South Africa: Ascendant African Growth Engine?

This is a guest post by Jim Sanders, a career, now retired, West Africa watcher for various federal agencies. The views expressed below are his personal views and do not reflect those of his former employers.

John Kane-Berman, Chief Executive of the South African Institute of Race Relations and South Africa’s ambassador to the United States, Ebrahim Rasool, on March 14, spoke at the Cato Institute on South Africa’s future under the African National Congress (ANC).

Mr. Kane-Berman credited the ANC with achieving progress such as expanding access to housing and electricity, and reducing the number of South Africans living on less than U.S. $2 a day. Paradoxically, however, he observed that more state service delivery has led to more dissatisfaction, perhaps owing to the fact that state-provided houses tend to be badly built and municipal counselors incompetent.

Yet despite substantial gains, jobs remain a weak point. Unemployment is running at 36 percent. Localized instability may be the result of high youth unemployment, not failed service delivery. Youth unemployment is closely tied to an educational system Kane-Berman termed the worst in Africa by far. South Africa is not producing, or importing, the skills needed to keep its economy running, he warned.

Economically, South Africa faces a crisis and it is largely a product of a top-down governance model in which the party is superior to the state. An environment of increasing centralization and state regulation is causing the private sector to sit on about 500 to 700 billion rand, which could otherwise be used for investment and to fund development. The ANC’s “Soviet style” of governance, in which the party is superior to the government, results in a lack of downward accountability, pervasive corruption, and systemic incompetence, Kane-Berman argued.

Just as apartheid crumbled as a result of its internal contradiction, Kane-Berman expects the same may happen to the ANC, if it remains on its present course. Civil society is re-awakening and the ANC’s legitimacy is waning in the face of critics within its own ranks. ANC trade union allies, for example, are speaking out against corruption. The reforms most needed, in Kane-Berman’s view include: professionalizing the civil service, shrinking and decentralizing the state, and replacing racial preference laws with color blind policies.

Ambassador Rasool observed that South Africa is dealing with intractable and systemic problems which require more than nineteen years to solve, and he cautioned that the state’s ability to address economic conditions is affected by broader changes occurring within the global economy. Nonetheless, the country benefits from an activist judiciary, vigilant NGOs, and a vibrant media. An active opposition also evidences the strength of South Africa’s multiparty system, the ambassador emphasized.