Picture: REUTERS/SIPHIWE SIBEKO
Picture: REUTERS/SIPHIWE SIBEKO

In the ferment surrounding the ANC leadership contest, the widening gap between the geography of ANC support and the economic heart of the country has gone unnoticed.

ANC membership translates into political influence and has been rising in relatively poor and mostly rural provinces but falling behind in better-off urban regions. The divide between political clout and economic capacity is risky for the economy. Without efforts to close the gap, the consequences are likely to be damaging.

The chart compares the proportion of total ANC delegates to the elective conference from each province with its share of the national population. Mpumalanga and the North West have almost twice as many votes as one would expect, reflecting their large ANC membership.

Conversely, Gauteng has only two-fifths of the expected votes and the Western Cape only a third. So their interests are greatly underrepresented. With a quarter of SA’s population, Gauteng has only 10% of ANC votes! What’s more, Mpumalanga has grown its support by nearly 60% over the past five years and the North West by 130%.

Assuming these are real members, it seems President Jacob Zuma’s leadership and/or governing party policies have proved more popular in regions scarred by high unemployment and poverty than in the cities. The loss of ANC municipal control in Johannesburg, Tshwane and Nelson Mandela Bay confirms its fading support in most metropolitan areas.

The chart also compares the ANC delegates from each province with its contribution to the economy.

The economic weight of Mpumalanga and the North West is even smaller than their population share. So their political power is about double their economic muscle.

Meanwhile, Gauteng and the Western Cape have less than a third of the clout they would have had if their economic capacity was counted.

The chart also compares ANC delegates with each province’s contribution to national tax revenue in the form of personal income tax. Mpumalanga and North West have three times more political influence than the resources they generate for the fiscus.

Gauteng and the Western Cape have less than a quarter of the political clout they would have had if the taxes they pay were factored in. Gauteng alone generates almost half of all national income taxes, but has only one in 10 ANC delegates.

Why does this matter? Because the divergence between the ANC strongholds and centres of production impairs understanding of how a dynamic economy functions. Political pressure becomes divorced from economic realities, with toxic consequences for society. Priorities focus on distribution of national income, rather than on how to expand activity.

Rural regions rely disproportionately on welfare support, state contracts and public sector jobs, which are mainly funded by fiscal transfers from the major cities. Their prospects of progress, routes to social mobility and incentive structures facing voters and decision makers are bound up with the level of spending on public programmes and projects.

Fewer ANC members in towns and rural areas work in the private sector or are entrepreneurs or business managers. More are employed in public administration, rely on grants and free basic services or are unemployed and desperate for support. Outside the cities, fewer ANC members and officials interact with business people because the government has a larger presence in people’s lives.

Weaker relationships with private companies sow the seeds of mistrust and doubt. Those with no stake in the economy are more inclined to blame business for withholding investment, shifting profit elsewhere, blocking transformation and exploiting vulnerable workers. The vital role of public-private sector
co-operation in establishing the conditions for investment and inclusive growth in a mixed economy is overlooked.

Suspicions about private enterprise create fertile ground for populist corrective actions focused on tighter regulations, higher taxation and threats of expropriation. Business is a cash cow from which to extract resources for state spending rather than a strategic partner with useful capabilities, know-how and energy to harness and with whom to negotiate development schemes.

The consequence of popular power’s isolation from the hubs of economic decision making is stagnation. Accountability evaporates across society and opportunism thrives in the business sector and in the state.

Investment falters in a noxious environment, job losses rise, consumer spending languishes and tax revenues dwindle. The political dynamics react by becoming more inward-looking, resulting in erosion of support in the economic heartland. As the golden goose stops laying eggs, resource transfers to other regions are squeezed, austerity looms and the patronage machine runs out of steam.

It will take far-sighted political leadership to curb these trends with a more inclusive vision. The interests of different economic and social constituencies need to be accommodated in a way that is financially sustainable and builds a more productive and prosperous society. This requires deeper consideration than cosmetic calls for unity.

• Turok is executive director and Visagie a research specialist at the Human Sciences Research Council. They write in their personal capacities.

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