ANDILE NTINGI: The economic policies of SA’s parties are poles apart

Former president Thabo Mbeki gave the ANC an ominous warning in July, at the memorial service of governing party stalwart Jessie Duarte, that it could face an Arab Spring-like revolution if it continues to fail to tackle rising unemployment, inequality and poverty.

This warning from a party elder, who oversaw SA’s strongest economic performance in the postapartheid era, must not be taken lightly, as he fears the ANC-led government could be toppled by antigovernment protests that ousted Arab dictators such as Libya’s Muammar Gaddafi, Egypt’s Hosni Mubarak, Tunisia’s Zine El Abidine Ben Ali, and Yemen’s Ali Abdullah Saleh.

We saw a glimpse of what Mbeki was warning about during last year’s July civil unrest in Gauteng and KwaZulu-Natal, when police struggled to control widespread looting of businesses and private properties, resulting in the death of 354 people and the economy losing R50bn.

The failure to address unemployment, poverty and inequality is contributing to rampant crime and lawlessness across our country. A solution to these economic ills lies in fixing the economy, which at this juncture is stagnant and not attracting sufficient investment capital.

We are approaching a period in which we are going to be bombarded with adverts from political parties as campaigning moves into high gear ahead of the 2024 general elections. Sweet-tongued politicians are going to launch manifestos, promising heaven on earth. We will be promised implementation of policies that are going to deliver economic growth, jobs, quality basic services, and law and order, which are sadly elusive at this moment.

After contracting by 6.4% in 2020 due to Covid-19 restrictions and lockdowns, the economy recovered by 4.9% in 2021.

This year, the Reserve Bank projects the economy will grow 2%, subsiding to 1.3% in 2023 and then expanding 1.5% in 2024 — forecasts that are well below the 5.4% growth rate envisaged by government in its National Development Plan .

Comparing and making sense of the economic policies of SA’s five most influential political parties will shape the outcome of 2024’s general elections.

Do the economic policies proposed by the ANC, DA, EFF, ActionSA and the IFP have the wherewithal to deliver the prosperity and standard of living that will help SA avert its own Arab Spring?

The parties are ideologically poles apart, with the EFF subscribing to radical Marxist-Leninist socialism, while the DA, ActionSA, and IFP are proponents of capitalism, in which the markets are the primary allocators and distributors of resources, not the state. On the other hand, the ANC believes in a mixed economy and at one point promised to build a “capable developmental state” that plays a major role in the economy alongside the private sector.

However, the ANC-led government has backtracked on its policy stance and wants to partner with the private sector to deliver services. The government is now implementing structural reforms in the energy, logistics, and telecommunications sectors to facilitate greater participation by the private sector in the economy.

In February, during the state of the nation address, President Cyril Ramaphosa articulated this shift when he said: “We all know that government does not create jobs. Business creates jobs.”

In line with this policy shift, in the aviation sector the government is selling 51% of state-owned carrier SAA to a private investor, the Takatso Consortium, and in the telecom industry it has auctioned high-demand spectrum for 5G network rollout.

In the energy sector, the government is encouraging private sector investment to boost power generation as Eskom fails to meet demand while in the logistics industry, rail and ports operator Transnet has issued requests for proposals to the private sector for 16 slots for the Durban-City Deep and Pretoria and East London lines.

The economic policies of the DA, ActionSA and IFP are similar. These parties believe in free markets and less involvement of the state in the economy, indicating they are in favour of private sector industrial expansion and the extensive privatisation of state-owned entities.

In 2014, the DA released a 51-page document titled “The Plan for Growth and Jobs”, in which  it argued that the economy could grow by 8% a year and unemployment rate reduced to 11% if the country eases skills constraints, increases savings and investment, strengthens competition, and slashes the costs of transport, communication, and logistics.  The similarities in the economic ideologies of the IFP, DA and ActionSA make them more natural coalition partners than the EFF, a proponent of leftist economic policies that it says could eliminate inequality and poverty.

The EFF believes in the nationalisation of mines and banks and the expropriation of land without compensation for “equal distribution and use”. It also calls for the building of state and government capacity, which it says will lead to the abolition of tenders.

South Africans have lived with the world’s highest unemployment rate and a stagnant economy for a long time. This sad situation is unacceptable and pragmatic solutions must be found to reinvigorate the economy.

Voters have a duty to closely scrutinise the policies put forward by political parties. Perhaps South Africans need to take a leaf out of the book of Deng Xiaoping’s pragmatism — the Chinese leader is credited with modernising the Chinese economy.

In the 1960s, Deng famously said: “It does not matter whether the cat is black or white, as long as it catches the mice.”

With those words,  he signalled steering China away from socialism to market capitalism, an economic shift that made China the world’s largest industrial exporter.

• Ntingi is the founder of e-procurement company GetBiz.