The first article in this two part series can be read here.
The placemen of the ANC may want nothing to change but the world does not stand still. The great drama is the ongoing destruction of the ANC’s patronage networks. These took another hammering in the local elections with the defeat of many ANC councillors and the loss of ANC control in a number of towns and cities. Inevitably, this will roll on into losses of tenders, jobs and contracts for the BEE networks which feed off ANC control in those towns and cities.
Cape Town shows what happens when the ANC loses all its patronage networks in a city. In 2006 the ANC won 38.67% of the PR list vote in Cape Town but the DA-led coalition gained power. Gradually the DA cleaned out those networks and the scams which had created almost weekly corruption scandals in the city under ANC rule. As those networks collapsed the ANC vote fell steadily – despite the large and continuous in-migration of black voters to Cape Town. By 2021 the ANC vote was down to 18.72% (and the EFF could only manage 4.15%).
Meanwhile, as the IMF has again just pointed out, many of the country’s 700 SOEs – the other huge nest of ANC patronage networks - are collapsing. Indeed, the IMF warns that most of these should be closed down or sold off simply to prevent further losses.
You can see how desperate the situation is if you look at the projected sale of SAA and Mango. Despite the many billions in public money which have been poured into them down the years both of these companies have suffered swingeing job losses – and huge losses in value.
Even six months after the government announced the sale of 51% of SAA to the Takatso Consortium, Takatso is still not involved in the airline’s funding, management or relaunch plans and no price has been agreed. Mango has been put up for sale but its assets consist of a solitary aircraft engine and we have heard of no bidders.
Many other SOEs are in a comparable state. Look at the incredible shrinking Post Office, for example. Really, most of these SOEs should have been closed down or privatized long ago but of course the do-nothing rule has prevented that. Remarkably, the ANC continues to talk happily of “building the developmental state” although it is plain as a pikestaff that far from developing anything, state ownership in South Africa has caused a massive destruction of value. You have to be completely in denial now to talk of “a developmental state”.
The ANC is indeed in denial but this will not prevent the ongoing collapse of most of these SOEs and their associated ANC patronage networks. Indeed, some SOEs have realised that their only hope of survival is to escape ANC control.
Hence the battles at the SABC. Under Hlaudi Motsoeneng the SABC was under absolute ANC control – and it nearly killed the organization. The SABC board then desperately tried to prune staff to stabilise the corporation but the ANC minister did her best to stop that. Gradually, the SABC has rebuilt its audience by becoming more politically independent but this is now causing a major fight with Luthuli House.
The key question of ANC funding
Finally, one should keep a watchful eye on the subject of ANC funding. As we know, this is under considerable pressure, with salaries, medical aids and even pension allocations going unpaid at present. Partly this is because of the rotten state of the economy and the corresponding unwillingness or inability of many habitual donors to give. In addition, of course, ANC provincial and municipal councillors and MPs all pay part of their salaries to the party and as their numbers dwindle, so does the party’s income.
Currently ANC finances are in crisis. The organisation is overstaffed and the attempt to audit it for “ghost” employees had to be abandoned for fear of what that might reveal. In addition, dismissed cabinet ministers often get party jobs but continue to draw ministerial salaries, making them outrageously expensive. At present ANC staff have gone unpaid for October, November and December and the party is frantically hunting around for R200 million with which to pay those back salaries and pay off its debts by year end.
There is no indication of where such a large sum is likely to come from – the party is looking for not one but multiple very generous Father Christmases - and, of course, with such large recurrent costs the party’s financial crisis will start all over again in January even if the R200 million is found.
But there is a larger and perennial problem caused by the fact that not many ANC members can afford to make donations or even pay their ordinary party dues. Yet the ANC organisation gulps huge amounts of money, particularly at election time.
At first the large resulting financial gap was filled by Mandela’s energetic fund-raising with both foreign and domestic donors. A lot of that money came in as a sort of celebration of the New South Africa and dried up naturally after he left office.
The ANC thus faced a problem with how to finance the 1999 election, a problem meant to be solved largely by diverting large amounts of money from the arms deal into party coffers – by corruption, in other words. Quite how the 2004 election was funded is less clear but it is probably safe to assume that, in addition to business donations, illicit money came from the state plus other more or less corrupt funding.
