Be Realistic About South Africa’s Future

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South Africa’s future hangs in the balance. Instead of pursuing the urgent reform that needs to take place in government and the economy, Cyril Ramaphosa seems dead set on continuing down the ideological road of transformation at all costs.

The Economy

The South African economy has not grown by more than 2% in a single year since 2012. GDP growth has averaged around 1,6% annually over the last 10 years, while the population has been growing at around 1,5% per annum. This means that the economy is barely growing fast enough to absorb the population growth. For the last 10 years on the whole, living standards have not improved en masse. We are all fighting for a slice of a pie which is not growing. If only the economy had been growing at 3,5% a year (a conservative estimate considering many other emerging economies are growing at 4%+), the compounding effect over 10 years means that our economy could have been (should have been) 20% bigger than it actually is now. Imagine being 20% richer, earning 20% more, and having significantly more people in the middle class. The fact that we don’t have this is the price we are paying for the criminally negligent mismanagement of the economy and state over the last decade.

The Sad Reality

An old school friend who moved to Australia after school to go study there recently came back and visited me. We spent a beautiful day in Cape Town hopping from restaurant to bar to beach. He was enjoying his time in South Africa so much that he asked me whether he should consider moving back, finding a job and settling here. That was the first time I had encountered such a question, and I really had to think about it. I gave him the regrettably sad answer that now is not a good time to come back. I sincerely hope that I can one day encourage him to come build a future in SA.

I matriculated from an ‘elite’ Gauteng boys’ private school. With the help of Facebook I could determine that around 25 of the 105 boys who made up my matric class now find themselves outside of the country. I can only assume that my school is not an exception, and that this is a trend among young professionals.

Our economy has become a zero-sum game. As I wrote earlier, the pie is not getting any bigger, and for me to win, someone else must lose. This is the effect of an economy that is over-taxed, over-regulated and ravaged by corruption. We are falling into a trap that many don’t see coming. The trap I am talking about is the change that is approaching the South African mentality. Over the last 25 years South Africans have largely been optimistic and upstanding, mostly played by the rules, and revered the ‘South African story’ with the always present hope of a brighter future. The current malaise is a danger as for the first time many can’t imagine the future being better than the present. It is bringing in a new ‘gaming the system’ mentality, the sort of mentality that was common in the old communist countries. The idea is that the system is out to exploit you, and you better take exploit it for what you can in return.

The Simplistic Naivete of #ImStaying

Late last year, a Facebook group named #ImStaying came to being, it now has over 1 million members. It is for the most part a positive group where people share positive (sometimes self-congratulatory) anecdotes about daily life in SA. While this is positive in that it shares good news which also needs to be heard, you can’t help but feel that it creates an emotional atmosphere where negative and worrisome trends are overlooked. Deciding whether to leave or not leave their country of birth is one of most important decisions most will ever make. You can’t have anything clouding your judgement.

There are 195 countries in the world. The best one for you and your family is not necessarily the one you were born in. The same principle applies for investors and those looking to hedge their wealth against political risk. Why would you have all your assets invested in the world’s 33rd largest economy, one that is facing serious economic and political risks, when there are 194 other countries out there.

The Irrational Excitement of Being Close to Power

I have had the opportunity to speak or listen to people in agriculture and agricultural associations who have had high level meetings with the president on land reform. I’m always interested to hear what they think about him, and what they think the future holds regarding land reform. They all say that the president understands the dangers of land reform, and that he takes their concerns seriously. They are invariably confident that they can find a comprise with the president that won’t lead to a bad outcome for landowners or the country as a whole.

At an event hosting Cyril Ramaphosa at his wine estate, Beyerskloof in Stellenbosch, well known wine farmer Beyers Truter publicly declared that he would vote for the party of Cyril Ramaphosa in the 2019 election. I wonder whether he realizes that he was also voting for the party of Ace Magashule and David Mabuza. Some people get irrationally excited when they are close to power.

For all we know, Ramaphosa may be sincere when he tries to allay the fears of farmers and concerned members of civil society, but I can’t help but think that those who believe him are some combination of naïve and arrogant. To believe this president is to believe that he is being honest when he reassures you, the farmer (a declared adversary of the ANC, don’t forget) about your property rights behind closed doors, but that he is lying to his supporters and comrades when he, almost on a weekly basis declares that the government will steamroll ahead with EWC.

When the ANC last week declared (and Ramaphosa endorsed the motion) that it will seek to reduce the roll of the courts in deciding the compensation in cases of expropriation, that should have been a sign that he is not willing to compromise.

“Those who are giving Ramaphosa and the ANC the benefit of the doubt over land are drugged by false hope. They are sleep walking into a burning house.” – Waldimar Pelser (Rapport – 26 January 2020)

They say that hope is the last refuge of a desperate man. But we need to have hope. The chance that the ANC will come to its senses and do what’s best for the country is extremely unlikely. Our official opposition party is still finding its feet after 5 years of poor, visionless leadership. Things will get worse before they get better. The best we can do is support organisations like the IRR and Afriforum that are campaigning against this. Apart from that, we need to prepare ourselves for the continued slow-motion disintegration of our economy.

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