Corrupt state owned enterprises lie at the heart of South Africa's economic woes

Demonstrators march against corruption in South Africa.
Reuters/Mike Hutchings

The prevailing economic crisis sweeping through South Africa is a direct result of economic mismanagement largely shaped by the looting of state owned enterprises.

Many are in deep trouble. Sheer incompetence and corruption has pushed entities like South African Airways and the South African Broadcasting Corporation closer to financial collapse. Serious questions are being asked about the legality of multi-billion rand procurements at Transnet and the state power utility Eskom.

The scale of the problem has been brought into sharp relief in recent weeks by two developments that show corruption in state owned enterprises has been unfolding for years. The first was the release of a report written by academics: Betrayal of the Promise. The second was the leaking of 200 000 emails which point to dubious links between the Gupta family, senior politicians and officials.

The country stands to slip deeper into crisis unless the lust for loot is stopped. The economy is already in deep trouble. It’s in recession, and worse is to come. The second quarter GDP figures will reflect that a third rating agency has downgraded the country’s credit rating.

There are some indications that the tide may be turning but the job of reforming the state owned enterprises will have to go beyond just replacing board members. It must also focus on ensuring greater accountability financial responsibility, and performance management.

Unfortunately the severely fractured African National Congress (ANC) is incapable of reversing the slide. Instead, it’s more concerned with outsmarting the growing opposition to President Jacob Zuma’s rule suppressing internal rebellion, and maintaining the crumbling patronage network.

Unaffordable

The increasing inefficiency in state owned enterprises continues to put pressure on the country’s fiscus. This is not something it can afford. Ratings agencies have made it clear that they’re monitoring continuous bailouts and government guarantees. This is because they pose a serious threat to government’s fiscal balances and policy priorities.

Government guarantees to state owned enterprises stood at R467 billion at the end of 2015/16. Standard & Poor’s forecasts they will swell to over R500 billion by 2020 – 10% of South Africa’s current GDP. This is more than twice the government contingents in year 2015/2016.

These bailouts have weighed on the fiscus, pushing government debt into dangerous territory. Even before the downgrades South Africa’s debt burden was higher than other emerging markets. Moody’s forecasts that total government debt will reach 55% of GDP by 2018 and will continue to rise after that.

The reason government continues to bail out state owned enterprises is purely due to the fact that they are being managed badly.

The recent board and management scandals at the Passenger Rail Agency of South Africa, South African Broadcast Corporation, South African Airways and Eskom indicate that there has been little commitment to improve governance and address operational deficiencies. Instead some senior ANC officials claim that a call for reforms is anti-transformation.

The financial markets are increasingly unwilling to tolerate such excuses. This can be seen by the recent subscription failure of Transnet’s bond auction. And some private asset managers have become extremely cautious about lending money to public entities.

The way forward

The new Finance Minister Malusi Gigaba has so far failed to inspire confidence. Allegations that he is deeply mired in the web of scandals are not helping the situation.

Gigaba recently declared that state owned enterprises are functioning well and doing “great work”. This is surprising given the rot being revealed on a daily basis.

Nevertheless, the patronage network that stands accused of milking state owned enterprises has started to crumble. This includes the axing of Hlaudi Motsoeneng from the South African Broadcasting Corporation and Molefe from Eskom. Ben Ngubane has resigned as chairperson of the Eskom board.

There are also signs that public and private pressure is forcing some government ministers to take responsibility for their departments. Examples include Minister of Public Enterprises Lynne Brown, Communications Minister Ayanda Dlodlo and the Minister of Police Fikile Mbalula.

Nevertheless, the key implication of the Gupta emails is that reversing the deep damage inflicted on the country must start with reforming state owned enterprises. Reversing the rot will take decades. It should begin by ensuring that measures agreed last year are implemented.

These include:

• holding the corrupt public servants to account,
• closing loopholes in public procurement to ensure that history isn’t repeated, and
• appointing suitably qualified and experienced technocrats rather than unqualified politically connected individuals.

