GIS Dossier: South Africa counts the cost of a failed presidency

The former president of the Republic of South Africa and head of the African National Congress in court in Durban
April 6, 2018: Jacob Zuma, former president of South Africa, sits at the KwaZulu-Natal High Court in Durban. He faces 16 charges of corruption, money laundering, fraud and racketeering for his alleged involvement in an arms deal (source: dpa)

GIS Dossiers aim to give our subscribers a quick overview of key topics, regions or conflicts based on a selection of our experts’ reports since 2011. This survey is devoted to South Africa’s mixed experience, as the former apartheid-ruled economic powerhouse has struggled to fulfill the promises brought forth by its peaceful transition to a multiracial democracy.

The Republic of South Africa is the African continent’s most developed country. Its first multiracial and multiparty elections in April 1994 marked one of the most celebrated post-Cold War political transitions – from white minority rule (apartheid) to a fully-fledged, modern constitutional regime under the majority of the African National Congress (ANC). Its leader Nelson Mandela, South Africa’s most celebrated and longest-held political prisoner, made history by becoming its first black head of state (1994-1999).

For almost two and a half decades, the ANC party has dominated South Africa’s politics. Many South Africans, however, remain desperate for the economic gains and empowerment that were promised them by leaders of the anti-apartheid struggle.

During the era of Jacob Zuma, South Africa’s fourth president (from 2009 until his resignation on February 14, 2018), the country descended into a deep economic crisis, with significant social and political consequences. The immense task of putting the state back on track now rests on the shoulders of Cyril Ramaphosa, a respected trade union leader and businessman, until recently Mr. Zuma’s vice president, chosen by the parliament’s National Assembly to replace the controversial veteran of the anti-apartheid fight.

Pragmatic start

Early on in Mr. Zuma’s tenure, GIS Expert Dr. Jaime Nogueira Pinto reported that South Africa was expected to continue as “a major force on the world stage,” politically and economically. By April 2012, though, Dr. Pinto was concerned with radical elements gaining ground within the ANC. In a report, he described the suspension from the ruling party of Julius Malema – the firebrand leader of the ANC Youth League whose calls for nationalizing the country’s mines and banks, as well as his extreme positions on race, scared foreign investors and white farmers in South Africa. The author presented the 31-year-old as standing in sharp contrast to President Zuma’s maturity and “pragmatic and moderate policies.”

Complex figure

Jacob Gedleyihlekisa Zuma (76), a former anti-apartheid activist and member of the ANC since 1959, cuts a highly complex figure. Often described as “a traditional Zulu chief,” he has six years of formal education, likes to sing and dance in public meetings and vehemently opposes same-sex marriage. He has four wives and 20 children and is a social conservative with enormous personal charm. It is said that those who get to know him find him highly likable. He was cleared of rape charges in 2006 but still faces numerous charges of misusing public funds.

The “Black Thursday” events of August 16, 2012, when police shot into a threatening crowd at the Marikana mine in Rustenburg, killing 34 miners and injuring 78, “could have long-term political ramifications” for President Jacob Zuma, predicted Dr. Pinto in his September 2012 report for GIS.

The drama was used by the opposition, on the left and the right, to attack the ANC and the president. The GIS expert summed up the critics’ charges:

The claims are that South Africa remains an unequal society nearly 20 years since the end of apartheid and the beginning of ANC rule. Opponents say the country has a new black bourgeoisie – associated with the ANC leadership – sharing the best part of the cake with some of the whites. The rest of the population – the masses of rural and suburban blacks and a new downgraded class of poor Afrikaner-whites – live in extreme poverty.

Two factions of miners

  • The Association of Mineworkers and Construction Union (AMCU) was behind the strikers, pushing for radical action in the hope of achieving significantly higher salaries – from $484-605 a month to $1,512 a month
  • The National Union of Mineworkers (NUM), affiliated with the Congress of South African Trade Unions (COSATU) and close to the ANC, was attacked by AMCU supporters for preaching moderation
  • Ten people died in earlier clashes between the two factions

Challenge repelled

The ANC’s 49th National Congress in December 2012 was the scene of the first concerted attempt to remove President Zuma from the post of party leader and thus block his candidacy for president in the 2014 elections. Assailed by “Anything But Zuma” factions as a weak leader who had lost control of the ANC, mishandled the aftermath of the police shootings and been tainted by allegations of corruption, Mr. Zuma faced difficulties in maintaining his position.

