ANC-EFF coalition: A doomsday scenario for SA’s future – Corrigan - Biznews

The prospect of the ANC losing its majority raises concerns about a potential coalition with the EFF and Jacob Zuma’s Umkhonto we Sizwe party. Such an alliance, termed a ‘doomsday coalition’ by DA leader John Steenhuisen, could push a radical agenda with significant economic and political implications. This coalition might prioritize state control, aggressive redistribution, and challenge constitutional norms, risking further instability and economic decline for South Africa.

Terence Corrigan

The prospect of the African National Congress (ANC) losing its majority has caused much speculation about its post-election government. 

South Africa is on the cusp of an era of coalitions, which opens up possibilities both hopeful and despairing. A major theme in public commentary – leaning towards despair – has been the possibility of a major reversal for the ANC, and a subsequent coalition with the Economic Freedom Fighters (EFF), and perhaps also with Jacob Zuma’s Umkhonto we Sizwe party.

This is what DA leader John Steenhuisen termed a ‘doomsday coalition’.  Even for those with little love for the DA, such as Melanie Verwoerd and Adriaan Basson, this is a concerning option.

The ANC and EFF would both describe themselves as ‘liberation movements’. Seeing themselves less as political parties than as the authentic embodiment of the soul of the nation, they presume a particular entitlement to power, and to the right – indeed the duty – to remake society in their ideological image. Call this the idea of ‘hegemony’, an unchallenged leadership position to which all important social formations will ultimately defer.

The ANC’s outlook has drawn on elements of ethno-racial and class-based analysis to understand society and to formulate its programme. For the ANC, this has been the key to containing a multi-class coalition of interests: it would claim to represent those contending with disadvantages of class (poor, unemployed or working-class people) and those suffering from historical or current racial discrimination (‘Africans in particular and Blacks in general’). Contemporary South Africa has evolved, and the two interests are now often contradictory. Although cognisant of this contradiction, the ANC has attempted to maintain both sets of commitments. In practice, this is expressed through a quasi-Marxist worldview reflected in its policy thinking and its grand narrative, the National Democratic Revolution, and an often-crude populist appeal to racially defined grievances, solidarity and redress.

Professed radicalism
The EFF has positioned itself as the true expression of the ANC’s professed radicalism, describing itself as Marxist, Leninist and Fanonist. Its politics reflects aggressive rational nationalism and dirigiste thinking to tackle South Africa’s problems. The EFF’s commitment is that – unencumbered by the restraints of South Africa’s political settlement and uninhibited by commitments other than to its own constituency – it will achieve what the ANC had historically been committed to doing, but has failed to do. It pledges to fundamentally change the economic structure, including by widespread nationalisation and state control. This was in keeping with the position of the ANC prior to the transition.

A noteworthy observation is that a number of trenchant criticisms of this mode of politics have come from observers on the political left: their concern being that a crude populism articulated around race has been used to deflect attention from the imperatives of addressing class-based concerns (notably mass poverty), and also the pathologies that have become part of the political behaviour of large parts of the post-apartheid elite. This includes the corruption, the disconnect from (if not overt hostility to) community activism and a willingness to use repression to evade accountability. As Niall Reddy argues:[1]

The populist turn is already well underway here. Its main incarnation until now has been the Economic Freedom Fighters (EFF) led by Julius Malema. When the EFF launched in 2013, its ‘Marxist-Leninist-Fanonian’ program combined appeals to class and ethnicity in roughly equal measure. Since then, class issues have gradually fallen off in its agenda, while the racial identities it invokes have grown narrower and more chauvinistic, bounded by anti-Indian and now anti-foreign vitriol. It increasingly converges with the populist movement that gestated within the ANC during Jacob Zuma’s tenure, now organized under the banner of ‘Radical Economic Transformation’ (RET).

Both parties are both approaching this election acutely conscious of South Africa’s crises. For the ANC, this is an indictment of its rule; for the EFF, an opportunity. Looking at their manifestos, each proposes a state-centric path for South Africa. The EFF, for example, envisages large-scale nationalisation (which includes abolishing the principle of private ownership of land, and nationalising banks, mines, telecommunications companies and some construction firms). While not as emphatic, the ANC pledges to introduce prescribed assets and to proceed with the introduction of the National Health Insurance plan (recently signed into law). Nevertheless, implicit in both approaches is the narrative that solutions based on private enterprise and the market (pejoratively referred to as ‘neoliberalism’) have failed and need to be replaced by a stronger role for the state – the dispute perhaps being whether this should take the form of a full-blown command economy, or an East Asian-style interventionist developmental state.

