process certainly equals, for example, the degree of democracy in UK and US parties choosing their leaders.

Keith Gottschalk, Political Scientist, University of the Western Cape

This article was originally published on The Conversation.

History explains why South Africans on the left argue for free passes for the rich

Students from Wits University, in Johannesburg, during a protest for free education.
EPA/Kim Ludbrook

In a society like South Africa in which one racial group has dominated another, poor people are ignored in economic debates by those who claim to speak for them.

Take the calls for free higher education which featured prominently in student protests over the past two to three years. They are back in the limelight because President Jacob Zuma’s desire to spend billions on providing free tertiary education has prompted a public controversy in which he was accused of wanting to bankrupt the Treasury for political gain. Although it later became clear that Zuma only wanted to pay for students whose household incomes were below R350 000 a year, the reports revived interest in the free education demand.

Outsiders might find something curious about the higher education fees debate in South Africa. The demand that no-one should pay is an article of faith among people who occupy the left in the country. The view that the well-off should continue to pay so that the poor are funded is seen as a sign of conservatism. Elsewhere in the world, it is the left which wants the rich to pay for services to the poor.

This is no isolated case in South Africa. Another example is electronic tolling (e tolls) in the country’s economic heartland, Gauteng. Vehicle owners, including companies, pay the toll. People who use busses and minibus taxis, the vehicles of the poor, don’t. Anyone suggesting that it’s fair to expect people who own trucks and busses to pay for roads on which poor people can ride for free is likely to be dismissed as a right-wing zealot.

How did the interests of wealthy students and their families, or the owners of vehicles, become those of the left and social justice campaigners? Around the world, the views of well-off groups are often presented as those of everyone. The South African oddity is that those who in other societies would be arguing against free passes for the affluent, argue for them.

To see why, we must look at the history of the campaign against minority rule, which I discussed in a book on radical thought.

Economic inequality versus race

The first campaigners for economic change in South Africa were socialists and trade unionists who immigrated from Britain. They took the standard left view of the time – racial divisions were created by bosses and other fat cats who hoped to hang onto their privilege by dividing the workers. Because both black and white workers were exploited, they argued, they could and should unite against their common enemy, economic exploitation.

Within a few years, the view that economic inequality mattered more than race was killed by striking white miners who, in 1922, added to a banner reading “Workers of the World Unite” the words and fight for a white South Africa’.

Competition for jobs from black workers was one reason the miners gave for the strike. For the next seven decades, white workers made it clear that the privileges which their whiteness offered were more important to them than their supposed common interest with black workers.

The view that race was more important than economic inequality was shared by those who fought against apartheid. Although left-wing activists, particularly in the South African Communist Party, were active in the African National Congress, they gave up early on the idea that race could take a back seat to the fight for economic change.

Racial equality versus private ownership

In the late 1920s, the Communist International, to which the communist party belonged, adopted the theory of “national democratic revolution”. It committed communists to fight against colonialism and racial domination in colonised countries – the battle against capitalism could wait.

In South Africa, this “revolution” which even today is seen by some on the right as a call to destroy the market economy, was always about fighting for racial equality, not abolishing private ownership. Those who complain that the ANC has not delivered on this “revolution” are saying it has not done enough to end white control of the economy, not control by private owners.

While the ANC often used left rhetoric, black intellectuals and activists, including those in the South African Communist Party, reminded white colleagues who wanted to emphasise economic inequalities that racial inequality was more important.

This view was shared by movements to the ANC’s left. Instead of denouncing it for fixating on race rather than economic divisions, they argued that apartheid was a form of “racial capitalism” in which racial and economic exploitation was so intertwined that one could not survive without the other. While this meant that they could fight against racism while claiming they were fighting for socialism, it made race the central issue.

The enemy was white minority rule

The South African left may have read different books and chanted different slogans, but it endorsed the mainstream view that the key issue was racial inequality. Left-wingers earned their credentials by fighting harder against racial minority rule, not by fighting for economic equality – and they found no shortage of left-wing theories and slogans to justify this.