In the end, he narrowly prevailed during the intense five-day maneuvering due to firm backing from the ANC Women’s League, the Congress of South African Trade Unions and the military veterans’ association, the former armed wing of the ANC.

By February 2013, Dr. Pinto wrote in a follow-up GIS report:

Jacob Zuma … has become an increasingly controversial figure in the eyes of his African National Congress party and even more so among general South African public opinion. He has extraordinary support from the party’s rank and file, and the party’s machinery is well-oiled, organized and secure, allowing him to ensure his leadership. But he no longer has the desired unanimous backing expected from a president of a country as important as South Africa.

The leader, observed the expert, beat his opponent Kgalema Motlanthe “by the narrowest margin and with the lowest number of votes among the winning candidates for the top six positions in the party’s leadership.” Mr. Zuma even took fewer votes than his new vice president, business-friendly deputy, Cyril Ramaphosa.

By that point of his career, the president was linked to numerous political and economic scandals

Of the latter, the expert wrote: “Many believe Mr. Ramaphosa’s bargaining spirit, involvement and understanding of economics and the business world, combined with his union background, could be an asset and counterbalance to Mr. Zuma’s position.”

By that point of his career, the president was linked to numerous political and economic scandals, including the use of $33 million of taxpayers’ money to carry out improvements on his private rural residential complex. Women’s rights activists were lining up against him because of his four wives and numerous extramarital affairs, reported Dr. Pinto.

Sources of strength

On the eve of South Africa’s fifth general election in May 2014, Dr. Pinto probed the secrets of the country’s historical transition in search of strengths that could help it in adversity two decades later.

“South Africa’s first president, Nelson Mandela, who fought for peace and racial reconciliation, used his charismatic personality to outshine other historical, cultural and political players in what was a gradual and complex change from white minority rule,” he noted. Also, there was no rush to conclude the process:

The South African government’s decision to legalize the ANC as representative of the country’s black majority and engage in formal negotiations followed a long period of reflection, discreet talk and discussion of crucial issues such as the future constitution, the rule of law, minority rights and land, property and the economy. There was time for the leaders to get to know each other and to develop mutual trust.

Another key to success was inclusiveness of the proceedings – on both sides. All political groups, state apparatus and business constituencies, including hardliners from both sides, were invited to play a part in negotiations. And, there was a solid foundation on which the state rested. The expert wrote:

South Africa’s apartheid government was a constitutional state, even if only for the white minority, with decisions taken, submitted and approved by the community, through its political and social representatives. Christian churches in the various South African communities also played a significant part, as did the free market economy, while the British-based judicial system was independent of the executive and often took decisions against the government.

The constitution was still being respected, Mr. Pinto emphasized. “The ANC has not used its legislative majority of 264 of the 400 seats in parliament to break the balance and division of powers. The rule of law continues and a large majority of South Africans, questioned in opinion polls, are adamant in their support and praise for the sanctity of the rule of law.”

The country’s institutions functioned, Mr. Pinto wrote, and despite claims that the ANC had failed to fulfill economic and social expectations, the economy worked, the physical infrastructure was being maintained and improved, and the public finances were healthy - even if, he admitted, profits were declining in some areas.

When leaders fail

He concluded, correctly, that the ANC would win the May 7 election despite the government’s shortcomings, the increase in violence and persistent claims of corruption.

The ANC triumphed in the May 2014 election with 62.1 percent of the vote, down from 65.9 percent in 2009. However, the ruling party lost its two-thirds majority in parliament, while the opposition made inroads in traditional ANC strongholds in rural areas and Gauteng, the country’s richest, most populous province and the birthplace of the South African liberation movement.

A boy stands in the doorway of a shack made of corrugated metal plates in the township of Soweto
Twenty-four years since South Africa’s historic transition to multiracial democracy, the country remains an unequal society and economic betterment is elusive for much of the population (source: dpa)

South Africa has fallen to 121st place out of 187 countries in the United Nations Human Development Index (HDI) under the ANC’s leadership, observed GIS founder Prince Michael of Liechtenstein in his postelection comment. The HDI is a measure for assessing long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living.

Structural problems, which were also a consequence of poor governance, had hampered economic growth

In South Africa, however, slum areas were increasing, the unemployment rate stood at 24 percent and had not dipped below 20 percent for 17 years. Prince Michael wrote:

Africa needs visionary leaders … who want to make the economy grow, and create well-being, small entrepreneurship, education and a certain sense of self-responsibility rather than huge projects in the capital city or a president’s birthplace. These principles help to avoid corruption.