Finally, some state owned enterprises will need to be privatised. This is because they operate as monopolies in key sectors which is perpetuating gross inefficiencies. Only privatisation will end these distortions.

For many years, government has claimed that South Africa’s many challenges could be overcome by adopting policies of a “developmental state”. This would entail active state involvement in economic activity and using its resources to tackle poverty and expand economic opportunities.

But the ongoing revelations show that even before South Africa can consider becoming a developmental state, it will first have to root out the ingrained predatory state. Only then can investor confidence begin to be restored, recovery restarted and rating downgrades reversed.

Misheck Mutize, Lecturer of Finance and Doctor of Philosophy Candidate, specializing in Finance, University of Cape Town and Sean Gossel, Senior Lecturer, UCT Graduate School of Business, University of Cape Town

This article was originally published on The Conversation.

South Africa needs a sensible debate about its Reserve Bank. Here's a start

Stable food prices are a central issue for South Africa’s Reserve Bank. But should it be doing more to protect the poor?
Reuters/Siphiwe Sibeko

Debates on monetary policy in South Africa over the last couple of decades seem to have come from a madhouse. First, in the 1990s the country had old discredited Washington Consensus policies rammed down its throat. This was done with little regard for alternative progressive ideas and little or no democratic debate or public participation.

And then recently the country’s Public Protector, Busisiwe Mkhwebane released a report that made sweeping populist recommendations about the South Africa Reserve Bank. The report favoured revising the country’s constitution and a binding recommendation for a monetary policy regime that excludes any reference to price stability. A mandate like this simply doesn’t exist in any comparable country with a well-developed private banking system.

To put the report in context we want to focus on basic monetary policy principles that have been debated for centuries by serious thinkers and scholars. We also explore how South Africa can move the debate forward constructively and responsibly.

Broadly, thinkers on monetary policy can be considered on a scale with “sound money” advocates on the one side, and those concerned that money and banking must serve the productive economy – let’s call them “serve-society” advocates – on the other.

We locate ourselves unambiguously on the “serve-society” side of the debate. We agree with William Lowndes who served in the British Treasury in 1695, who said that money supply must serve society. Thomas Attwood in the 19th Century, John Maynard Keynes, the trade union leader Ernest Bevin and Hyman P Minsky in 20th Century, concurred.

Unlike Mkhwebane’s report, these economists, particularly Keynes and Minsky, understood that currency and money markets under capitalism have a nasty tendency to be unstable. That’s why the regulatory and lender of last resort function of the Reserve Bank is so vital. (When the operations of the inter-banking lending market cease to operate, the lender of last resort is the entity – usually a Central Bank – that has sufficient liquidity to lend to banks short of funds.)

The South African Reserve Bank has performed these roles moderately well for almost a century. The country hasn’t had a systemic banking crises since the formation of the Reserve Bank in 1921. Experts in the field Calomiris and Haber, 2004, find that South Africa is among the most stable top 13 banking systems in the world. The Reserve Bank should take credit for much of that.

That doesn’t mean that it’s beyond criticism which is why a serious debate is needed. The debate doesn’t need to rely on the ideas of fringe adventurers and crackpots. The country has a wealth of intellectual talent on monetary and central banking policy inside and outside its universities that straddle the ideological spectrum. The country’s public intellectuals in the unions and in civil society organisations have excellent ideas on central banking and monetary policy. Ordinary citizens should be drawn in too.

One thing is clear: things cannot remain as they are because so much is changing in the world of central banking and in economic life.

The two camps

Sound money thinkers tend to view banking as just another business, best left to the free market. Historically sound money economists have preferred deregulation of the banking system. But since the spectacular collapse of thousands of banks in many parts of the world in the 1930s, and the banking and financial crises after 2008 , very few now propose abolishing the lender of last resort function of central banks.

