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South Africa: A sophisticated failing state

David Himbara
By David Himbara

Professor of international development based at Centennial College, Toronto, Canada.

Posted on Wednesday, 29 July 2020 12:51

REUTERS/Siphiwe Sibeko

Life expectancy that is lower than in war-ravaged Afghanistan in an environment where the state has been captured by private interests alongside colossal mismanagement is testimony to a failing state in South Africa.

The idea might seem absurd. After all, this is a country with highly developed financial, real-estate and business-service sectors on a par with those of the industrialised world.

The Johannesburg Stock Exchange is the biggest in Africa and the 19th largest in the world. South Africa is an industrial powerhouse which manufactures textiles, metals, chemicals, food-processing, automobiles, electronics and armaments.

READ MORE South Africa: PPC hails lack of cheap imports for surge in cement sales

The country boasts one of the most advanced telecommunications sectors anywhere. South Africa is home to world-class universities that are highly ranked for teaching, research and innovation.

How can there be a failing state in such a country?

Black South Africans remain the wretched of the earth

South Africa also remains the world’s most unequal country, 26 years after the end of the apartheid system. According to the World Bank, on the scale of 0 to 100, with 0 representing total equality, South Africa scores 63. Extraordinary poverty levels persist with unemployment rates of nearly 30%, rising to 60% among youths.

This ugly reality affects both rural and urban black South Africans. The ever-present risk of crime disproportionately impacts poor black Africans. Out of 191 countries, South Africa ranks 165 in life expectancy at 64.8 years, less than that of Afghanistan at 65 years and Haiti at 64.9 years. These two countries are unquestionably failed states.

De facto one-party state

South Africa is a classic case of a de facto one-party state, a term that describes a dominant-party system that, unlike the one-party state, allows at least nominally democratic multiparty elections. However, the existing balance of political power effectively blocks the opposition from winning elections. The outcome from a de facto one-party state and a straightforward one-party state is the same. Opposition parties have no real chance of gaining power.

South Africa under the African National Congress (ANC) is a de facto one-party state where the ruling party wins power despite its failure to improve lives, especially those of black South Africans. The corrupt nature of the ANC government is currently receiving greater attention than in the past. Under the commission set up to investigate corruption, most of the revelations concern the relationship between the former president Jacob Zuma, his family and the Guptas, three Indian-born brothers who moved to South Africa after the fall of apartheid.

READ MORE South African corruption probe awaits a star witness — Jacob Zuma

The Guptas owned a portfolio of companies that enjoyed lucrative contracts with ANC government departments and state-owned conglomerates. The Guptas also employed several Zuma family members in senior positions, including Jacob Zuma’s son. According to testimony heard at the inquiry, public officials responsible for various state bodies were directly instructed by the Guptas to take decisions that advanced the brothers’ business interests.

The ANC’s worst failure came long before Zuma. More than 330,000 South Africans died prematurely from HIV/AIDS due to the failure by the government of President Thabo Mbeki to give life-saving treatment. At least 35,000 babies were born with HIV infections. Studies have shown that South Africa experienced a decline in average life expectancy between 1990 and 2013.

READ MORE South Africa would be worse off without Mandela, despite his flaws

When Nelson Mandela was freed, I packed my bags and moved to South Africa in 1994. I left the country broken and returned to Canada in 2013. The worst I witnessed was the preventable deaths of thousands due to the ANC government’s denialism on HIV/AIDS. I still cry for South Africa.

Mismanaged institutions

Electricity utility state company Eskom has been a disaster, plagued by mismanagement and corruption. In December 2019, Eskom had to implement scheduled blackouts help prevent total collapse of an overstretched power grid. Similar measures were also put in place in 2018, 2015 and as far back as 2008.

Ratings agencies often cite South Africa’s frequent power outages as one of the main risks to the economy. Eskom’s debt is a black hole to the tune of about US$31.4 billion.

Eskom is not alone in total dependency on government bailouts. Other vital state-owned enterprises (SEOs) are dysfunctional and remain afloat only due to perpetual government bailouts. The national airline, South African Airways (SAA), the post office and the arms manufacturer Denel are a few examples.

READ MORE SAA: Will Mboweni loosen purse strings to rescue South African Airways?

South African debt stands at US$230 billion, which just increased because of the US$4.3 billion loan from the IMF for budget support. Debt as a percentage to GDP stands at 77% and is projected to reach 85% in 2021. However, the debts of SOEs including Eskom and SAA are not counted, even though these debts are guaranteed by the government. So the debt situation in South Africa is much worse than the published figures.

Land reform

The biggest ongoing failing in South Africa is undoubtedly in land reform.

Historically, land is the most contested issue, because the apartheid system denied land ownership to black South Africans. But 26 years after the end of apartheid, the ANC’s land-restitution agenda remains on the drawing board. Land redistribution is characterised by a series of ineffectual and ill-defined government programmes and a lack of political will.

The 2017 land audit established that 72% of the country’s arable land remains in the hands of whites, who account for less than 10% of the population. The most recent incarnation of land redistribution is the proposed constitutional amendment that would allow the government to expropriate unused private land without compensation and redistribute it to black farmers.

Surprisingly, the government holds significant land which could be made available for redistribution before venturing into land seizure without compensation. According to the 2013 Land Audit, state land in South Africa amounts to 17 million hectares, spread across the country’s provinces. It is a no brainer to distribute this before tackling the more complex privately-owned land.

Bottom line

Even developed states can fail if they are captured by private interests. The ANC has failed South Africa.

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