What next for South Africa?

What next for South Africa?

Kushal Raj explores the immediate political path of South Africa as newly appointed President Ramaphosa takes on the reigns of the nation

The long-awaited departure of Zuma may well have reached an end but let’s not pretend that concomitant stable democracy looms on the horizon.

In fact, the ANC’s newly appointed President Cyril Ramaphosa is under more pressure than ever to protect the party’s governmental reign, which has been a permanent fixture at the helm of South African government since the end of the apartheid in 1994.

Ramaphosa is faced with the challenging task of spearheading his country’s economic revival – this won’t be easy. South Africa’s economy is in deep turmoil; corruption has seen a fall in business confidence, evidenced by South Africa’s plummeting business confidence index which has fallen from 50 in 2013 to below 35 this year. Corresponding to this is an unemployment rate of almost 30%, with almost 40% of young people making up that percentage.

The continuing mismanagement of state-owned power supplier Eksom is yet another hurdle that Ramaphosa’s administration will have to face, in order to alleviate public funding concerns.

Added to this toxic cauldron is the major fragmentations within the ANC and the pressure to speed up the redistribution of land process.

South Africa has been slow in returning land to black people, land that was taken from them under white rule. Consequently, the ANC risks losing its power if it fails to satisfy the black population, which constitutes the bulk of their support.

Ramaphosa will then have to work to improve this situation but to compound problems he will have to come up with a solution that not only encourages economic growth but also speeds up the redistribution process.

The ANC truly is held at cross roads; as Ramaphosa new ruling team work to reduce the land inequality inherited from the apartheid whilst trying to boost economic productivity. A task that will prove very tough. Economic paralysis, Zimbabwe being the most notable example, is strongly associated with land redistribution policy and this will only serve as counterproductive to much needed investment.


So, how do South Africa not do a Zimbabwe?

There is no clearer demonstration of the economic failure that can emerge from a redistribution policy than South Africa’s neighbours, Zimbabwe.

The good news for South Africa is that Ramaphosa has seemingly addressed concerns of invoking Zimbabwe by dealing with the matter of expropriating land with an open mind.

Ramaphosa has previously expressed his support for releasing land that is occupied by government departments and municipalities to increase the supply of housing. This would lead to people having improved access to the cities, where jobs are.

This method seems more appropriate to boosting economic performance; with the agriculture sector only accounting for around 2% of GDP.

Concerns with redistribution don’t stop there. Since the end of apartheid, it is estimated that almost 70% of the land that was redistributed is now fallow. Many of those who received pieces of land did not have the capital or skills to maintain and improve productivity on the farms, with a number of farms falling into disrepair. A more desirable option for those at the time would have been cash payments, with a large number taking it upon themselves to quickly sell on their newly acquired land to white settlers.

Nonetheless, we must not guise over the reason for land redistribution, which is: perpetual problems of race inequality. In a country where white people are earning on average five times as much as black people, it is inexcusable to scorn at the livelihoods of 46.6% of the black population living in destitution. A reminder that de facto apartheid still very much resides in my fatherland.

The solution can lie in land redistribution too, if administered differently; since it is not land redistribution that is the problem, but more how it is implemented.

A 50/50 model has been suggested, whereby the government buys the land and leases it to the farmer and workers to be co-owned. This would ensure stability for workers and could act as an incentive for increased productivity. Another solution would be to invest in subsidising training schemes, so that young people have the skills to run farms.

Both these methods should complement Ramaphosa’s necessary objective; to bolster the South African economy.

However, perhaps it is time South Africa started looking at alternative methods to land redistribution, to adjust to the accelerated developments in the South African economy. The withering away of the agricultural sector is a compelling reason to start looking at alternative methods to land redistribution as means to improve black livelihoods. A more equitable allocation of social grants would be a stepping-stone in the right direction.

South Africa could also benefit from a more progressive tax system. With about 95% of the country’s assets concentrated in the hands of 10% of the population, a more progressive and efficient tax system will provide the government with funds to improve the lacklustre unemployment insurance schemes and other welfare programmes.

After all, is it not most important that black South Africans reclaim ownership of equality and opportunity?

However, corruption remains rife, and so the departure of Zuma is not solving a problem; it does not mean a sudden surge in public funding for social welfare. A shift away from redistribution policy really does depend on the reception of the ANC’s core followers. With elections on the horizon, it could be seen as a risky move, which would be heralded as political self-sabotage if gone wrong.

We will wait and see what Ramaphosa plans, as he embarks on a journey of political and economic salvation. His first job, however, will be to remedy the profound rupture within South Africa’s largest party. No small feat for your first task at the new job.

Photo credits: Caxton Central & Wikicommons

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