Sound money economists now want central bankers bound by rules, rather than allowing for discretion. But they still focus on the virtues of trade and private finance.

For their part, “serve-society” advocates worry about production, employment and growth.

Keynes – by no measure a crank or a crackpot – was very much in favour of adjusting monetary and fiscal policy where necessary. He was a passionate advocate of sound banking and financial regulation because he understood the inherent instability of capitalism. He warned that getting it wrong could massively increase poverty and unemployment.

In 1933 he proposed three safeguards when shifting economic policy priorities: Firstly, don’t be doctrinaire. Secondly, he maintained that “the economic transition of a society is a thing to be accomplished slowly”. And thirdly, don’t allow “intolerance and the stifling of instructed criticism”. For those not in public office he offered this final piece of advice:

Words ought to be a little wild – for they are the assault of thought on the unthinking.

A changing world

Conventional notions of what central banks are, and of what they should do, face a number of challenges. For example, the processes of technological innovation, including the growth of crypto currencies like Bitcoin, are rapidly reshaping some of the core functions of central banks.

And over the last three decades a number of economic factors have forced central banks to review their roles. They’ve had to do so to align their functions with other states in the wake of greater economic regionalisation, the creation of monetary unions and the establishment of regional central banks.

The events of 2008 also shook confidence in the ability of central banks to use their reputedly vast capacity and skills to predict and head off the crisis. This has been particularly true as far as their regulatory responsibilities to promote financial stability are concerned.

As pointed out by Princeton Professor and former deputy-Governor of the Banque du France, Jean Pierre Landau, a return to the status quo ante in respect of central bank policy is neither desirable nor indeed feasible.

Despite this warning the status quo ante is being defended all over the world as if nothing has changed, and as if all is well in our economies.

Let the debate begin

After the release of the Public Protector’s report the Governor of the South African Reserve Bank, Lesetja Kganyago, offered the potential space to begin a serious debate about South African monetary policy aimed at creating a more inclusive and prosperous society and economy.

But, he warned, such a discussion would have to be based on “evidence and sound analysis”.

In our view ideas must come from across the ideological spectrum. And they must be debated in legitimate and properly structured forums. One place to begin the discussion would be Parliament’s Portfolio Committee on Finance.

Other structures – such as the Reserve Bank’s Monetary Policy Forums (as proposed by the governor) and forums led by business, labour and civil society organisations as well as universities – need to keep up the momentum.

There must be no place for defensive postures, arrogance or condescension. The debate must be guided by one overriding objective: to improve the quality of life of the many South Africans for whom the end of apartheid has brought no real material change? It must consider the impact of change on employment, investment and growth.

Vishnu Padayachee, Distinguished Professor and Derek Schrier and Cecily Cameron Chair in Development Economics, School of Economics and Business Sciences, University of the Witwatersrand and Bradley Bordiss, PhD candidate Development Economics, School of Economics and Business Sciences, University of the Witwatersrand

This article was originally published on The Conversation.

Why communism appears to be gaining favour in South Africa

South African Communist Party general secretary and South Africa’s higher education minister Blade Nzimande addresses the party’s 3rd special congress in Soweto in June.
Sowetan/Vathiswa Ruselo

The South African Communist Party reported an upsurge in membership at its recent 3rd special congress. Its membership now stands at about 220 000.

Does this indicate that the Left is gaining momentum or is it only a cyclical spike?

The SACP’s membership has gone through cycles over the years reflecting important political developments (see table below). A comparison suggests that these figures are still relatively small weighed against those of its partners in South Africa’s governing alliance that brings together the communist party, the Congress of South African Trade Unions (Cosatu) and the African National Congress, which leads the alliance.

Cosatu had 1.9 million members before its biggest affiliate, the metals union Numsa, with 300 000 members, was expelled in 2014. The ANC passed the one million mark in 2012.