Nominally reformist incumbency
Both parties also evince an ongoing commitment to race-based transformation. In recent years, despite the nominally reformist incumbency of President Ramaphosa, the ANC and the government it heads have doubled down on these policies – such as the introduction of ministerially determined racial quotas for firms – indicating a willingness to accept considerable costs in this regard. Much the same dynamic has been at play regarding the localisation of production. The EFF promises to ramp this up, at one point stating in its manifesto that it will ‘prioritise transformation over price considerations’.

Finally, there is the question of constitutionalism. The ANC has a chequered relationship with the Constitution and the rule of law: on the one hand claiming to have brought it about and to be its champion (taking pride in the country’s Constitution), while on the other, prominent members have denounced constitutionalism as a culturally inappropriate imposition that has prevented the ANC and the state from achieving the justice that the country demands.

The latter dynamic is rather more pronounced under the EFF. While it may at times refer to the Constitution to justify particular positions, this has been largely opportunistic. Its often violent and intimidatory behaviour and disdain for some of the mediating institutions in the country (such as the judiciary) speak to a worldview at great odds with constitutionalism. Its manifesto makes clear that it does not see itself as being bound by the ‘elite pact’ of the transition, and proposes sweeping changes to the Constitution, including abolishing the provincial sphere of government.

Troubling questions
These factors in combination raise troubling questions about the character and policy direction of a government founded on a coalition between them. The sections that follow explore a possible future that such an arrangement could deliver to South Africa.

To speculate on a possible coalition between the two parties means making a number of assumptions. The ANC would have failed to achieve a majority, falling to something in the lower forties, and turned to the EFF, which would have secured something in the 10% to 15% range. The ANC would be the numerically dominant force. Together, the parties would probably be unable to muster the two-thirds majority needed to amend the Constitution, though this might be possible in conjunction with other parties that might share the coalition’s worldview, such as MK.

It is a reasonable assumption that a post-election government combining the ANC and EFF would pursue a ‘radical’ agenda, partly for reasons of ideology, partially in an  attempt to deal with South Africa’s polycrisis, and partially a push to extract patronage.

The Economy
Much has been written in recent years about the rise of political outsiders in reaction to economic and social dislocation. A key concept here is populism. Populism is the idea that unbridgeable divides exist between competing groups in society, specifically ‘the people’ and the elite. The hardships and frustrations experienced by the people are explained by the indifference or self-interest of the elite.

Populist economic policy seeks to deliver rapid wins to the populist constituency, with redistribution at the core of the strategy. This is a likely template for what an ANC-EFF government would seek to implement.

Populist experiments
One of the seminal analyses of populist economic policy is a 1990 contribution edited by Rudiger Dornbusch and Sebastian Edwards, entitled The Macroeconomics of Populism in Latin America. Based on the record of various populist experiments in Latin America (and broadly confirmed by the experience of such countries as Venezuela in the past two decades), it proposed that in broad terms, populist economics moves through four phases.

The first of these involves a redistributionist push and the reactivation of economic activity. Idle capacity can be brought into use, reserves spent and social and labour programmes instituted. For a while, things seem to be working, and the approach is vindicated.

In the second phase, problems emerge. The depletion of reserves and growing demand for goods create shortages, spur inflation and aggravate the budget deficit, to which the government responds with policy tools such as price controls.

The third phase sees failures in the economy becoming undeniable. Inflation and foreign exchange shortages choke the economy and drive down living standards. This cannot be countered with wage hikes or subsidies. Policy becomes unstable.

Finally, in the fourth phase, the damage done prompts a stabilisation process, usually under a new government, and possibly under the aegis of a body like the International Monetary Fund. By this time, however, not only has economic performance suffered, but so have the country’s fundamentals, as skills and capital have fled. The circumstances in the country, and the economic conditions of the nominal beneficiaries, may now be worse than at the outset.

