South Africa is practically a failed state: CEO

Sibanye-Stillwater Neal Froneman is heavily critical of the current state of South Africa’s economy and government – citing a key lack of leadership.

“My view is now that we are practically a failed state. It starts with inequality and poverty,” he told the Daily Maverick in an interview this week.

He added that this was not an issue limited to the mining sector, but was broadly applicable to South Africa as a whole.

“This is a lack of people at the highest levels taking proper action against lawlessness, against crime, and it filters all the way down through the system. But, ultimately, because there is no economic growth, people are poor, people are angry, and, of course, there is a lack of capacity to deliver services.”

Froneman said that crime in the country has also escalated out of control, with ‘mafia-style shakedowns’ for procurement contracts becoming a frequent occurrence.

He said that this was becoming increasingly common as the law is not enforced and there are no repercussions.

“And because mining companies are seen as prosperous, and they do have services, they get targeted because everyone wants a part of it.”

“Government leadership has created this problem and they are doing nothing. The government can’t deal with it because it goes against their ideology. There is neither the capacity nor the competence to deal with it.”

He added that businesses will have to start spending more to build and maintain their own municipal and governmental services, as the government will not be capable of providing these reliably going forward.

A failed state? 

Froneman’s views add to a growing chorus of comments from government, analysts and business leaders about where the country is heading.

A culture of self-enrichment among some South African politicians and public servants is putting the country’s democracy and post-apartheid promises of creating a better life for all at risk, according to Treasury’s director-general, Dondo Mogajane.

“We have to remind our leaders – and I’m speaking as a South African – who are in government, in public service and politicians to get off your high horse and do what we have to do to ensure we create access and a conducive environment for people’s lives to change.”

“If that’s not going to be a motivating factor, we can start calling South Africa a failing state because the things that define a failing state are beginning to show, where we don’t care about the poor and improving their lives.”

Mogajane’s comments come after the Institute of Risk Management South Africa (IRMSA) published a report this week warning that South Africa risks becoming a failed state if its lack of decisive, ethical, and courageous leadership persists.

“If South Africa continues to experience a continued breakdown of ethical and legal principles, unmanageable societal unrest and breakdown of the rule of law, complete economic collapse becomes almost inevitable,” the nation’s professional body for risk management said in a February report.

Capable leadership 

Minister in the Presidency and chairperson of the National Planning Commission, Mondli Gungubele, says that for South Africa to achieve the objectives of the National Development Plan (NDP), the country must redouble its efforts to build a capable, ethical and developmental state.

Addressing a public lecture on Monday (7 March), Gungubele said building such a state requires strong leadership, a focus on people and strong implementation capability.

“This moment of crisis requires an integrated response, where government works hand-in-hand with institutions of higher learning, independent researchers, the private sector, civil society and labour, and collectively come up with development strategies to ensure that we recover from the current crisis and restore a thriving economy,” he said.

He said the current landscape presents an opportunity to reset the South African economy and it is an opportunity to build a new, inclusive economy that benefits all South Africans.

“This is a moment for a permanent and decisive break with our past of low and declining growth, falling per capita incomes, low investment, as well as high and deeply entrenched levels of inequality, poverty and unemployment.”

Read: South Africa’s economy is now the same size it was almost five years ago