The SACP, formed in 1921, is the oldest communist party in Africa. It is one of only 20 parties which survived the anti-communist purge after independence. Many other parties, like the Popular Movement for the
Liberation of Angola and Mozambique Liberation Front, officially changed their party ideologies in the 1990s from Marxism-Leninism to Social Democracy.

But the SACP continued to be Marxist-Leninist. It is the only communist party on the continent which is part of a governing alliance, similar to those in Brazil, Venezuela and Nepal in recent years.

Membership trends

Changes in SACP membership figures after its unbanning in 1990 and its decision to become an open party went through at least four periods.

• The first was between 1990 and 1996 with an influx of new members, motivated by the SACP’s success with getting the ANC to adopt the Reconstruction and Development Programme (RDP), and its prominence in the first post-apartheid cabinet led by former President Nelson Mandela.
• The second period was the demise of the RDP and appearance of Growth, Employment and Redistribution (Gear) as a neoliberal macro-economic policy. The ANC leadership regarded it as “non-negotiable” and in the process then South African Deputy President Thabo Mbeki started to marginalise the SACP and Cosatu. Arguably, its marginalisation within the alliance can explain the decline in membership between 1995 and 2002.
• The third period was during President Mbeki’s last term when membership started to increase, presumably because his deputy, Jacob Zuma, solicited the SACP’s support against Mbeki. The expectation was that a Zuma government would restore the SACP’s prominence in government. Zuma’s victory at the ANC’s 52nd national conference in Polokwane in 2007 solidified it.

Five years later the SACP entered the fourth period at the ANC’s Mangaung national conference. Arguably it reached the 150 000 mark partly because of the ANC’s perceived shift to the right with the adoption of its new long-term macro-economic plan, the National Development Plan. The SACP gained support by opposing the plan. This attracted those who had formerly been part of Zuma’s “Polokwane alliance” but were increasingly unhappy with the President.

Organisational problems in the ANC and corruption scandals diverted attention away from a policy turn to the left. Alternative leftist moves were made in 2012-2015 by the Economic Freedom Fighters and the left in Cosatu. It is possible to argue that the same trend to the left is happening in the alliance in the form of a decline in ANC public support - evident in the 2014 elections - and an increase in SACP membership.

Despite its recent difficulties with President Zuma, the SACP has had a resurgence of influence under his administration. At the moment Senzeni Zokwana, Thulas Nxesi, Blade Nzimande, Jeff Radebe and Rob Davies are ministers while Jeremy Cronin, Godfrey Oliphant and Buti Manamela are deputies. They all serve as examples that the SACP is an access point to government.

The rise in membership could be attributed to the fact that it is seen as an alternative option for a political career.

Official explanation

SACP second deputy general secretary Solly Mapaila ascribed the growth to success with its campaigns, notably that aimed at restructuring the country’s financial sector.

Also, he said, some new members felt more comfortable to express their activism and criticism of corruption in the SACP than in the ANC. Between the lines it suggests an anti-Zuma sentiment, albeit not shared by most national leaders.

Fault-lines and frustrations between the SACP and the ANC are evident. There is open friction between it and the ANC in Mpumalanga province. In addition, the Young Communists League has taken an openly critical stance towards the ANC.

The idea that the SACP should break away from the ANC and stand as an independent political entity has once again emerged. Some delegates at the special congress called on the SACP to contest elections separately from the ANC in 2016. The issue also surfaced in 2008 at its National Policy Conference.

Several motivations for such a call are possible: a perception that the SACP leadership have been co-opted by President Zuma and his government. There have also been accusations that the Zuma government is no longer pro-worker and pro-poor. This is especially so in the light of Marikana massacre in 2012 and government’s minimalist response to the findings of the Marikana Commission of Inquiry.

The government has drawn flack for policies considered to be neo-liberal and that socio-economic inequality and poverty are increasing under the current government.

