South Africa's economy is in a mess. New finance minister must hit the road running

South African President Cyril Ramaphosa, left, introduces the country’s new Finance Minister, Tito Mboweni, in Cape Town.
Phando Jikelo/African News Agency(ANA)

The latest reshuffling of South Africa’s finance minister, following the resignation of Nhlanhla Nene and appointment of Tito Mboweni, may have negative origins but it brings with it some positive energy.

Nene resigned as finance minister after it emerged that he lied about the nature of his contact with the controversial Gupta family, the friends of former President Jacob Zuma who stand accused of championing massive misappropriation of public funds in a process branded as state capture.

In an initial response to a journalist’s question, Nene claimed that he had only met the Guptas in passing. But in his recent testimony to a commission investigating state capture he admitted that he’d met Gupta family members on numerous occasions, including a number of visits to their house and their offices.

The inconsistency tarnished his integrity and sparked massive public criticism. Within a week of making his admissions he resigned. South Africa’s President Cyril Ramaphosa immediately appointed former South African Reserve Bank governor Mboweni as the new finance minister.

On the one hand Nene’s departure must be hailed as setting a new tone for South African politicians, particularly for the cabinet. By falling on his sword, he has taken responsibility for his actions – a rarity in South African politics. It’s tempting to cast his action in stone as the “Nene Rule” that sets a standard for politicians to resign when in the wrong.

On the other hand the appointment of Mboweni brings back someone with considerable skills and the political finesse needed to steer South Africa out of its current economic quagmire.

Mboweni needs to hit the ground running. In late October he must present the country’s medium term budget policy framework. All eyes will be on how he steers the challenge of rebalancing the national budget. His political skills and ranking might come in handy.

Equal to the task

Mboweni takes over the finance portfolio at a difficult time. Tough decisions will be required in a hostile environment as a strong populist wave sweeps through the ruling party, the African National Congress (ANC).

It’s therefore a positive that he commands a more senior political ranking than Nene had within the ANC. Mboweni claimed the 11th position in the tallying of the votes for the ANC’s National Executive Committee (NEC) during the ruling party’s 2017 elective conference that made Ramaphosa the President. The NEC is made up of 80 members and is the ANC’s highest decision making body between conferences.

In addition to this, Mboweni has a strong financial background. He served as governor of the South African Reserve Bank from 1999 to 2009. Prior that he served in Nelson Mandela’s first cabinet as minister of labour.

Both experiences should help equip him to meet the economic challenges facing the country. There’s no doubt that he’s knowledgeable about financial matters and is respected among investors.

His tenure at the Reserve Bank should ensure a smooth working relationship between the minister of finance, the national treasury and the central bank. As a previous governor, Mboweni understands this important relationship while valuing the autonomy and the independence of the various institutions and their responsibilities.

High expectations of Mboweni

Mboweni will need to be a quick study. He has only two weeks in which to familiarise himself with the details of the medium term budget.

He can’t afford to disappoint. This year’s budget will be watched more intensely than usual by key stakeholders, including investors and credit rating agencies because it follows closely on an economic stimulus and recovery plan announced by Ramaphosa. Details are expected to be unveiled in the medium term budget.

The medium term budget is also expected to signal how South Africa is dealing with its fiscal challenges. This is where government faces its very hard choices.

The ultimate aim must be to increase economic growth and eradicate unemployment. But to achieve these objectives the government must revise its expenditure priorities.

Expenditure on civil service remuneration, social grants and interest on government debt currently equates to 70% of the government’s tax revenue. This is clearly untenable. If not addressed, South Africa will face a fiscal cliff – the point at which these three expenditure items account for all government revenue and make spending on anything virtually impossible.

At the same time, Mboweni will have to work closely with Pravin Gordhan, the Minister of Public Enterprises, on the restructuring of state-owned enterprises. The precarious financial position of a number of state-owned enterprises is placing a heavy burden on taxpayers. Removing this burden will release resources that can be used to stimulate the domestic economy. Mboweni must therefore help with tough decisions about unaffordable vanity projects.

