SA’s fate hangs in the balance, ANC, IFP leaders tell big business

The ANC says if the government of national unity (GNU) fails, SA is “headed for a revolution” and it has called on big business to invest in the country now to ensure political and economic stability for a generation. 

That was the message ANC head of political education David Makhura delivered to a 5,000-strong gathering at Investec, one of the largest asset managers in SA. 

Makhura, IFP president Velenkosini Hlabisa and political analyst Frans Cronje spoke exclusively to Business Day after the first meeting of a road show to try to catapult the GNU’s political success into better economic prospects. 

This follows the peaceful transition after the May 29 elections in which the ANC lost its majority for the first time since 1994 and saw it turn to opposition parties to form a government. 

Ministers have since hit the ground running and as a result the bond market rally has shaved about 100 basis points off the government’s borrowing costs, improving SA’s fiscal outlook and reducing the country’s risk profile.

“If it [the GNU] fails, we are all finished. Capital must come to the party. Noise makers, populists and ethno-nationalists are waiting for us to fail,” Makhura said. 

He said it was in the interest of organised business and labour to form a social compact to drive economic growth. 

“People are worried about their lives and the lives of their children. We all want to live a better life. You and I are worried about the same thing. The transformation of the economy is central to creating a more inclusive society. Let’s drive human capital and infrastructure development,” Makhura said. 

He added that in a growing economy there would be greater employment and less corruption. 

“A growing economy will help clean the ANC. We want members to develop skills and also work outside government. We want to grow the working and black middle class. That is how the ANC will survive,” Makhura said.

Hlabisa shared some of Makhura’s sentiments. 

“The GNU has to succeed because it is the best option for the country. It responded to the call to the people of SA who did not come in support of a single party on their own. We have to find each other and common ground. The first few days shows a willingness to work for the people of SA. If the GNU fails, the country and people would have failed,” Hlabisa said. 

Hlabisa who was appointed the minister of co-operative governance & traditional affairs by President Cyril Ramaphosa took this message to big business. 

“The first thing we need to make work is local government because for the economy to grow that is where people invest. What we need to do is provide a conducive environment,” he said.

The ANC, meanwhile, emerged from its six-day meeting of its leadership saying Hlabisa’s efforts would be fully supported. The party identified performance of municipalities as a major obstacle to economic growth.

The “debilitating intergovernmental debt crisis where municipalities owe agencies and utilities at a national government level is a spiralling problem”, ANC head of the local government subcommittee Parks Tau said. “There needs to be a greater appetite to partner with the private sector to mobilise resources in addressing some of the challenges.”

Cronje, political analyst, said that if the GNU worked SA could become one of the biggest and best emerging markets in the world.

“Politics is limited by economics in the short term. In the long term economics is limited by politics. We could have stability and growth for a generation if the GNU works,” Cronje said.

He added that it was not hard to do.

“After 1994 for the first 10 years, in terms of service delivery, SA was unmatched. Spending happened while cutting the debt to GDP ratio. We had the first budget surplus since the formation of the union, the murder rate was cut in half, business and consumer confidence increased. It is possible if we have proper governance and accountability,” Cronje said.   

omarjeeh@businesslive.co.za