The thinking wing of the party

The party retains a cache. There is still prestige attached to it as the governing alliance’s “thought leader”. Deputy President Cyril Ramaphosa referred to it as such at the SACP’s latest special congress. He continued:

Throughout the years, the SACP has played a critical role in the ideological development of the liberation movement. Its contribution to the revolutionary theory of two stages and their notion of apartheid as a “colonialism of a special type” are a few examples.

Activists with a strong ideological inclination will be more attracted by the SACP than by the ANC. Being associated with it has its own pull factors, including the lure of intellectual sophistication.

The SACP’s growth is therefore symptomatic of several factors of which frustrations in the alliance are possibly the most important.

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

This article was originally published on The Conversation.

ANC conference: governing party blew chance to regain South Africa's trust

South African President Jacob Zuma closing the governing ANC’s policy conference.
EPA/Stringer

The 5th policy conference of South Africa’s governing African National Congress
started on an ominous note. The party’s stalwarts had opted to stay away because they wanted the party to call a consultative conference first to focus on the organisation’s problems. The ANC’s leadership refused.

In fact, their call infuriated President Jacob Zuma. He mocked them in his opening address. The stalwarts – who include luminaries such as Frank Chikane, Sipho Pityana and Cheryl Carolous – are viewed by some as the link to the progenitors of the liberation struggle. Could their stay away spell a curse?

By the end of the conference Zuma appeared buoyed, dubbing the conference a success in his closing address. But, a success in achieving what? This question is pertinent because the conference came amid growing public discontent about the way the country is run, intensified by adverse assessments of rating agencies as well as the fact that the economy is in recession.

Are the outcomes of the conference likely to assuage the consternation about the future of the country? Can they in anyway contribute towards extricating the country from the morass it’s in? Or, are South Africans simply grasping at straws by asking these questions?

Losing leadership of society

The ANC appears to have lost claim to being a leader of society. Just before the 2016 local government elections, its own research pointed to an increasing “trust deficit”: less than 50% of respondents saw the ANC as a leader of society. This is an ignominious indictment to a once glorious movement. Isn’t that perhaps where the focus should have been at the conference - regaining people’s trust by taking them along in the policy discussions?

An opportunity for this was missed as the policy discussion was contrived as an ANC affair. This is odd for a governing party. Its existence ought to be anchored in society and should always pursue the public interest. As the American senator Elizabeth Dole once put it:

The best policy is made when you are listening to people who are going to be impacted. Then, once policy is determined, you call on them to help you sell it.

The policy conference didn’t reflect this character. The ANC’s policy deliberations were held in closed sessions. The media wasn’t allowed in. Only snippets were presented to the public. Media reports depended on press briefings and interviews. The ANC was largely talking to itself.

Being a leader of society is a function of making people part of the process of how the party intends to lead. And it should always be amenable to the views that emanate from society, not only from its members. The ANC is not just a political organisation or a liberation movement. It is a governing party. How it responds to its responsibility of governing is the business of South Africa’s 55 million citizens.

A delegate at the ANC’s 5th National Policy Conference.
Reuters/Siphiwe Sibeko

An elitist approach to policy disengages society. Society only reacts to the outcomes of policy discussions if it’s not engaged in dialogue. This spawns antagonism as democracy is fudged in the process.

The consequence of this is a “trust deficit”. This is where the biggest danger lies. A “trust deficit” questions the very legitimacy of the ANC.

Vacuous discussions

The ANC’s gatherings are no longer moments to assert the significance of pursuing societal interests. As presidential hopeful Lindiwe Sisulu put it:

The (policy) conference was not about issues, it was about which side is pushing which issue.

Was it, therefore, choreographed machinations to gauge the preferences of the branches in the presidential race? One is inclined to think so, especially in the context of Zuma’s remarks at the end of the conference in which he proposed that whoever loses the race to be president should automatically become the deputy president of the party.