Thereafter Zuma could depend on Gupta money plus illicit state money. Plus any number of “contributions” from shady businessmen of every kind. When it is known that the head of government – a Mobutu, let’s say – is open to bribes and corrupt deals, it attracts every possible sort of crook and chancer, as wasps to jam.
But Ramaphosa came to power vowing to crack down on corruption. As may be seen, this creates a major problem. Ever since liberation, with the possible exception of 1994, the ANC has depended quite substantially on corruption to fund itself. Given this, it is hardly surprising that it has become a largely criminal organization. If Ramaphosa resorts to those means he risks being found out, which would be politically very damaging. But if he doesn’t, the ANC will face a huge, indeed life-threatening financial crisis.
The crunch will be the 2024 election. The ANC is a big, slow-moving machine, normally pre-occupied with its own factional warfare and with the enormous number of scams and rackets in which its members and officeholders are involved. Only once every five years is it capable of mustering the enormous effort required to fight national elections (it fails to make such an effort for local elections, which is why the DA does so much better then).
And national elections require a lot of money. All manner of people have to be paid off. Buses have to be hired to bus large numbers of activists to rallies in stadiums which also need to be hired. Vast numbers of T-shirts have to be printed and distributed, plus posters, leaflets and so on. Food and drink have to be distributed on a vast scale to those who attend rallies. Pollsters have to be hired and paid, commercials made for radio and TV. And so on and so on. In addition, of course, funds intended for such purposes often go missing and end up in private pockets.
Even before we get to 2024 there will be many calls for funding. Magashule goes on trial in February 2022 and his faction will doubtless use that occasion to stage anti-Ramaphosa activities of every kind and Ramaphosa’s faction will need to find funds to counter that. There will need to be a lot of further resources distributed to ensure that the ANC Youth Conference and the various ANC provincial conferences don’t all become RET bastions.
And finally, the organization of the ANC National General Council will require substantial funds and large numbers of people will need to be paid off to prevent the RET faction from capturing it. In effect factional warfare means that every significant party meeting becomes a large auction.
This is now deeply ingrained and party office holders and activists attending such meetings expect to go away richer than when they arrived. This culture of bribery long ago trickled down to all the party’s branches, so office holders there need to be paid off in the run-up to such meetings to ensure they send the “right” delegates to them.
But all that is just travelling expenses compared to the huge resources needed for 2024 when the ANC will be fighting all-out to retain its majority status. It is assumed that such an effort requires a united – or apparently united – ANC, which in turn means that a lot of people need to be paid off in advance.
So there is a huge question mark over how Ramaphosa is going to fund the ANC – and his faction within it – over the next three years. Of course he will not succeed in unifying the ANC.– That is just a chimaera, a dream he chases because he doesn’t want to be the President on whose watch the ANC fell apart. So at least Ramaphosa needs a facade of party unity to be preserved up to and through the 2024 election – and that too will require money.
But you can’t really have unity with a bunch of crooks, placemen and tenderpreneurs who can see their networks shrinking around them and who are in a desperate mood, trying to preserve whatever scams and deals that they can. They blame Ramaphosa for the fact that their financial opportunities are shrinking, that many of their clients and allies have lost their jobs in municipalities or SOEs and that many more are under pressure.
The importance of being Ace
In this sense Ace Magashule is a symbol. Everyone knows that he and his henchmen have plundered the Free State for over twenty years, amassing power and wealth thereby. Magashule then managed to use his position as a provincial powerbroker to become an ANC national power broker as the party’s Secretary-General. He has used that position quite straightforwardly to defend the RET faction.
David Mabuza, having plundered Mpumalanga for years, made much the same transition to national power-broker status by becoming Deputy-President. But Mabuza is trying to look respectable and does not publicly associate himself with the RET faction. He is like a mafia boss who is trying, or at least trying to look as if he’s trying, to go straight.
The difference between Mabuza and Magashule is clear. When it looked as if the ANC might, horror of horrors, lose Durban (eThekwini) in the local elections the RET faction stalled coalition negotiations by cutting power off to the building where the negotiations were going on.
This gave time for Magashule and Zweli Mkhize, the former provincial premier of KZN, to fly in and patch up an ANC-led coalition by (literally) buying up the support of the minor parties, all eager to join in the looting.
