South Africa: From Breakdown to Breakout Nation

Last week we witnessed – with renewed vigour – the vicious economic cycle that now grips South Africa.

The political/ideological logjam at policy level, along with endemic corruption simply ends up weakening every aspect of state delivery – from power to water to public transport and the broader infrastructure.

The inability of policymakers to break out of their ideological silos and implement far-reaching energy reforms promotes the fragility of the domestic power grid.

The extended bouts of loadshedding, which leads to a drop in investor confidence and economic activity. This, in turn, leads to further unemployment, which is already soaring due to poor policy formulation.

Unemployment leads to social instability creating a further erosion of confidence and results, ultimately, in a lack of private domestic investment and a weakened GDP.

In turn, this leads back to lower growth, service delivery failures, job losses, fiscal and debt pressures and the growth of populist alternatives that weigh on the political policymakers unable to walk the extra mile towards real structural reform.

And so it goes – round and round without any signs of meaningful reform. South Africa, therefore, runs the risk of being a breakdown nation urgently in need of being a breakout state.

The country desperately needs to break this cycle of decline. It requires a catalyst, an instigator, a spark to shift our trajectory into positive territory rather than just back on itself once again.

Loadshedding largely extinguishes the light at the end of the tunnel. But, it doesn't have to be this way. Even a state grappling with real and living corruption in its midst can still institute policy reforms to make some inroads into improving growth prospects.

The same question remains: what type of economic policy vision does the current ANC leadership envisage for the country? You can blame just about everyone – from Eskom to Covid-19, to the Americans, the Chinese, to the capitalists and the imperialists and even Ace Magashule – but eventually, it all boils down to policy choices.

The danger to South Africa currently is manifested in the apparent lack of desire, political will or just basic street smarts to allow change to occur. But ultimately, the logjam preventing meaningful reforms continues to be centred on the choice of economic model for the future.

Today's ANC simply cannot define a way out of our present crisis as long as it sees the state – and the political entity of the ANC itself – as the main drivers of the South African state.

To put it bluntly, the ANC has essentially – through corruption, cadre deployment and a complete failure in oversight – proved that it is incapable of defining the economic agenda. There is no better proof of this than the 63% unemployment rate among those aged 15 to 24, or a broader 42% expanded unemployment number for the country.

But many within the governing party still look towards the Chinese model as the answer to our problems.

If we can – as the argument goes – enable a capable state without corruption, we can reform state-owned entities sufficiently to restore them to proper functionality and continued domination of public services.

This model keeps the management role of the ANC intact and affords the state the chance to continue to maintain a leadership edge over the private sector. It continues to support cadre deployment, albeit with greater scrutiny, while it perpetuates opportunities for the prevailing elites to accumulate wealth still through patronage.

Ultimately, it remains a method in which patronage politics remains entrenched by the political faction in power, all within a more efficient methodology.

You can see why this model is so attractive. It is, perhaps, what the ANC always wanted theoretically, at least in terms of its "national democratic revolution" to transform the levels of power and ownership within the country.

There are broad swathes of the ANC – and that of related groupings like the trade unions and even the EFF – that would support this model. But, the reality is that the state, in its current form, is simply unable to take on these roles – no matter what faction is in power.

Endemic corruption is now playing itself out within the ANC and its bureaucracy. It's not just the domain of the Guptas anymore. It can be found in the Department of Health right now. And it's not just the anti-Ramaphosa brigade accused of malfeasance – it's at the very heart of the president's own support base.

To think that you can suddenly renew the credibility of the state under these circumstances would be dangerous. And, as the ANC still wants to pump billions into a National Health Insurance (NHI) when its key administrative department is mired in mud, shows just how deficient the state continues to be. Too many populist policies remain – like the nationalisation of the Reserve Bank that is similarly opportunities for looting.

South Africa, therefore, needs something better. It requires a breakout set of policies applied in both ideology and execution. The reality of politics is that vested interests will always derive some benefit from being linked to the ruling elites, and it would be naïve to think that such benefits could be switched off. But, this is not the time for the state to perpetuate its gross mismanagement that has led to South Africans living in darkness, poverty and crime.

South Africa's breakout policies need to remove many responsibilities from the state – at least until the state can prove itself over time to be responsible to handle these.

The breakout for South Africa would be for the ANC to shift responsibility to the private sector in major cooperative projects which are patriotically driven. This includes infrastructure and oversight, skills selection (appointments)and performance monitoring. The current South African state needs to be protected from itself. It needs to de-politicise its own involvement. And until such time that this is acknowledged, the rampant corruption as witnessed weekly will simply continue.

Of course, this assumes that the centralists and statists within the broader alliance take an ideological back seat. And realistically there is little chance of that, despite the statists' dismal performance over the last decade.

If this type of breakout policy doesn't occur – which affords the ANC a chance to reform the country and thereby take the credit – it's the very same ANC that will be on the losing end when the country eventually hits its fiscal cliff or when voters desert it or when social unrest becomes disabling.

Indeed, the ANC has a chance to implement its own breakout policies from within. If it doesn't, a breakout can come, but it will be at the expense of the ANC itself.

- Daniel Silke is director of Political Futures Consulting. Follow him on Twitter @DanielSilke and view his corporate keynote briefings on www.danielsilkeglobal.com.