This history has shaped thinking, ensuring that there has never been a strong lobby, or an influential body of opinion, stressing the interests of the poor. If the problem is racial domination, it follows that economic differences within racial groups matter less, if at all. And so, it seems natural to demand changes which would benefit the rich by lumping them with the poor.

Since this prompts people to endorse policies which are biased against the poor, this analysis might seem to be a warning against racial thinking on the economy. It is not. The reason why race has always mattered more than economic inequality is that it is more important: black scholars and activists who emphasise race do so because this squares with their experience not only under apartheid, but now.

The point is illustrated, again, by the student protests demanding free higher education. A careful look shows that they are essentially about race – the protesters are rebelling against what they see as a failure of higher education institutions to take them seriously.

Two decades ago, the left-wing scholar Harold Wolpe– who started his academic career trying to convince the ANC and South African Communist Party that apartheid was simply a product of capitalism but who changed his position when he recognised how important race is in South Africa – wrote a paper on higher education change. He argued that historically white universities were expecting black students to change to fit into their culture rather than changing to meet the needs of new students as the racial make-up of their student bodies changed. It’s this failure to accommodate black student needs which prompted the student slogan “Fees Must Fall”.

The history described here shows why it seems almost automatic to present this demand for racial change in an economic slogan which would again send the poor to the end of the line.

Steven Friedman, Professor of Political Studies, University of Johannesburg

This article was originally published on The Conversation.

Options on the table as South Africa wrestles with funding higher education

The storm clouds above South Africa’s universities could be dissipated with careful fiscal planning.
Reuters/Mike Hutchings

A report into the feasibility of offering free higher education at South Africa’s universities has finally been released. It has been nearly two years in the making, developed by a commission of inquiry that President Jacob Zuma set up in response to nationwide fee protests.

The lengthy report provides an accurate diagnosis of the state of higher education funding, as well as the problems it faces. But its proposed solutions are problematic. Many of its limitations arise from a failure to properly integrate an understanding of public finance and public economics into the analysis and recommendations.

The Commission’s report gets two critical things right – even though neither will please student activists. The first is that planned student numbers are simply too high and should be revised downwards. The second is that the country simply can’t afford free higher education for all students given its other priorities and weak economy.

But its recommendations are poor. Models are proposed that represent, I would argue, a significant step backwards from scenarios developed by the Department of Higher Education and Training two years ago. The department’s scenarios are indirectly supported in another report that’s just been released, by the Davis Tax Committee.

The tax committee endorses a hybrid scheme for higher education funding. This would retain and increase grants for poor students’ university fees. It would use loans to fund the “missing middle” – students from households that earn too much to qualify for government funding but still can’t afford higher education. If South Africa’s concern is really about immediate improvements in equitable access to higher education for poor students, this is the option that should be receiving the most attention.

The Fees Commission report

I have argued previously that one reason for the current state of affairs has been excessive student enrolment, relative to appropriate standards and adequate resources. Yet various policy documents propose rapid increases to enrolment in the coming decades.

The fees commission correctly argues in its report that these projected enrolment numbers are unrealistic. It points out that such high student numbers threaten quality and make adequate funding even more unlikely. It recommends that the numbers be revised downwards.

The commission also does well in recognising that – given the state of South Africa’s economy, public finances and other important government priorities – free higher education for all – or even most students – is simply not feasible or desirable. It rejects both the possibility of fully funded higher education and the demand for university fees to be abolished. But it endorses the abolition of application and registration fees, along with regulation of university fees.

There are three critical issues within the current student funding system.

1. What household income threshold should be used to determine student eligibility for support from the National Student Financial Aid Scheme (NSFAS) to ensure all students who need partial or full support are covered?
2. What resources are needed to ensure that all students below the threshold receive the adequate funding; up to full cost where necessary?
3. How should the support provided be structured in terms of grants versus loans, or combinations of these?

The commission errs in trying to address these questions.

A worsening of equity

The fees commission’s fundamental proposal in response to the demand for free higher education is the adoption of an income-contingent loan (ICL) scheme. Under this all students regardless of family income who register for university are funded by loans up to the full cost of study.

