The ANC: The spell is broken – Politicsweb, 5 August 2016

By John Kane-Berman

ANC's drubbing more profound than figures suggest

The thrashing South African voters gave the African National Congress (ANC) in the nation-wide municipal elections on 3rd August is greater than the actual statistics suggest. This, after all, is a political organisation among whose main achievements have been the creation of a welfare state, the implementation of a major programme of redistribution, the expansion of the public sector payroll, and the enforcement of more and more racial preferencing. 

The figures are startling. Government expenditure as a proportion of gross domestic product (GDP) has risen from 26.4% when the ANC came to power to a budgeted 32.7% this year, an increase of 24%. Over the same period the share of government spending accounted for by social security (education, health, welfare, and housing) has risen from just below 45% to almost 60% - a 33% increase.

The number of beneficiaries of social grants (the largest component of which are child support grants) has risen from 2.54 million in 1998 to 16.78 million. This is an increase of 560%. The proportion of children attending schools which do not charge fees has gone up from less than 1% in 2002 to 59% in 2014.

Government employment (including national, provincial, and local government, as well as parastatal organisations) has risen from 1.57 million when the ANC came to power to 2.03 million in 2015. This is an increase of 29% in the number of people on the public payroll.   

By far the largest number of beneficiaries of all these policies are of course Africans, who comprise 81% of the population but of whom a very large number either boycotted the municipal election or voted against the ANC. What a wretchedly ungrateful bunch of people voters can be! 

To make matters worse for the ANC, its electoral drubbing occurred despite its racial preferencing policies. There are no official figures for the cost of Black Economic Empowerment (BEE) deals undertaken in the private sector, but by now it is probably reaching R1 trillion. Also designed to benefit Africans, often at the expense of the coloured and Indian as well as the white minority, are the increasingly onerous "employment equity" laws. The third major component of racial preferencing is procurement, which is designed to give black business a leg-up in tendering for contracts.

The major beneficiaries of racial preferencing legislation are the black middle class. South Africa's industrial relations laws are colour-blind, but their major beneficiaries include the black middle class as well as organised labour. A national minimum wage is imminent. Although some of the legislation in question has now been put on hold because proper procedures were not followed when it was enacted, the ANC has promised accelerated land reform and armed itself with greater powers of expropriation. 

None of this saved the party from humiliation at the hands of voters. Nor did its impressive track record in the provision of housing and other amenities. The corruption which is now the ANC's single most important distinguishing characteristic was no doubt a factor. Another may have been its inability, whether through corruption or incompetence, to fulfil all the promises of a better life for all that it so glibly makes, fuelling a pervasive sense of entitlement that sometimes boils over into public violence. Yet another factor may be the 140% rise in unemployment from 3.7 million in 1994 to 8.9 million this year. And yet another may be the continued prevalence of crime, from the petty to the most brutal.

But one thing is certain: the ANC's spell has been broken. For that the country must thank President Jacob Zuma. But the failure is not only his: it is the failure of the whole package of "transformation" and redistribution policies that began when his party came to power 22 years ago. And his government has run out of money. Modernisers in the party now have their chance.

* John Kane-Berman is a policy fellow at the Institute of Race Relations, a think-tank promoting political and economic freedom.

Read the column on Politicsweb here.