SA’s short-term pain or long-term gain future

If #CR17 and his reformist faction win decisively in December, it will probably mean an ANC victory in 2019, as the party will be able to attract disillusioned ANC supporters currently not voting

MUCH depends on the outcome of the ANC’s elective conference — what is the best scenario for the country? South Africa is at a crossroads. The political choices to be made during the African National Congress’ (ANC) leadership elections on December 17 will determine the country’s economic and developmental future for years to come.

This is essentially a choice between short-term pain (a Nkosazana Dlamini Zuma or #NDZ win) and subsequent long-term gain (the introduction of competitive politics during the 2019 elections), versus short-term gain and long-term pain (a Cyril Ramaphosa or #CR17 win) and the probable continued dominance of the ANC in government. Single-party dominance is seldom a long-term asset, and by 2019 the ANC will have been in power for 25 years.

If #CR17 and his reformist faction win decisively in December, it will probably mean an ANC victory in 2019, as the party will be able to attract disillusioned ANC supporters currently not voting.

In “Fate of the Nation” I estimate that the ANC could obtain a comfortable majority of around 59 percent of support in this scenario. South Africa would revert to its average historical growth rate of around 3,4 percent of GDP over time, although annual rates would fluctuate.

In his ANC election manifesto published in Business Day in November, #CR17 has committed to a 2018 growth target of three percent. This is only possible if South Africa can avoid the downgrade of our long-term local currency debt ratings by Moody’s in February 2018.

That downgrade is virtually assured if Jacob Zuma remains president into 2018 and Finance Minister Malusi Gigaba presents the 2018 /19 budget. Once South Africa is downgraded, growth will remain constrained for years.

The only way to avoid a downgrade is for the newly elected ANC leadership to recall Zuma in early January, and for the National Assembly to elect a new South African president (#CR17 in this instance) who will appoint a new cabinet, including an experienced and trusted replacement finance minister.

The more likely muddling-along scenario — which I’ve named after the national soccer team “Bafana Bafana” — is of a compromise outcome, where #CR17 narrowly beats #NDZ to the top spot in the ANC’s elections. We know the conference won’t immediately proceed with the elections of the other members of the top six (or top nine if the ANC constitution is amended the previous day).

This is a scenario where, after the announcement of #CR17 as president, #NDZ is nominated for election as deputy president of the ANC from the floor, and elected as such. The national executive committee (NEC) emerges as a mixed team of “Reformers” and “Traditionalists”, and #CR17 will take time to consolidate his grip on power.

The outcome is the bumbling-along, talk-left walk-right governing party and increasingly dysfunctional alliance with the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) we’ve seen for years.

Even this divided party would be an improvement on the current chaos within the ANC and in government. Instead of a cabinet comprising people of questionable ethics, proven incompetence and friendship with the Guptas, the “Bafana Bafana” future is one of some improvements in the coherence of government policy and implementation.

This outcome though would be constrained by the need to include prominent figures from the #NDZ camp in cabinet, many of whom are ethically compromised or corrupt.

South Africa would still be downgraded by Moody’s due to its inability to rapidly agree and implement the obvious measures required to unlock growth. Zuma and his cabinet would probably be recalled in about mid-to late-2018, but too late to improve our short-to medium-term economic prospects.

In this scenario, I expect the ANC to get around 53 percent at the polls in 2019, but to lose Gauteng to a DA-led alliance.

An unlikely, but not impossible, scenario is that of a “Nation Divided” — where #NDZ and her traditionalist faction within the ANC triumph in the December 2017 elections.