These loans would be from private banks based on guarantees of repayment from government. In other words, after a specified number of years either the student or the government would have to start repaying the loan. There are numerous problems with this model.

The ICL would, in some ways, constitute a worsening of equity. Poor students who currently qualify for NSFAS grants would now only get loans.

In the ICL scheme, either students pay or the government does. The current state of the higher education system suggests a significant number of students will not be able to repay such loans. But nowhere does the commission calculate the implications for future government expenditure.

A number of other proposals are seriously problematic. One involves extending the loan scheme to students in private higher education institutions. This constitutes a dramatic change in post-apartheid policy, potentially leading to indirect privatisation of the higher education system without proper consultation or sound basis for doing so.

Another is the suggestion that higher education expenditure should be benchmarked as 1% of South Africa’s Gross Domestic Product. This is wrongheaded because it does not take into account the proportion of young people in the country or the state of the basic education system.

The Davis Tax Commission’s report is more narrowly focused but, perhaps as a result, endorses arguably the best and most feasible way forward for tertiary funding.

Better scenarios

The current NSFAS threshold is R122,000, which means that students whose households earn less than this in a year qualify for funding by the scheme. There are two problems: first, not even all students below this threshold are getting all the financial support they need. Second, there are students in the “missing middle” who are above the threshold. They cannot fully fund themselves but have no access to support.

In 2015 the department of higher education and training provided rough estimates of the cost of raising the NSFAS threshold and fully funding students below the different, hypothetical thresholds.

It estimated that increasing the NSFAS threshold to R217,00 and covering full cost of study for all students below that would require an extra R12.3bil in 2016/17 for approximately 210,000 students.

The Davis Tax Commission effectively endorses this scenario, proposing a hybrid scheme that retains and increases grants for poor students and university fees, but uses income-contingent loans to fund the missing middle. It estimates that an additional R15 billion could be raised annually for higher education through a combination of increasing the rate of income tax for the highest earners by 1.5%; increasing capital gains tax for corporations; and, raising the skills levy by 0.5%.

In contrast, the commission’s proposals for raising funds for the loan scheme and other proposals – such as taking R50 billion from a surplus in the unemployment insurance fund for infrastructure investment – arguably violate some fundamental public finance principles and may be illegal.

The tax committee’s report suggests that the department’s scenario is feasible from a public finance perspective. If the government is genuinely concerned with creating maximally equitable access to higher education for poor students, this is the immediate option that should be receiving the most attention. The design and cost of a more modest income-contingent loan scheme for those students who are not covered, even with expanded support, will require detailed technical analysis and further discussion. Some related work has been done under the umbrella of a separate income-contingent loan initiative, the Ikusasa Student Financial Aid Programme, which could be useful. As the commission report notes in rejecting it, however, there are various concerns about the actual financial aid programme proposal that make it an unconvincing option at this stage.

The different all-or-nothing approaches being proposed by student activists and the fees commission risk the possibility of hundreds of thousands of poor and needy students not being assisted – even though the resources are available to do so.

Seán Mfundza Muller, Senior Lecturer in Economics and Research Associate at the Public and Environmental Economics Research Centre (PEERC), University of Johannesburg

This article was originally published on The Conversation.

South Africa should prepare for the worst case scenario: seeking help from the IMF

IMF Managing Director Christine Lagarde at the “G20: Compact With Africa”.
Reuters/Mike Theiler

Prudence teaches that societies experiencing difficult and uncertain times should hope for the best but prepare for the worst.

South Africa should take this lesson seriously. It is facing a serious crisis. South Africa’s economy is growing too slowly to address its profound challenges of poverty, inequality and unemployment. Social tensions are rising. Business is not transforming quickly enough. The governance and solvency of key state-owned enterprises (SOEs) are collapsing. Government finances are deteriorating. Credit downgrades may limit government access to finance. The institutions of governance are decaying. The complex political situation is paralysing policymaking.

Countries facing analogous crises of confidence like Nigeria, Poland and Turkey have had to seek IMF support.

