ANC has chosen to eat, rather than grow the economy – analyst

Political analyst Moeletsi Mbeki says that the ANC has chosen to consume, rather than grow the South African economy – enjoying its time at the dinner table, leaving the job of saving and investing for future generations.

Speaking in webinar hosted by PSG Konsult, Mbeki said that the ANC plays clever politics, zeroing-in on a wide voter base that benefits the most from keeping the party in power – while opposition parties have failed to convince voters that they will do a better job.

According to polling data, around 25.6 million people voting for the ANC are poor, black Africans living in rural areas. This population group is the most reliant on social grants doled out by the government each month.

Mbeki said that this voter base is the key to the ANC remaining in power, and is not easily shifted.

“The reason they vote for the ANC is because the ANC says to them ‘if you vote for anyone else, they will cut social grants that we give you – so you vote for us, and we’ll keep dishing out the social grants’,” he said.

The main focus of the ruling party has been to cater to this voter base. Subsequently, the party is not only expanding and increasing social grants annually, but has even used the Covid-19 pandemic and government response to put even more people onto grants.

“In reality, this is to buy more votes from the poor,” Mbeki said.

Data published by the Department of Social Development in January showed that between 1996 and 2020, the number of people on social grants in South Africa increased from 3 million (7% of the population) to 18.3 million (31% of the population).

The problem that emerges with a grant-based electorate is that the resources feeding grants are finite, Mbeki said. And with South Africa now facing a mountain of debt – over 80% of GDP, heading to 95% in the next year – government’s options are increasingly limited.

“Sooner or later, government revenues will only be able to pay for servicing debt, and maybe some of the social grants,” Mbeki said.

This is the fiscal cliff which ratings agencies have been warning against for years, and factored into the country being junked once the firms realised the ANC government “wasn’t listening”.

“What they don’t realise is that the ANC cannot listen. If they listened, it would lose the vote of the poor, who have been giving them a big lunch.”

The ANC is already aware of the fiscal trap it’s in, Mbeki said, which is why the party’s strategy is now to cut the salaries of civil servants.

“So far, they’re getting away with it. They need the poor more than they need the civil servants. The poor are many, and the civil servants are few,” he said.

It’s our time to eat

The solution to the ANC’s resource problem would be economic growth. Growing the economy would relieve pressure on the fiscus and allow government to dig itself out of the fiscal hole it has found itself in.

However, Mbeki said that, while it is self-defeating, the ANC has made a choice to consume, rather than build South Africa’s economy.

This mindset was born from a century of deprivation, which has echoed through a few generations, he said.

“You have to put yourselves in the ANC’s shoes, where for over 100 years they’ve been deprived – so now it is their time to eat,” Mbeki said. “To invest and grow the economy requires saving, and they’ve decided to put that off to the next generation.

“So, they’re eating. And they must keep their voters eating also, to stay in power.

“As a result, there’s no money left for financing investments in the economy. We are one of the highest-taxed countries in the world. We have one of the highest unemployment rates in Africa and the lowest investment as a percentage GDP.

“You can’t both eat and grow the economy – you have to make a choice, and that is the choice the ANC has made,” Mbeki said.

No options

Mbeki said black South Africans have been angry for a long time. Now they are sitting at the dinner table, and ‘having three helpings’.

“Everyone knows that eating that much isn’t sustainable and will probably kill you,” he said.

The younger generation doesn’t feel deprived to the same extent, he said. Better educated and more professional, they’re changing their mindset away from one of grievance to one of building the country.

Unfortunately, the younger generations are not really finding a political home in South Africa, Mbeki said, with no real alternatives to the ANC emerging from the current political parties on offer.

“The DA and the EFF – between them, they cannot mobilise the voter. They do not have a message for the voter that gives them confidence that they will run the country better than the ANC. So the voter feels stuck with the ANC.”

However, he noted that South Africa’s democracy is still in its infancy, which is why there is a still single-party dominance.

The country is still in a long transition cycle; but it is changing, he said, adding that the ANC is declining. At one stage the party was 70% of the electorate but at the last local elections, it lost control of the biggest metros in the country.

The poor handling of the Covid-19 pandemic and vaccine rollout, as well as the fact that “the urban population has started to abandon the ANC anyway”, will lead to an interesting result at the polls, Mbeki said.

The country’s next local elections are scheduled for August.

Read: ANC pushes for extension of Covid-19 grants in South Africa – despite lack of funds

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ANC has chosen to eat, rather than grow the economy – analyst