OPINION

Rheul Khoza's oligarch model

Shawn Hagedorn says the constitutional order now represents an existential threat to the ANC

Prioritising black oligarchs

1 August 2023

Common among the flurry of comments following Rheul Khoza’s recent speech at the Black Management Forum (BMF) is the presumption that our democratic era will endure. We should interrogate that presumption and then freshly consider Khoza’s views.

If, when 2030 arrives, the ANC has been ousted from the Union Building, many of their senior leaders would then face criminal prosecution. This seems to have inspired the party to engage its underutilised long-term planning capacity.

Whereas the constitution had been useful for the ANC, it now represents an existential threat. Meanwhile, their policy biases sabotage both domestic growth and success in today’s ultra-competitive and highly capitalistic global economy. They favour isolationism and feudal-like hierarchies. Khoza’s comments echo such sentiments.

Only a few years ago, it was tempting to think that the likes of Jacob Zuma and Ace Magashule were outliers and that the ANC’s leadership was being cleansed. Ensuing events have made such hopefulness look hopelessly naive.

Zuma aggressively expanded the ANC’s deep seated preference for a political economy dominated by an elitist patronage system. It was upon his return from one of his many voyages to Moscow that then-President Zuma heralded his plan to create a hundred black industrialists.

Having local oligarchs beholden to political minders remains an ANC priority as it mitigates the risks of pro-democracy CEOs impeding the party from transitioning our political dispensation toward a post-democracy era. Scholars can squabble over whether the party’s leaders seek a dispensation à la the National Democratic Revolution or some generic form of neo-patrimonialism. Yet they need executives who are both compliant and capable.

Irrespective of whether the ANC’s leadership is more a collection of communists or thugs, they can, with reasonable confidence, expect to discontinue legitimate elections before 2029. If this is so, their inability to produce capable executive cadres is the ultimate threat to the party’s viability - and to peaceful coexistence among South Africans. However one might interpret Khoza’s complex relationship with the party, such inabilities would have shaped the views he expressed to the BMF.

Global backdrop

Had Russia’s invasion of Ukraine been as successful as most of the world’s top military minds expected, the West would have been on its back foot. Promoting the BRICS consortium could then have been repackaged, in SA and regionally, as a global south leadership forum. Autocrats and their admirers would have been able to exploit this to counter western criticisms of their violating their citizens’ rights. They would have turned up the volume on their self-serving and dishonest messaging about seeking a more equitable world.

Amid such a global backdrop, the ANC could have more easily characterised the constitutionally enshrined means to hold elected officials accountable as tools of western imperialism inconsistent with ubuntu. The ANC has much energy for wordsmithing such contrivances.

A rehearsal

Heads of businesses and households must take a view on the long-term course of loadshedding. But how many of us realistically assess the odds of legitimate elections being held in 2029?

By then over half of our twentysomethings will have been unemployed for many years. Such statistics for SA’s thirtysomethings won’t be noticeably better. It will be child’s play to spark massive social unrest reminiscent of the July 2021 uprisings. The pandemic lockdowns also resembled a rehearsal.

As few economists expect the next few years’ economic growth to catch up with our expanding population, declining household incomes will undermine social and political stability. Meanwhile, it is as if the ANC is doing everything it can to discourage capital mobilisation.

Khoza’s references to Afrikaners and Stellenbosch were merely wrapping paper. Rather we should focus on:

“To produce something like two, three or four but less than 10 billionaires in close to close 30 years, it cannot be justified.”

Khoza said South Africa should carve its own path to inclusive economic success instead of acting like an outpost of Europe.

“If you look at us as a political economy of today, we come across as very much like an outpost, not as a country in Africa. That cannot be corrected by culture, it cannot be corrected by begging, it cannot be corrected by limp-wristed legislation.”

He said South Africa was not an emerging but a submerging economy, as it cannot produce enough of the basics such as water and electricity to cater for all its people.”

Coerced

He wants what the ANC wants: an isolated economy run by politically beholden oligarchs, whereby political elites cater for the masses with grants. Richly resource-endowed countries can sustain such structures only so long as the next wave of marginalised young adults can be coerced to accept their dreary consequences.

President Putin is able to confiscate foreign companies, most recently the Russian operations of Danone and Carlsberg, and put his cronies in charge. This recipe, along with prescribed assets and the like, can keep an autocratic regime in power for a long time.

Such structures were common across the world for many centuries. They were then slowly eclipsed by representative forms of government. As industrialisation generated much wealth and international competition, societies with burgeoning middle classes realised they needed ways to hold their political leaders accountable.

Expansion of prosperity

The first cold war set the stage for the most rapid expansion of prosperity in the history of the world. One country after another followed Japan’s lead and imported know-how, adapted it for local production, and then created many millions of jobs adding value to exports. Asia is now immensely wealthier and vastly more democratic.

This cold war favours African workers adding value to exports to the West due to formidable factors spanning: the shift to services; the prevalence of European languages; Africa’s youthful population versus contracting population in most western countries; and geopolitics.

The ANC, and local business people like Khoza, advocate for an oligarch model which ignores not only the interests of the next generation but also the fact that the world has entered a new post-industrial phase. Manufacturing and mining are destined to play smaller roles. AI will increase the premium employers place on youth.

The post-Cold War period began barely three years before we commenced our democratic era. It ended in February of last year. When I read Khoza’s remarks, I became a bit more convinced that next year’s will be our last legitimate national election.

@shawnhagedorn