Solid foundations still hold today

BEFORE 1994, the ANC was still considering wholesale nationalisation of the “commanding heights” of the economy as espoused in the Freedom Charter.

The democratic government’s economy policies of the RDP, and then Gear, changed all that.

As a result, South Africa entered a period of harsh structural adjustment that has been the subject of criticism from the ANC’s labour allies in the alliance.

Nelson Mandela was essential to Gear’s implementation, as he stood firm and told the ANC’s left-leaning allies that the policy was “non-negotiable”. To this day, the left of the SA Communist Party believes Gear entrenched and exacerbated the country’s economic inequalities.

But two analysts told Business Times that the economic reforms undertaken during Mandela’s presidency built a solid foundation for the country’s subsequent robust economic growth.

Matthew Warren, financial analyst at First Avenue Investment Management, said the policies helped avert an economic disaster. “The South African economy might not be performing at its best, with high levels of inequality, poverty, but there has been massive progress,” he said.

André Roux, co-head of Emerging Markets Fixed Income at Investec, said: “Mandela ensured that the country’s macroeconomic policy was in strong hands and that legacy persists to this day. We will probably continue to have good leadership at the Treasury and at the Reserve Bank.”—