Social grants
Following this pattern, an ANC-EFF coalition would likely launch itself without great fanfare or a major deviation from existing policy. Elements of policy corresponding to the first phase have already been undertaken. Post-apartheid South Africa has instituted an extensive system of social grants. About half of South Africans receive a grant, and this is the main source of income for about a quarter of all households,  whose sustainability has long been a cause for concern. More recent interventions like the national minimum wage, the Social Relief of Distress grant and the accessing of the Gold and Foreign Exchange Contingency Reserve Account denote the ongoing pressure for and commitment to redistributionist and welfarist measures, even in the face of severe fiscal constraints. The ANC has committed to extending this in the next term, notably committing itself to implementing the National Health Insurance system:  a massive expenditure whose magnitude has not been calculated.

Concerns certainly exist about the fiscal direction, but it is at least familiar to observers and to the business community. The ANC – having been in government long enough to understand the implications – would also be keen to avert investor panic, and would insist on retaining the finance portfolio, whose incumbent would be selected as a safe pair of hands. (Note that EFF leader Julius Malema has said that a condition of a coalition would be to make his colleague Floyd Shivambu the finance minister. If this is conceded at the outset, the developments discussed below would be accelerated, but if it is not and the EFF is nonetheless prepared to accept a coalition agreement, its goal would be to secure this office later on, to control the state’s purse-strings.)

The EFF has stated that a coalition with the ANC would rest on three non-negotiable policy items: expropriation of land without compensation, free education (to which the government has already made considerable commitments), and nationalisation of the mines. It can be assumed that the ANC would have made a public commitment to carrying them out. Against this background, South Africa would experience accelerated capital flight and emigration, along with the loss of economic resources that these represent.

Interventionist policies
In policy terms, the early period of the government would likely be characterised by a combination of investigations into the interventionist policies already proposed by both the ANC and EFF.  Introducing prescribed assets is an obvious example. Where these are already well advanced or passed into legislation, their implementation will begin in earnest. The National Health Insurance and expanded ‘free’ education would probably be the flagship initiatives here.

Rising spending with a deteriorating fiscal base is already a point of major concern. Additional projects will demand greater resources. This will be coupled with an acute sense that public demands need to be met if the government is to have any prospect of long-term incumbency. In addition, there will be considerable pressure from within the government to ignore fiscal discipline in pursuit of its developmental mandate. Initially, this would likely take the form of ‘low-hanging fruit’, such as increases in corporate taxes (which the EFF’s manifesto calls for), although these will not be sufficient to plug the gap over the long term.

At the same time, both the ANC and EFF pledge to provide support to black business (Broad-Based Black Economic Empowerment). Considerable resources have been put into race-based preferences for procurement in awarding contracts, as well as support through industrial policy. Opinions differ on the potential of these interventions to drive economic growth and development, but in practice there is considerable evidence that they have been abused and have played a significant role in the various pathologies that have plagued South Africa in recent years. 

Doubling down
This implies a doubling down on policies that have imposed costs on the economy and have enabled a collusive relationship between the state and particular firms. This will come with additional direct fiscal costs and indirect costs to the economy.

As this unfolds – call this the early phase, over a year or two – South Africa’s precarious fiscal position would have declined, though not catastrophically. Increased social spending would have provided the country’s poorest people with a modest improvement in their living conditions; promises of more as the ‘revolution’ develops would create heightened expectations.  

However, negative sentiment accompanying the new government along with its policy choices would have had a visibly negative impact on investment, already at anaemic levels. Whatever growth the country experienced would be driven by consumption, beneath which the productive economy would be stalling. In particular, any employment growth would likely be within the state and its associated entities, or indirectly premised on this support.

The government would also be trying to fend off the demands created by competing interests. Economic inefficiencies created and sustained by a patronage machine and by an ideological aversion to change would further undermine South Africa’s economic competitiveness and stall growth. Large parts of the population would be dependent on state welfare or on state employment, which would only be possible by increasingly draining resources from the productive economy. Inflation would erode living standards, and transfers would become increasingly untenable.

The resultant pressures would signal the beginnings of the real populist crisis.

Parlous investment destination
With South Africa becoming an ever more parlous investment destination, its economy would not be able to underwrite the government’s ambitions. Ideological and political considerations would preclude changing course, so, following the populist playbook, any solution would be essentially a political one. 

Three courses of action appear likely.

The first would be to intensify existing policy. Demands on resources through taxes, prescribed assets and empowerment requirements would increase – much of this being possible through executive action. (By this point, a finance minister more in sync with the prevailing mood in the government would have been appointed.)