This proposal is outrageous. It accepts factionalism as part of the ANC’s organisational makeup. It seeks to institutionalise and accommodate factionalism rather than expunge it. Is this perhaps what the president was referring to when he spoke of success?

The other disturbing part of the conference was that vulgarity held sway while sanity was heckled and shouted down, scorned as proxy for white monopoly capital.

The truth is that white monopoly capital is a dishonest narrative. Coupled with the narratives garbled in rhetoric on the radical transformation of the economy and land reform, white monopoly capital is nothing more than gesticulation of populism bereft of ideological context. In the meantime gluttonous politics is in ascendance. State power is contested for nefarious ends.

Where does this leave the historical mission of the liberation struggle which is about

uplifting the quality of life of all South Africans, especially the poor, the majority of whom are African and female.

Joel Netshitenzhe, a member of the national executive committee of the ANC, came closest to providing an answer. He went to the subterranean dimension of the debate on the transformation of the economy in pointing out that “white dominance in the economy” is a manifestation of a problem, which is “monopoly capital”.

To use the phrase “white monopoly capital” is to reduce the policy debate to polemics and to spawn untenable interventions. As Netshitenzhe further explained:

[the] relationship between the ANC and monopoly capital in particular, but also capital in general, is one of unity and struggle, or if you like, cooperation and contestation.

This irked the proponents of the white monopoly capital narrative who responded by displaying vacuousness and a lack of analytical depth on policy matters.

It appears as if the contestations in the conference hardened attitudes instead of facilitating policy choices. They intensified policy stalemate. This is perilous to South Africa. Outcomes of the policy conference don’t offer much to write home about. What they did do was to set up the ANC’s December 2017 elective conference for an internecine and bruising jostling for power.

Mashupye Herbert Maserumule, Professor of Public Affairs, Tshwane University of Technology

This article was originally published on The Conversation.

Why did Hout Bay explode?

Imizamo Yethu is an example of the complexity of upgrading informal settlements

By GroundUp Staff
11 July 2017

Temporary housing for Imizamo Yethu residents on a sports field in Hout Bay. Photo: Ashraf Hendricks

In the first days of July, Hout Bay was at times cut off from Cape Town when hundreds of residents of the Imizamo Yethu informal settlement cut down trees and barricaded roads leading into the suburb. Police and residents fought with each other. One man, Songezo Ndude, was shot dead. The protesters had been living in temporary accommodation on a sports field. We look at what caused this.

On 11 March a devastating fire in Imizamo Yethu left several thousand people homeless. It was one of the worst shack fires in recent history in the Western Cape, but it was neither the first nor the last in Hout Bay.

Fire is a constant risk in Imizamo Yethu. It spreads rapidly because homes are built close together, often less than one metre apart. Fires are common where residents do not have electricity and therefore use paraffin, candles and open flames, or where electrical connections are illegal and unsafe. It is often impossible for emergency vehicles to get to positions where they can douse fires.

Reblocking

Other than providing formal brick housing, another solution the City proposes is “reblocking” (explained here) – creating a formal layout on an informal settlement with spaced plots, services, access roads and pathways. The City has done this successfully before but it isn’t easy, and each informal settlement presents unique challenges.

After the fire, the City announced plans to “superblock” Imizamo Yethu. It committed over R90 million to the project and an additional R44 million for electrification. The problem was that for reblocking to take place, people who had lost their homes would have to wait longer before they could rebuild their shacks.

In April, Mayor Patricia de Lille announced that the community had agreed to the plans. She said at a press conference held with community leaders that reblocking would be done in three months. But even as she said it, some residents had already begun rebuilding their shacks, making it impossible to proceed with reblocking.

Starter kits for rebuilding wait at Imizamo Yethu for rebuilding after reblocking is done. Photo: Ashraf Hendricks

Temporary accommodation

From the outset there were mixed reactions to the City’s plans. Many residents supported reblocking, but others faced difficulties while reblocking took place. Victims of the fire were moved to temporary relocation areas – accommodated in tents, two marquees, community halls and other temporary structures.

