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<\/a><\/figure>\n\n\n\nThis isn\u2019t how it was supposed to be. When the ANC came to power in South Africa in 1994, Nelson Mandela\u2019s \u201cRainbow Nation\u201d held out the promise of an efficient state-led economy that would uplift the downtrodden Black majority. And for a while, it did.<\/p>\n\n\n\n
But three decades on \u2013 while many ANC leaders still cling to that vision, referring to each other as \u201ccomrades\u201d and trotting out the trope of \u201cWhite Monopoly Capital\u201d when they talk about business \u2013 the government\u2019s role as a provider of basic services is virtually non-existent<\/strong> in large swaths of the country.<\/p>\n\n\n\n With an election next year and polls indicating that the ANC may lose its national majority for the first time, the party is leaning even more on the private sector to do the government\u2019s job in a bid to stay in power. Business participation<\/strong> is being sought in electricity, rail and water against the wishes of some of the government\u2019s biggest allies \u2013 labour unions.<\/p>\n\n\n\n Vincent Magwenya, a spokesman for President Cyril Ramaphosa, declined to comment except to say that the president is facilitating partnerships with the private sector to meet the needs of the economy. Mahlengi Bhengu, an ANC spokeswoman, didn\u2019t respond to calls or messages seeking comment.<\/p>\n\n\n\n \u201cThe government has failed South Africans in terms of what it\u2019s supposed to do, which is provide services for citizens,\u201d said Thabi Leoka, an independent economist and member of Ramaphosa\u2019s Economic Advisory Council. Businesses are unlikely to provide for those not directly linked to their operations, leaving many behind, she said.<\/p>\n\n\n\n The divide between rich and poor is widening in what is already the world\u2019s most unequal nation, according to the Thomas Piketty-backed World Inequality Lab, turning South Africa into a tinderbox.<\/p>\n\n\n\n There were 122 major protests across the country in the first six months of this year over the failure of the government to deliver services like electricity and water, on course to beat the 2018 record of 237, according to data collated by Municipal IQ, which monitors the performance of the country\u2019s municipalities.<\/p>\n\n\n\n \u201cProtests have become increasingly violent and lawless,\u201d said Kevin Allan, managing director of Municipal IQ. \u201cThe root cause is the exclusion of the protesters and their communities from services, political representation and economic opportunity.\u201d<\/p>\n\n\n The inability of state-owned power utility Eskom \u2013 struggling with cable theft, corruption and old, poorly maintained coal-fired plants \u2013 to meet demand has prompted private companies to step in. They plan to build more than 10 gigawatts of capacity for their own electricity needs, freeing up power for others.<\/p>\n\n\n\n Inefficiencies in the country\u2019s freight rail network and ports have forced the government to open them up to private participation. This week, state logistics company Transnet said it sold a stake in Durban Container Terminal Pier 2, part of Africa\u2019s biggest harbour, to the Philippines\u2019 International Container Terminal Services.<\/p>\n\n\n\n The South African Post Office and South African Airways have collapsed. And although the flag carrier has restarted some flights, private couriers and airlines have largely stepped into the breach.<\/p>\n\n\n\n Miners often provide all public services in areas where they operate, turning them into mini-states. Take Marikana, a town in South Africa\u2019s North West province, for example. Platinum miner Sibanye-Stillwater runs the show there.<\/p>\n\n\n\n Alphina Komane, a nurse at Sonop Clinic, says the miner expanded and partially equipped the government medical facility. Nurses now have their own consulting rooms, rather than cubicles divided by sheets, and there\u2019s a waiting room so that sick patients no longer queue in the parking lot. <\/p>\n\n\n\n Sibanye-Stillwater\u2019s assistance has helped Dora Thlapane, 73, grow cabbages and carrots in neatly tended and fertilized trenches, selling them at affordable prices to her neighbours.<\/p>\n\n\n\n \u201cWe are taking a stance to solve the problems we see around us because we believe that the success of these municipalities will mean better living conditions for employees,\u201d said Thabisile Phumo, the company\u2019s executive vice president for stakeholder relations in southern Africa. <\/p>\n\n\n\n \u201cWe\u2019re telling the government that you have to get involved in learning how to solve problems so you aren\u2019t stuck when the mines eventually close.\u201d<\/p>\n\n\n\n South Africa\u2019s main platinum mining belt, about 60 miles north of Johannesburg, has attracted migrants seeking work from poorer provinces like the Eastern Cape and impoverished neighbouring states such as Lesotho. <\/p>\n\n\n\n There\u2019s only work for a fraction of them, and the area is now a sprawling slum of hundreds of thousands of people living in shacks and modest houses clustered around mines and on the edge of the few remaining farms. Roads are deeply potholed, and there\u2019s little evidence of government activity.<\/p>\n\n\n\n \u201cOur workers are community members,\u201d Phumo said. \u201cIf there are no roads, no schools, it has a direct impact on them.\u201d<\/p>\n\n\n\n But there\u2019s just so much the private sector can do. With a global annual turnover of more than R10.6 trillion \u2013 about double South Africa\u2019s gross domestic product \u2013 the private sector already employs some three-quarters of the country\u2019s workers and accounts for over two-thirds of investment, research and development expenditure, according to the latest government figures.<\/p>\n\n\n\n The public sector, meanwhile, is languishing, hurting the poorest. About half of South Africa\u2019s population of about 60 million lives in poverty and receives at least one monthly welfare payout. <\/p>\n\n\n\n About a third of the country\u2019s workforce is unemployed, a situation likely to worsen with persistent blackouts hurting the economy, which will barely grow this year. About 70% of South Africa\u2019s municipalities are in financial distress, mostly because they lack credible financial management, budget data shows.<\/p>\n\n\n\n \u201cAt the core of it is skills,\u201d said Phumo. \u201cPeople are politically appointed\u201d to managerial positions in municipalities that they aren\u2019t qualified for, she said.<\/p>\n\n\n\n While the evils of apartheid are well documented, the international isolation it brought created a robust home-grown private sector in South Africa. <\/p>\n\n\n\n Limited foreign competition and imports drove local companies to develop a wide range of industries. In some cases, they became behemoths like Anglo Americans that operated everything from mines to banks and paper mills.<\/p>\n\n\n\n The ANC\u2019s first 13 years of rule further bolstered their balance sheets as the party set about supplying electricity and clean water to the houses of Black South Africans, building millions of new dwellings and creating a Black middle class with money to spend.<\/p>\n\n\n\n Under the rule of first Mandela and then Thabo Mbeki, the economy grew for 40 consecutive quarters starting at the end of 1998. Yields on the country\u2019s generic, rand-denominated 10-year debt, which date back to December 1999, almost halved by the end of 2005.<\/p>\n\n\n\n \u201cFor 10 or 15 years, the ANC governed South Africa much better than it was ever given credit for,\u201d said Frans Cronje, chairman of the Social Research Foundation, a think tank that conducts opinion polls. \u201cAnd life got better.\u201d<\/p>\n\n\n\n Then, Jacob Zuma came to power in 2009, and a near-decade of corruption scandals and economic stagnation followed. <\/p>\n\n\n\n Skilled workers left the civil service, and state-owned companies like Eskom, ports and rail company Transnet accumulated debts, neglected infrastructure and were riven by graft.<\/p>\n\n\n<\/a><\/figure><\/div>\n\n\n<\/a><\/figure>\n\n\n\n