The second would be to engage in asset seizures. This would be the moment when the EFF’s demands for nationalisation and expropriation without compensation would be actioned. A custodial taking of land, for example, would enable effective state control over the agricultural industry. Nationalisation of the mining industry, whether outright or through demanding that equity be handed over to the state, would be hailed as the long-overdue resolution of an historical injustice and the unlocking of South Africa’s natural wealth.

The third would be to attempt prescriptions based on Modern Monetary Theory (MMT). This is the idea that as long as their debts are denominated in their own currency, governments cannot run out of money. Instead, they can create money – effectively, run the printing presses in the central bank – and then plough this into monetising their debt and funding their operations. A vocal community of advocates has developed in South Africa for this proposal: it promises (theoretically) an almost painless pathway to alleviating deprivation without making any real political compromises or achieving any economic take-off at all.

Palliative
Each of these would be at best a palliative. The first two options would merely compound the crisis that afflicts the functioning of the economy, further eroding the viability of investments and economic competitiveness. The South African state lacks the ability to manage a command economy, and satisfying licit and illicit politically- driven demands would quickly drain the residual value in the economy. The third option would compound the inflationary dynamics in the country, conceivably leading it towards hyperinflation, wiping out savings and driving the rand towards worthlessness.

Once this point is reached, South Africa would in many respects be on the way to becoming a purely extractive economy. What sophistication would remain would be limited to its minerals, access to which would be mediated through political brokers and connected businesspeople.

Constitutions and Institutions
Liberation Movements have an uncomfortable relationship with constitutionalism. Constitutions and institutions dilute majoritarian principles and restrict the freedom of government action. Organisations with a messianic self-image see little legitimate reason for this – quite the contrary in fact. Thus far, the ANC has had a mixed record in this respect. For the most part, its electoral dominance has meant that the ANC has been able to achieve its goals within the confines of the Constitution and the law.

It is accurate to say that the ANC’s constitutional commitments have been severely qualified by its commitment to party-dominated ‘transformation’. This is defined as ‘extending the power of the National Liberation Movement [the ANC] over all levers of power: the army, the police, the bureaucracy, intelligence structures, the judiciary, parastatals, and agencies such as regulatory bodies, the public broadcaster, the central bank and so on’. The most notable violation has been the deliberate politicisation of the state via so-called cadre deployment. As the Report of the Zondo Commission noted, there was no legal or constitutional justification for a party committee (operating outside public scrutiny) influencing public appointments.

It is doubtful in the extreme that the EFF would consider itself bound by constitutional limitations. It would probably envisage asserting for itself the ‘hegemony’ over the state and society that the ANC has historically claimed.

From the ANC’s perspective, add to this the shock of having come close to losing power – and the very real concerns that a change to a reform-oriented government could not only mean a loss of office, status and income opportunities but prosecution for crimes – and an ANC-EFF coalition could, therefore, signal a more aggressive form of liberationist politics. At the point of a possible loss of power, a long-term incumbent will need to choose between respecting the systems and institutions that had hitherto legitimised it or abandoning them to retain power even at the expense of legitimacy.

Frequently abused
South Africa has a reasonably strong set of constitutional institutions, although they have been frequently abused and are sometimes distrusted. Its courts seem to have been relatively resilient to party influence and have often ruled against the government. This provides a degree of protection against potential abuse.

Protection is also afforded by an active (reformist) opposition and an engaged civil society. The business community has tended towards seeking the goodwill of the government, though the state of the country has prompted more direct and confrontational criticism in recent years; the accession of a government openly ideologically hostile to business would probably prompt the business community to take a more resolute line in defending its interests, and perhaps in aligning itself with reformist forces in the opposition.

Against this, South Africa has a weak and often unprofessional bureaucracy, which has not only been inappropriately politically influenced, but has also been penetrated to an extent by criminal interests. There is also scope to suborn independent institutions through selectively changing their mandates and using the power of legislative and executive powers of appointment.

The possibility cannot be excluded that an ANC-EFF coalition would attempt to purge and replace office holders deemed insufficiently committed to the new administration. More likely, however, would be that this would be an extended process, appointing favoured nominees as positions became available, or perhaps pressuring and paying out incumbents to resign.

Vocal
Concurrently, as noted above, the EFF has been vocal about wishing to see the Constitution amended. A coalition agreement would almost certainly be founded on that. However, the scope of what the EFF is hoping for – such as amending the Bill of Rights and abolishing provincial government – would necessitate legislative majorities that might prove beyond the reach of the government. Even if such majorities could be put together, making these amendments could not be achieved quickly.

