The ANC’s Legacy: Radically Transforming South Africa Downward

These commitments indicate just how much the ANC misjudges the root cause of endemic corruption...

Written by: Chris Hattingh

On 8 January 2021, the African National Congress (ANC), South Africa’s ruling party, marked its 109th anniversary. Where once there was real optimism and hope for the future, after colonial and Apartheid oppression, the ANC has succeeded in transforming South Africa’s potential into what is increasingly becoming a failed state.

Any organisation with such a long history will have seen and experienced much – in the ANC’s case, it will probably always be known as one of the major forces that fought against Apartheid. However, its years of being in power since 1994 have been marked by numerous corruption scandals, failed state-owned enterprises (SOEs), and reams of broken promises regarding job creation and service delivery. Where it had a once-in-a-century opportunity to set South Africa on the path of radical economic growth after the ravages and oppression perpetrated by the socialist Apartheid regime, the ANC largely stuck with its Marxist socialist influences. The results have been rising unemployment, endemic corruption, failing service delivery, and the steady pushing of South Africa down the cliff.

We could list ad nauseam the SOE failures of the ANC government. I think a more damning piece of evidence that serves to indicates what happens when one implements Marxism (to any varying degree) is the consistent rise in the number of people on social grants. In 1996/97, 7% of the population received some manner of social grant. In 2019/20, this had increased to 31%.

There are two factors to keep in mind: 1) The majority of South Africans are black, and they would not necessarily have had access to grants during Apartheid, and 2) the size of the population has been steadily increasing over the years. That the number of unemployed people is now at 11 million indicates to me that while these two factors are important for a more rounded picture, the anti-business and anti-entrepreneurial environment perpetrated by the ideology and policies of the ANC have steadily weathered away people’s desire to build businesses for themselves and their families.

Given the ANC’s deeply irrational priorities – such as dumping billions upon billions into the vanity project that is South African Airways – and the ever-mounting pressure on the debt and fiscus, the state’s ability to provide so many grants will inevitably wither away. The consequent social unrest should not surprise anyone. People are denied economic freedom and property rights, and are promised that in exchange for their voting support, the state will provide for every need they may have. Their anger and frustration should be expected – and indeed, understood and respected.

Speaking at the 109th anniversary celebrations, President Cyril Ramaphosa reiterated his stance that the party would take a tough stance on corruption, touched on the prospect of introducing a basic income grant, and threw his weight behind the ill-fated National Health Insurance scheme.

These commitments indicate just how much the ANC misjudges the root cause of endemic corruption: A huge state that is involved in every aspect of the economy. If the only way for people to ‘get ahead’ is by having the right political connections, they have every incentive to use monetary and other pressures to influence the policy decisions of politicians. The ANC, through Ramaphosa, has in the last year often indicated that it is 'serious' about tackling corruption. Yet, Ramaphosa’s priorities will only increase the ANC’s patronage network and serve to incentivise corruption.

For as long as the ANC remains in power, and is committed to increasing the reach and power of the state, the more we will see economic stagnation and increasing unemployment. As desperate as it is to retain support through offering all manner of goods to voters, it simply cannot redistribute South Africans into prosperity. No amount of taxing ‘the rich’ will somehow free the economy from the policy chains that inhibit activity. For as long as the economy (from the smallest street corner vegetable vendor to the largest corporate boardroom) is inhibited by political interference, there will exist little to no chance of economic improvement.

Government officials and bureaucrats tend to not go hungry. During times of economic hardship, they still have access to the best goods and services. Further, they and those remaining in the upper classes, can afford to leave their country when things really break down. For the overwhelming majority of people, though, this is not the case. They must bear economic and social strife – and their children and grandchildren have few prospects for a better life.

This will be the tragic, long-term legacy of ANC rule. The faith and power that people placed in the hands of the ANC as a liberation movement, has in turn been used to further the interests of the well-connected, while depriving people of that which could have truly, radically transformed South Africa in a positive manner: economic freedom.

Chris Hattingh is Executive Director at the Centre For Risk Analysis (CRA). With a special focus on trade, investment, and economic matters.