And, finally, Mboweni must sort out the challenges facing the Public Investment Corporation which is responsible for managing civil servants’ pension funds and is worth over R1,5 trillion.

Restoring trust

South Africa is in serious economic difficulty. It also faces a trust deficit owing to the state capture project of the Zuma administration. The golden triangle of trust between the government, the public and the business community has been broken. No country can succeed without this. Mboweni can play an important role in restoring it.

Jannie Rossouw, Head of School of Economic & Business Sciences, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license.

Moral courage and decency irrelevant as South Africa's finance minister resigns

Nhlanhla Nene’s departure means that South Africa has had six finance ministers in four years.
GCIS

South Africa’s once-lauded, lately beleaguered Finance Minister, Nhlanhla Nene, has had his resignation accepted by President Cyril Ramaphosa. His successor, Tito Mboweni, becomes the country’s sixth finance minister in four years.

The President is desperately trying to dig South Africa out of an unholy mess created by his predecessor Jacob Zuma and his multiple cronies in and out of the governing African National Congress (ANC). The particularly odious Gupta family have loomed large in what a succession of research projects, commissions of inquiry, books and investigative journalism projects, have labelled state capture.

Nene was formerly regarded as “clean”, having been fired by former President Zuma for refusing to fund his more ludicrous rent-seeking projects. He was replaced by Des van Rooyen for a weekend, and then left in the cold while Pravin Gordhan became Finance Minister (before in turn being fired by Zuma). Nene was rehabilitated by Ramaphosa – who defeated the entire Zuma strategy by winning the ANC (and then national) presidency. Nene’s reinstatement as Minister of Finance was widely regarded as both politically astute and market-friendly.

But then Nene dropped two bombshells: one, that he had met the Gupta brothers at their homes and offices between 2010 and 2014, but had not shared this with Ramaphosa; two, that he had refused to sign off a nuclear deal with Russia that would have simply broken the country financially for decades to come.

And now he is gone.

Did anyone pause to reflect on the fact that after a decade of impunity, this was an act of decency and moral courage? Ignore the party colours, and look at the human being. That is clearly a test all South African politicians failed abysmally. If they have a conscience they clearly forgot to dust it off and use it.

Widespread guilt

Almost by definition, anyone who is found to have past dealings with the Guptas – themselves now safely ensconced in mansions abroad – is unclean. And by definition that includes huge swathes of the political and business classes, whom the Guptas seem to have variously seduced, corrupted, cajoled, threatened or by-passed, depending on the strength of character at stake.

The brilliance of their state capture project – laid out recently by the investigative journalists as well as various academics – is a roll-call of virtually every senior political figure in South Africa, alongside many business elites.

Some stood up – but a great many folded, seduced by cash or a crass Sun City family wedding invitation or rotten contracts.

Many are in parliament, some are in civil society, others in the private sector – including the consultancy firm KPMG, and UK-based now defunct PR company Bell Pottinger – and elsewhere. Not all are sitting on ANC benches. Perhaps that is why the President had no option but to remove Nene. Politically, the liability was too great as an election approaches – national elections are due next year – and none are so shrill as those with something to hide.

Nene went to the Zondo Commission into state capture and ‘fessed up. Yes, he had met the Guptas. No, he had not taken bribes (well, he would say that, right?). Yes, he had been put under immense pressure to sign off on the nuclear deal which would have opened South Africa’ coffers to looters. Yes, he refused to sign, and was fired.

Remarkably, he had not told Ramaphosa about the earlier meetings with the Guptas. But, he took responsibility – unlike the lies and bluster of others caught in the act. Nene said to South Africa:

In return for the trust and faith that you have placed on me, I owe you conduct as a public office bearer that is beyond reproach. But I am human too, I do make mistakes, including those of poor judgement.

This was followed by his offer to resign. This is accountability and decency.