South Africa can hope that the situation will improve. But it should also plan for the possibility that it will not and that confidence in the government’s ability to manage its deteriorating financial situation will evaporate. This will lead to both higher borrowing costs and reduced access to financing for the government and state owned enterprises. It could also lead to state owned enterprises defaulting on their debts and their creditors calling in their government guarantees. As government loses the ability to fund its operations, it will be forced to turn to the IMF. It is the one organisation that can help it regain access to financing – on condition that South Africa agrees to implement an IMF approved set of reforms.

No-one wants an IMF programme for South Africa. First, it means the government accepting an outsider, dominated by rich countries, overseeing its economic policies. Second, IMF support will be conditioned on the country agreeing to painful reforms such as:

• Reducing the government’s budget deficit and the current account deficit so that it can meet its financial obligations
• Deregulation and labour market reforms designed to encourage investment.

But if South Africa begins preparing for this possibility it may be able to mitigate its worst effects and be ready to exploit whatever opportunities it creates.

Negotiating with the IMF

The South African government has considerable experience dealing with the IMF, which regularly visits each of its member states to consult about the state of its economy— the most recent IMF mission visited South Africa in early November. However, it is over 20 years since South Africa negotiated a financing arrangement with the IMF.

Unless challenged, the IMF is likely to condition its financial support on a standard recipe of reforms. However, over time the IMF has become more amenable to supporting the programmes proposed by its member states. It has learned that, while there are similarities between macro-economic crises in different countries, there is more than one strategy for resolving such crises. In fact, the optimal solution depends on each country’s institutional arrangements, history, and particular economic, social, environmental and political characteristics. It also depends on the impact of macro-economic policies on such social factors as gender, equity and environmental and social sustainability.

Yanis Varoufakis, former Greek finance minister, reports in his book on his experiences negotiating with Greece’s creditors that countries like Poland, through careful planning and shrewd negotiations, were able to convince the IMF to follow their plan rather than the IMF’s standard approach. His book also shows that the cost of failing to prepare adequately for negotiations like these can be very high indeed.

So what should South Africa do to ensure that it gets the best possible deal?

First, South Africa must establish clear and realistic objectives for the plan that it wants the IMF to support. Second, it must get its diplomatic ducks in a row so that it can strike the best possible deal.

Fixing the budget

As a priority South Africa should focus on restoring a sustainable budget situation. This will require government to make some painful policy choices about levels of expenditures as well as the purposes for which funds are allocated.

The government can build confidence in these choices if it can show that:

• the benefits exceed the costs and that the costs are being equitably shared.
• Policy choices are based on both the human rights imperatives stipulated in the South African Constitution and on promoting growth.
• it’s serious about addressing the governance problems in state owned enterprises and government departments.
• it is complying with the legal procedures applicable to government finances and the open budgeting processes that it used in the past.

Finally, government must encourage other social actors – such as business and labour who have contributed to the crisis – to help mitigate the pain. A demonstration of broad support would help convince the IMF to support the government’s strategy.

Diplomacy

As Varoufakis’ experience shows, the cost of under-estimating the impact of international economic diplomacy on the outcomes of complex international financial negotiations can be unacceptably high.

The South African government must therefore prepare to sell its programme to the IMF. This requires it to appoint negotiators who have a good understanding of both the IMF as an institution and global financial diplomacy. They can make the South African case in the way that is most likely to convince the IMF staff and Board of Executive Directors to support the South African programme.

These negotiators should also seek to exploit all the benefits that South Africa can harvest from its membership in the institutions of global economic governance. For example, they can tap the experience and expertise of groups like the G24, a lobby group for the interests of IMF developing member states in which South Africa participates, to help it prepare for these negotiations.

They can also draw on the stores of information in international organisations like the IMF, the World Bank and the African Development Bank that have had extensive experience dealing with developing countries facing macro-economic crises. Access to this information should be a benefit of membership. The executive directors that represent South Africa at these institutions can help the government gain access to this information and, if appropriate, identify the relevant experts to consult.

Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of Pretoria

This article was originally published on The Conversation.