So, the country would likely face a protracted period – again, a year or more – of what is often termed in South Africa’s policy lexicon, ‘uncertainty’. In this case, though, it would not be an individual policy trajectory that was uncertain, but an entire package of democratic rules. It is to be expected that this would be accompanied by strident and incendiary rhetoric from within the coalition about the necessity of these changes and the nefarious motives of those opposing them.

The EFF and the ‘RET’ faction of the ANC are distrusted by many organised and activist interests across the ideological spectrum. The stated intention of the coalition to introduce far-reaching changes to the constitutional order would invite significant resistance, including among some who might be expected to be broadly sympathetic to the policy path of the coalition. Public debate would become increasingly heated, and as opportunities arose, the coalition would find itself opposed in court or in other forums.

There are grounds for optimism that South Africa’s constitutional core might be able to hold its own, and ward off the more egregious dangers towards which the coalition might be inclined, at least for a limited time (and assuming, of course, that cadre deployment does not capture the institutions).

Dangers of securitisation
The workaround here would be increasingly to disregard South Africa’s institutions. Concerns arose during President Zuma’s presidency about the dangers of securitisation. For an ideologically confrontational government, presiding over declining fortunes and containing a number of compromised people, security agencies and opaque ‘securitised’ governance would be an attractive option. South Africa’s civil institutions would rapidly be white-anted.

As South Africa’s economic decline accelerated, governance without oversight or restriction would become the preferred means of action. Failing economic conditions and weakening governance would begin to disassemble the state, and to the extent that it remained functional, it would reflect limited sectarian interests, sometimes blatantly criminal. For example, control over mining permissions (or over contracts in the event of nationalisation) would be a lucrative source of extraction and patronage; capturing a municipality could enable what remains of the rates base to be plundered; the possibilities amid decline would be extensive, at least for as long as resources lasted.

It is also at this point that a turn to state-sanctioned lawlessness – in the form of land and property invasions – would be conceivable. To this point, the government has stressed that land reform and redistribution efforts should take place lawfully, even if in the event it has frequently proven powerless to prevent land invasions where they have taken place. In an atmosphere of crisis, it may suit an incumbent government to tacitly or openly encourage this sort of action as a means of deflecting attention from its failings, and to deliver the appearance of benefits to its supporters.

Enclaves
The unravelling of the political order would not be uniform. Some jurisdictions – perhaps municipalities or provinces – would retain enough integrity to make generally functional governance possible. This would not shield them completely, but it would allow enclaves of a modern society to survive.

On the other hand, this conjunction of circumstances would open space for non-state actors to step into areas that have effectively been abandoned by the formal state. Traditional authorities are an obvious candidate here, as are taxi associations, organisations like the Solidarity movement and religious associations. All of this was on display during the July 2021 riots.

But for South Africa as it currently exists, a substantively functioning state is a precondition. In this scenario, there is a real possibility that at its end, a comprehensively failed state would loom.

Conclusion
Conceptualising possible futures is inherently difficult and speculative. This analysis has presented a pessimistic view of what could lie ahead. It is necessary to reiterate that this is not a prediction. South Africa’s history has gone through numerous instances in which the odds of prevailing circumstances and the choices of political actors defied expectations. It is not impossible that an ANC-EFF coalition could do likewise.

But on the available evidence, this is difficult to imagine. Neither party has over the past decade demonstrated a reassuring commitment to probity in governance, or to prudence in politics, and while credit should be given to the ANC for having not lurched in a fiscally populist direction thus far, the cumulative effect of economic choices made has pushed South Africa to a point where that would be appealing.

South Africa is fortunate in that it does have the potential for significant resilience and resistance to these risks: a free society (at times anarchically so), a diverse media, a vibrant civil society, and a respected judiciary. Perhaps the question is whether South Africa’s people will rally to defend themselves.

‘There is no fate but what we make for ourselves.’ So goes a line from the long-running science fiction Terminator franchise. As South Africa approaches a landmark election, it is a timely piece of advice.

Terence Corrigan is the Project Manager at the Institute, where he specialises in work on property rights, as well as land and mining policy

https://www.biznews.com/rational-perspective/2024/05/27/anc-eff-doomsday-corrigan

This article was first published on the Daily Friend.