Lacking empathy

In any version of the world, this was a man seeking an honourable redemption. He acknowledged his own mistakes, sought forgiveness, and asked to be relieved of the trappings of office for which so many continue to drool and slobber.

Were there questions to be asked? Absolutely.

But what did he get in return? The Economic Freedom Fighters (EFF), whose leadership has repeatedly been accused of corruption, leapt to the offence, claiming Nene was “corrupt as hell” and promising to release more compromising details – which are yet to appear. The opposition Democratic Alliance (DA), desperately seeking the front foot it has lost since Ramaphosa’s ascendancy, demanded Nene’s axing and wanted other possible conflicts of interest investigated.

Empathy is the ability to understand or feel what another person is experiencing from within their frame of reference. In simple terms, to put yourself in their shoes. It is singularly lacking in politics – from Trump mocking abuse survivors to South Africa today. Shout down the other side, win by volume and crassness, see honesty as weakness, but above all win – nothing else seems to matter.

Not one politician had the decency to say ‘that was a decent thing to do.’ The lack of empathy was deafening. A lack of empathy is part of narcissistic personality disorder – an inability or refusal to identify with the feelings of others. This is a rather neat description of politicians, confirmed repeatedly.

If politicians see only personal advantage, especially from the ‘weakness’ of others – weakness defined here as honesty, seeking forgiveness, repentance – then the future is bleak.

But to all those self-serving, smug TV chasing politicians and others, whose own meetings with the Guptas, or other corrupt activities, have yet to come to light, remember one aphorism: people who live in glass houses shouldn’t throw stones.

David Everatt, Head of Wits School of Governance, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license.

Survey shows a majority of South Africans support land reform

Support for land redistribution tends to be stronger among economically disadvantaged South Africans.
EFE-EPA/Kim Ludrick

Unequal access to land in South Africa continues to prevent citizens from enjoying human dignity, rights and security. The ongoing debates and recent public hearings about land reform policy in the country are therefore crucial from a justice and development perspective. In deciding on the future direction of land policy, the views of citizens must be taken into account.

Land reform policy in South Africa has three core elements: restitution, redistribution and tenure reform. Restitution consists of claims for monetary compensation or the return of land that was forcibly taken away following June 1913. Land redistribution involves obtaining and transferring land to black farmers for various purposes. Lastly, tenure reform focuses on land rights for those whose rights are insecure due to past discrimination.

A review of the Human Sciences Research Council’s South African Social Attitudes Survey revealed certain trends in thinking about land reform over the years. The HSRC has been conducting this survey annually since 2003, tracking social, economic and political values among a representative sample of South Africans.

The survey analysis shows that over the past 15 years, most South Africans have supported the idea of land reform in principle. But the support isn’t commonly shared across social groups. And support for the policy isn’t matched by satisfaction with the government efforts in practice. This has implications for the degree to which land policy choices are likely to be contested, as well as for political pressure to respond to public expectations.

The participants were asked:

To what extent do you agree or disagree that government should redistribute land to black South Africans?

Answers were recorded using a 5-point agreement scale.

Robust support for land reform

The graph in Figure 1 presents national trends based on the land reform question. It shows a generally consistent pattern in public preferences for land reform since the early 2000s. Over the period, an average of 67% of South African adults favoured land reform. The support ranged between a low of 62% and a high of 72%. In contrast, around a fifth of South Africans voiced opposition to land reform (19% on average, ranging from 17% to 22%), a tenth (11%) were neutral, and just 3% were uncertain.

Figure 1: Support for land reform in South Africa, 2003-2017 (%)

HSRC South African Social Attitudes Survey (SASAS) rounds 1-15, 2003-2017

A slight upswing in support has occurred since 2013. This possibly reflects the growing prominence of the issue in political discussion and a sense of urgency around addressing the land question.

How unified are South Africans?

While two-thirds of South Africans favour land reform in principle, support tends to follow lines of race, class and political party identification.

Table 1 presents all-year averages (combined data covering 2003-2017) based on gender, birth cohort, population group, educational attainment, subjective poverty status and type of geographic location.