The result was to preserve Durban, with its R50 billion+ budget, as the great patronage hub of the Zuma faction. When dirty deals need to be done to preserve serious business, Magashule is your man. Mabuza doesn’t go near such sordid occasions.
Ramaphosa promised to stamp out corruption but then came up against the fact that that would mean prosecuting scores of people in both factions of the ANC, which would completely de-stabilize the party and threaten his own position., So prosecutions aren’t taking place.
But Magashule was not only corrupt but quite openly working against Ramaphosa – an intolerable situation. From Ramaphosa’s perspective the key thing was to get Magashule out of the Secretary-General’s position. That, at least has been achieved by his suspension under the step-aside rule – though Magashule’s intervention in Durban suggests that he has not completely let go of the reins.
Ramaphosa has no appetite to put anyone in jail – not even those behind the July riots – but he would clearly like to prevent Magashule from resuming control in Luthuli House. This is really what is at stake in Magashule’s trial. How can Ramaphosa raise funds for 2024 if that means handing all those funds over to be spent by Magashule?
2024: the slide into ruin
In a sense the theme of the 2024 elections is already set. Not only has Ramaphosa done nothing to hinder corruption but nor has he managed to stop South Africa’s downward slide. Unemployment, poverty and inequality have all got worse. The national airline has failed and the railways have virtually ceased to run, thus reversing the gains not only of the 20th century but even of the 19th.
All the major cities save Cape Town are in a state of decay. The country’s main commercial artery, the N3 highway connecting Durban and Johannesburg, has been repeatedly cut and truck hijackings are common. Power cuts continue and there is more and more trouble over the delivery of water. Quite possibly by 2024 the Post Office will also have collapsed. The whole country is visibly sliding backwards and is increasingly lawless.
All sections of the community are horrified by this process. No one at all wants it. The IMF is clearly deeply alarmed by the state of the economy and is more and more strenuously pressing the government to take radical and immediate action. Business South Africa agrees: “Our country is in a serious crisis and we don’t see any urgency in some economic decisions that need to be taken”.
But the IMF wants to see sweeping privatizations, a reduction in the role of the state, personnel cuts in Eskom and other SOEs, greater labour market flexibility and sharply improved education. All of these things will be furiously opposed by powerful interests within the ANC so probably none of them will happen. Ramaphosa will promise reform but not actually carry out any reforms. So the log-jam will continue.
2024 will mark thirty years of ANC rule and it will be entirely clear to everyone that the cumulative effect of ANC rule has been a vertiginous national decline. The big question which the electorate faces is: do you really want more of this ? It is a question that has nothing to do with race though the ANC will no doubt try frantically to accuse the Opposition of racism for posing it at all, claiming that they are depicting black rule as a return to barbarism.
At the local elections all that Ramaphosa could say was that the ANC had made “mistakes” but please would the electorate give them another chance: they would try to do better. Unsurprisingly, this cut no ice. Doubtless, Ramaphosa will make more such excuses in 2024, but if the voters were fed up with such empty promises in 2021 it is unlikely that another three years of rising unemployment and falling real incomes will improve their mood.
2024 will thus be a climacteric year when all the threads of the previous thirty years get drawn together and in which the electorate will have to pronounce its verdict on a whole generation of ANC mis-rule. As if sensing this Ramaphosa used De Klerk’s funeral for yet another denunciation of apartheid, for the only card left to the ANC is to insist that however bad things are now, apartheid was worse.
One senses that that is no longer working. People may remember that De Klerk made his great turning in 1990 for the sake of his country. He must have known even then that this was likely to cost him his career and destroy his party. There is no ANC leader willing to make such sacrifices just for the sake of the country.
There is a sort of rough poetic justice that the blunders and excesses of the ruling party have condemned it to approach the showdown of 2024 while observing tight fiscal discipline. One cannot help thinking, however, that as the showdown approaches that discipline will crack and the government will make one more desperate attempt to buy people’s votes with their own money.
The real question is whether we will get to 2024 without further major irruptions – more disturbances, the ejection of Ramaphosa, xenophobic riots or whatever. Ordinary civic life is now in a very delicate condition and social discontent is rife. We live in interesting times.
R.W. Johnson
