Danger of EFF’s economic populism
ANC must deliver real growth to counter threat from new party
THE biggest surprise of the 2014 election was the extent of support for Julius Malema’s upstart party, the Economic Freedom Fighters. Malema’s surge, however, has only been possible because of the failure by the ANC and other parties to meet the expectations of its support base when it comes to the economy, jobs and its much-touted promise of a “better life for all”.
It’s true that the ANC can take credit for its economic stewardship over the past two decades: the economy has become a powerhouse on the continent, and South Africa is now renowned as one of the major emerging international economies.
But other parts of society view this through a more pessimistic lens.
These critics blame the ANC for stifling growth through institutionalised corruption, wasteful expenditure and a lack of accountability. The party has also failed to find sustainable solutions for South Africa’s unemployment, poverty and economic inequality problems, with an increase in service delivery protests across the country.
Loath as South Africans are to suggest parallels with Zimbabwe, there are some intriguing comparisons that must be made.
We’re now a democracy that is 20 years old — the critical stage of economic and social development at which Zimbabwe’s fortunes turned.
Having gained independence in 1980, it was only in the year 2000 when, for justifiable reasons or not, the patience of Zimbabwe’s population with the Zanu-PF government began to run out.
Over those two decades, President Robert Mugabe’s party had failed to provide the meaningful socioeconomic fruits of independence to the country’s voters.
This growing impatience led to a surge in opposition politics.
The Movement for Democratic Change, formed in 1999 by representatives of a wide range of interest groups, capitalised on public despondency and succeeded in creating the first real threat to Zanu-PF in Zimbabwe’s post-independence history.
The MDC talked tough. It called for the renewal of a range of national issues as well as a plan to acquire six to seven million hectares of underutilised and multiple-owned land for resettlement. In 1999, 11 million hectares of the richest land was still in the hands of about 4 500 commercial farmers, most of them white.
Land had been a source of political conflict in Zimbabwe since colonisation and Zanu-PF’s attempt to acquire and redistribute land in the first two decades of independence, subject to the payment of fair compensation from willing sellers, was unsuccessful.
So, in the face of the MDC challenge as well as a desperate need to maintain political relevance, Zanu-PF in 2000 embarked on a chaotic fasttracked land reform programme in which more than 4 000 productive farmers were simply evicted.
Mugabe’s party was so jittery that, in the months leading up to Zimbabwe’s 2002 presidential elections, Zanu-PF, assisted by state security agents and war veterans, set about extensive intimidation and clampdown on opposition supporters.
The country stumbled from disaster to disaster up until 2008 when, facing jaw-dropping hyperinflation, it “dollarised” the economy. Economic growth rebounded; investors dipped their toes in the water again.
Now, all those gains in the past six years are at risk again.
In last year’s election, Mugabe was declared the winner — despite strong international criticism of the organ- ised subversion of the electoral process.
The European Union and the US imposed sanctions on members of the Mugabe regime.
The cumulative effects of the sanctions and Zimbabwe’s ill-considered land reform contributed significantly to the country’s economic collapse.
Now compare Zimbabwe’s political situation to the rise of the EFF, which so severely ruffled the ANC’s feathers in the 2014 elections.
Malema’s party rode on talk of land redistribution, nationalisation, and minimum wage — a delightful tune to the ears of the poor majority.
The bad news for the ANC is that the EFF is not likely to suffer an early death. The EFF presents perhaps the single biggest threat to the ANC since democracy.
The real danger for South Africans is that Malema’s success could tempt the ANC-led government to take the politicking and populist route adopted by our northern neighbour.
This would be a tragedy. Our ability to safeguard our future economic standing requires us to adopt sustainable economic policies focusing, for instance, on creating at least one million small businesses by 2020. If we can do that, we could create five million jobs.
There’s no reason we can’t. This country, which has just been through its fifth democratic election, has shown it has the nous to deal amicably with the past.
But the ANC needs to deliver economic growth that leads to poverty reduction on a sustainable basis — not a few quick hits that appease the populists. Big business and active citizens must hold the government to account for meeting this goal.
Mohamed is the chief investment officer of Aeon Investment Management