Age doesn’t appear to have a very strong influence on people’s opinions, though younger people are slightly more inclined to support land reform than older adults. Neither is gender a significant factor.

Table 1: Support for land reform among South African adults on average between 2003 and 2017 (row %)

Note: The percentages in the table are based on combined data over the 2003-2017 period, meaning that the results should be interpreted as all-year averages.
HSRC South African Social Attitudes Survey rounds 1-15, 2003-2017

Race, as defined by South Africa’s previous system of classification, is a factor in the results: 79% of black African adults support land reform compared to slightly over a quarter of coloured and Indian adults and only 18% of white adults. To some degree this is informed by differences based on social class.

There is also a 20 to 25 percentage point difference in support based on educational status, subjective poverty status and geographic location. Support for the idea of land redistribution therefore tends to be stronger among economically disadvantaged South Africans. Politically, support for land reform is similar (79%) among supporters of the ruling African National Congress, which has been in power since 1994, and the Economic Freedom Fighters, a more left-wing party established in 2013. But the divide between these groups and supporters of the official opposition party, the Democratic Alliance, is more than 50 percentage points. This is likely to reflect a combination of individual preferences, societal position as well as party positions on land reform.

The survey findings show that there continues to be opposition to land redistribution among a significant minority. The fact that this opposition is more apparent among elites and the historically privileged means that policy proposals that challenge the status quo are likely to remain highly contested.

After nearly 25 years of post-apartheid land reform, a significant gap remains between support for land reform and evaluations of government performance in this area. South Africans rate progress in the implementation of land policy in a harsh light. This discontent with performance is more even shared across social groups.

When the last survey was undertaken in late 2017, only 21% of adults were satisfied with government’s progress in carrying out land reform. Satisfaction fluctuated between 21% and 32% over the 15 year history of the survey. Current levels of satisfaction are lower than ever before, which may partly explain why this policy issue has once again come under the spotlight. People are looking for new approaches that may get better results.

Figure 2: The gap between support for land reform and evaluations of state progress, 2003-2017 (%)

HSRC South African Social Attitudes Survey (SASAS) rounds 1-15, 2003-2017

The trends in the HSRC survey also point to the polarising nature and complexities associated with land debates.

Despite such evidence, a fuller, more nuanced examination of land reform attitudes and policy preferences and how they are changing over time is required. This should take into account current and envisaged policy considerations, such as expropriation, compensation and constitutional amendment.

Jare Struwig, Chief Research Manager, Human Sciences Research Council (HSRC), and Thobeka Radebe, a researcher in the HSRC’s Democracy, Governance and Service Delivery unit, contributed to the research.

Benjamin Roberts, Chief Research Specialist and Coordinator of the South African Social Attitudes Survey (SASAS), Human Sciences Research Council and Narnia Bohler-Muller, Executive Director of the Democracy, Governance and Service Delivery Programme at the Human Sciences Research Council and Adjunct Professor of Law, University of Fort Hare, University of Fort Hare

This article is republished from The Conversation under a Creative Commons license.

South Africa’s white right, the Alt-Right and the alternative

South Africa’s far right never had a big support base, even under apartheid.
Kim Ludbrook/EPA

There has been a global rise in populism, especially of the right wing variety. In South Africa this has manifested in the increasingly strident Afriforum. This pressure group purports to advance the rights of Afrikaners, the ethnic group most closely identified with the former apartheid regime.

The prime ministers and presidents who ran the country from 1948 until 1994 were all Afrikaners.

Afriforum is usually ignored outside of Afrikaner ranks. But it attracted the ire of South Africans more broadly when two of its leaders, CEO Kallie Kriel and his deputy Ernst Roets, undertook a mission to the US in May this year. Their aim was to convince alt-right figures that white farmers were being targeted for murder.

Afriforum’s Ernst Roets on Fox News.

Roets even secured an interview with Fox News’s Tucker Carlson. The interview on the right wing broadcaster apparently inspired US President Donald Trump to tweet that his administration will investigate the “large scale killing of (white) farmers” in South Africa.