Some people refused to be moved to these places, which they found crowded and uncomfortable. They chose instead to find shelter on the mountain or rebuild their shacks.

After the April press conference, people were moved out of the marquees and into temporary one-room, three-by-three-metre shacks on a sports field. Many of them were renting shacks, and they were now registered with the City to get shacks of their own.

On top of this, many residents do not trust the City to reblock in an acceptable timeframe. Community leaders say people who were moved to community halls after a fire in 2004 spent a year there before they gave up on being resettled, and rebuilt their shacks. GroundUp spoke to a resident who was moved to make way for roads in 2007. He says he and his family were moved to a temporary home and told it would be for only three months, then later told six months. They have never been relocated.

A map showing the different areas of Imizamo Yethu. The sportsfield Photo courtesy of City of Cape Town. 

Rebuilding, demolitions and interdicts

In the first days after the fire on 11 March, some shack owners started to rebuild. The City immediately responded with demolitions. On 19 March the City obtained a court interdict against people rebuilding their shacks. Residents continued rebuilding nonetheless. Members of the community did not in the end oppose the interdict, and it became a final order of the High Court on 1 June.

The City did not enforce the interdict while it was engaging with the community.

Some residents did agree to stop rebuilding and kept to this. However, in Madiba Square area of Imizamo Yethu, there were some demolitions with voluntary dismantling in late March. Part of this area was then reblocked.

Others however wanted the City to present clear plans on paper with timeframes and a memorandum of agreement. These were not forthcoming and so they rebuilt. By the end of May, the area for reblocking was almost completely filled with shacks.

Differences

Divisions in the community for and against the reblocking, but more specifically on how it is to be implemented continue.

Immigrants who live in the settlement were also wary of how they might be treated in the City’s formal process.

Many of the people displaced by the fire are already listed as beneficiaries for the Imizamo Yethu housing development project. Some of them have large shacks and rent out space or rooms in their shacks. Beneficiaries of the housing project want it completed before reblocking takes place. Then, when they are moved to their RDP houses, they will give up their shacks.

The people who have been renting from them will then be resettled in the informal settlement, but this time with it having been reblocked. This latter group (who rent shacks) appears to make up most of the people who have remained in temporary houses provided by the City, and not rebuilt.

Residents from Imizamo Yethu wait for Mayor Patricia de Lille to arrive after protesters demand to see her in person. Photo: Ashraf Hendricks

Protests erupt in July

Since the City obtained its interdict on 19 March and the mayor announced reblocking on 13 April, only a small section of Madiba Square has been reblocked.
Many people expected the City to act on the interdict and commence demolitions after 1 June, but the City did not act.

Frustration over delays in reblocking and anger about the absence of a memorandum of agreement with the City bubbled over in July. Protesters said they were tired of having to live in temporary shelters with seemingly no end in sight. They had also had to endure an awful Cape Town storm while in the temporary shacks. They took to the streets in violent protests.
The Mayor then recommitted the City to accelerating reblocking.

But to do this, the City will have to relocate or persuade over a thousand people who have signed a petition against being moved, and remove or demolish the hundreds of homes that have already been rebuilt.

A showdown is looming. Zara Nicholson, spokesperson for the mayor, says: “It has become necessary to enforce the … interdict due to the intimidation, threatening, harassing and assaulting of persons on site working on the super-blocking … There has been and will be further engagement with affected persons. If engagement fails, we will proceed with an eviction application.”

The City has made mistakes in the reblocking process. Residents remember unfulfilled promises. But the multitude of un-nuanced tweets and Facebook comments condemning either the City or the protesters show a lack of understanding of how complex and frustrating the situation is for all involved.

A mother and children walks through Imizamo Yethu as riot police monitor the settlement. Photo: Ashraf Hendricks

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Published originally on GroundUp .

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