Afriforum calls itself a “civil rights organisation”. Until recently its primary approach was to use the country’s human rights based constitution to launch court cases in defence of white Afrikaans speakers and, at times, of black people amenable to its agenda.

But it has since become the face of white denial about the past, and of defiance of the need for redress in the most unequal country in the world. Afriforum has successfully translated a growing resentment about the loss of Afrikaner control of the state into a political project.

State capture

During the last decade of the country’s 24-year-old democracy a form of Schadenfreude has emerged among white rightwingers. State capture, in the shape of massive corruption, and factional infighting in the governing African National Congress (ANC) have harmed state capacity. Multiple political, economic and constitutional crises have in the minds of white rightwingers confirmed their racist narrative that “black people can’t govern”.

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Read more:
How the law can help change racist minds in South Africa

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An increase in public expressions and incidents of racism suggests a return to an intransigence that’s unapologetic about continuing white privilege and colonial and apartheid abuses. A more antagonistic Afriforum stepped into this moment rife with political opportunity.

Its politics is a cunning combination of Afrikaner nationalist mobilisation from the past with contemporary neoliberal elements and alt-right rhetoric from the US, Australia and Europe. Afriforum is part of the Groter Solidariteit-beweging (Greater Solidarity movement) that includes a trade union, a media house and companies selling education and other services.

According to Solidariteit, its movement has 350,000 members – sizeable in relation to a white population of 4.52 million. Solidariteit and Afriforum are the 21st century versions of the cultural entrepreneurs of the volksbeweging (people’s movement) that constructed and advanced the Afrikaner’s identity a century ago.

This movement, which included Soldariteit’s earlier manifestation as the whites-only Mineworkers’ Union (MWU), rose to state power in 1948 on the back of the promise of an expanded form of colonialism named apartheid.

Class alliance crumbled

Upward mobility due to apartheid benefits caused the Afrikaner nationalist class alliance to split between the middle class verligtes ( “the progressives”) and the working class verkramptes (“the reactionaries”). Verligte reform of apartheid to suit the changing operation of capitalism was detrimental for remaining Afrikaner workers.

It resulted in the formation of the Conservative Party (CP) in 1982. At the referendum 10 years later the verkramptes voted against the continuation of talks for the establishment of a non-racist, non-sexist democracy.

Afriforum hails from this political tradition. Not only is its parent organisation the former Mineworkers’ Union, but the same names appear. For example, Kriel was a youth leader of the Freedom Front Plus, a party that continues the CP legacy with four seats in parliament.

Afriforum is a political expression of what I call neo-Afrikaner enclave nationalism. This is a post-apartheid phenomenon that combines an “inward migration” to white spaces (suburbs, institutions, media) with connectedness to global whiteness. In their discourses racism is recast as “culture”, and heteropatriarchy as “family values”.

It’s channelled through the consumption of products. Individuals become Afrikaners by being consumers of Afrikaner culture, media products and related services, and spaces.

In a historic irony, democracy has brought together what apartheid rent apart. Verligtes and verkramptes meet each other under the sign of the market. Afrikaner identity becomes enacted through consumption.

Enclave nationalists

The tradition that the enclave nationalists draw on has historically only represented about 30% of white people, judging by the CP’s support and the “no” vote of the 1992 referendum. Solidariteit, Afriforum and their verligte media allies are eager to expand their constituencies.

Alt-right rhetorical devices are employed. Prejudice, half-truths and distortions are combined with insults and threats of violence. For example, in a 31-minute late night monologue on YouTube Roets attacked law professor Elmien du Plessis for criticising Afriforum’s US visit.

He concluded by quoting Jewish writer Victor Klemperer, who wrote that if the tables were turned after the Holocaust he,

would have all the intellectuals strung up, and the professors three feet higher than the rest.

It’s relevant to mention that Du Plessis is a white Afrikaans-speaking woman. As other examples also show, the ranks of patriarchal whiteness are again closing in defiance of racial and gender justice. The policing of the boundaries of the Afrikaner identity has been stepped up.

As happened during apartheid, alternative voices are delegitimised. Afriforum and its allies actively seek to suppress positions that contradict theirs. Gauging the extent of dissidence among Afrikaans-speaking whites is difficult. Many no longer identify as Afrikaners. Many are getting on with their contributions to make South Africa’s democracy work.

Most would be loathe to organise as Afrikaners. But, given responses that show that many among their compatriots and in the outside world see the white right as representative of all white Afrikaans-speakers, the time may have come for those in support of justice and equality to be more vocal in keeping the record straight.

Christi van der Westhuizen, Associate Professor, Sociology, University of Pretoria

This article is republished from The Conversation under a Creative Commons license.

Land reform debate: what's missing according to South African farmers

Land is a contentious and emotive issue.
Jon Hrusa/EPA

Land reform remains one of South Africa’s most pressing unresolved issues. Attempts to address skewed ownership and economic participation patterns, the result of many years of exclusion and dispossession of black South Africans, have been unsuccessful since 1994. The present government has now turned to possible changes to the Constitution to deal with these failures.

But recent public hearings into these possible changes have highlighted the importance of understanding identity and relationships between groups – not just economics or material wealth – for resolving sensitive issues such as these. The hearings show that fixing the problem of land reform isn’t as simple as dealing with legal necessities, or simply parcelling out land to new owners.

Land reform is much more complex because it involves issues of identities and intergroup relations, as my recent study of agricultural land owners’ views shows. The study is based on extensive interviews conducted with 40 land owners in the Limpopo province of South Africa.

I found that land owners don’t see land as only of economic value. It carried deep symbolic value too. Land (and the ability to own and develop it) is closely related to owners’ identities and their sense of belonging.

The study also showed that land owners were critical of reform initiatives that seem to be motivated by what they perceived to be political agendas rather than agricultural ones. They thought differently about land reform when they believed they were perceived as “farmers” rather than just as representatives of a race.

Land owners, the study revealed, can see the potential of reform for establishing lasting relationships. This suggests that the solution to land reform in South Africa lies in relationships between groups, not just in dividing up material goods. What is more, owners appeared more willing to try reform at a community level than at a level where government officials are involved. This was because people depended on each other in communities.

A final important finding was that land owners felt the current debate portrayed them as being opposed to reform rather than cooperative. This interpretation arises partly from landowners’ own prejudices (this includes racial, class and ideological prejudices) and partly from the way in which certain land reform narratives are publicly constructed.

The research

Unfortunately much of the current discussion about land reform is conducted in ways that suggests only winners and losers, “us and them”, inclusion and exclusion. For example, talk about “returning the land to our people” can unintentionally imply that those who currently own land are not “our people”.

There is probably no single formula that will transform the entire debate, but there are a few things everyone can do. And they are not only the responsibility of political leaders.

First, the public discussion needs to make land reform a South African problem rather than a racial problem. People have shown that it is possible to adopt more inclusive identities when there is a shared dedication to such an identity. The way in which South Africans of all backgrounds rallied around the 1995 Rugby World Cup winning team bears witness to this. This is an example of people uniting behind an overarching identities.

Second, the discussion should emphasise that the solution will come when people depend on each other. Research has shown that if competing groups face problems that have dire consequences for all of them (and all acknowledge these consequences), and if the solution lies in cooperation, conflicting social identities matter less.

Shifting the debate

Some may argue that these suggestions are naïve. They may be correct. But the debate can’t continue in the same old way. Something has to change in the interests of future generations of South Africans.

The conflict associated with land reform will not be addressed by simply redistributing land according to whatever targets are chosen. If reform disregards how South Africans relate to each other in terms of their social identities, the underlying conflict will remain long after any reform process is concluded.

Gert Young, PhD graduate at the Department of Political Science; Senior Advisor: Higher Education, Stellenbosch University

This article is republished from The Conversation under a Creative Commons license.