Opposition firms up

The ANC remained South Africa’s leading political force, yet the country’s political landscape had been undergoing slow but steady change, reported Dr. Pinto in September 2015. “As the 2016 local elections draw near, and with national elections due in 2019, the two main opposition parties are positioning themselves as credible alternatives,” the expert wrote. He described the progress made by these opponents – Hellen Zille’s Democratic Alliance (DA) and Julius Malema’s Economic Freedom Fighters (EFF).

Grim economic picture

South Africa’s deeply divided, multiracial society was mired in crisis, wrote an anonymous GIS expert in May 2016. The picture painted was bleak: the grand “black economic empowerment” project had largely failed. A quarter of a century after apartheid’s end, South Africa remained “one of the most unequal societies on earth.” Structural problems, which were also a consequence of poor governance, had hampered economic growth.

The report highlighted that poverty reduction in South Africa had been driven mainly by social grants. The number of beneficiaries exploded from 2.9 million in 1997 to 16.9 million in 2015. Social insurance programs accounted for more than 4 percent of the country’s GDP, twice the median for developing economies, according to the World Bank.

A bar chart showing an increase in the number of recipients of social grants in South Africa
Social grants have alleviated poverty and improved healthcare and education, but South Africa remains a profoundly unequal society (source: macpixxel for GIS)

The country’s rate of economic growth was insufficient to sustain such generous policies, the author pointed out. The economic crisis, however, stemmed mainly from self-inflicted wounds. Labor laws, in particular, posed a formidable obstacle to growth. Employment was another quandary.

A chart showing South Africa’s unemployment rates from 1994 to 2016
The unemployed and inactive for various reasons comprise 57 percent of South Africa’s working age population (source: macpixxel for GIS)

According to the GIS author, such problems elicited only anger from President Zuma. In December 2015, he fired Finance Minister Nhlanhla Nene for daring to argue for spending curbs. In his “black empowerment” speeches, the president stubbornly blamed “latent racial structures” in the economic system for the country’s predicament. One of his remedies was a controversial bill on traditional courts, which reflected Mr. Zuma’s view that the “African way” – as opposed to the “legal way” – was the best cure for South Africa’s ills.

Tight spot

Friday, April 7, 2017, was a black day for South Africa, as international rating agencies reacted to a poorly justified reshuffle in President Zuma’s cabinet by downgrading the country’s securities across the board, to sub-investment grade. That triggered a weakening of the rand against the U.S. dollar and unleashed the country’s fiercest political crisis in many years. It put Mr. Zuma in a tight spot, wrote an anonymous GIS expert. In Johannesburg, Pretoria, Durban, Cape Town and other prominent South African cities, tens of thousands of protesters took to the streets demanding Mr. Zuma’s resignation.

Under the South African constitution, the expert pointed out, getting rid of a sitting president without a new election required a no-confidence vote or impeachment. Mr. Zuma had survived six motions of no confidence in 2016 alone, as the ANC had always swung behind him en masse. The ruling party commanded a parliamentary majority with 249 seats, while the opposition’s 151 seats were split among 12 different parties.

The president’s quick exit was not in the cards in the spring of 2017. The GIS expert saw a reason for guarded optimism, however. He explained:

The traditional capacity of the South African elites – white and black alike – to bargain and negotiate in times of national crisis will soon be put to another test. It is fair to guess that they will end up saving the day, as they have done in the past.

And indeed, they soon began taking steps in that direction.

A picture of the president and deputy president of South Africa during the ruling party’s congress late in 2017
Johannesburg, Dec. 18, 2017: South African President Jacob Zuma (L) and Deputy President Cyril Ramaphosa at the ANC Congress that elevated Mr. Ramaphosa to party leader (source: dpa)

A December 2017 GIS Dossier offered the view that President Zuma would not make it to the end of his second term in 2019. “The former head of intelligence for the underground African National Congress (ANC) had been plagued by corruption scandals stretching back two decades and remains under investigation by the National Prosecuting Authority on 783 counts of corruption, money laundering, and racketeering. In August 2017, he narrowly survived his eighth no-confidence vote in parliament by only 21 votes, as roughly two dozen ANC deputies joined ranks with the opposition to vote against him.”

Forced resignation

The era of Jacob Zuma, South Africa’s fourth president, ended with his resignation on February 14, 2018. Cyril Ramaphosa, a decade younger, was chosen by the parliament’s National Assembly to replace him.

The new leader faces stiff political challenges, including redefining the ruling alliance

Earlier, Mr. Ramaphosa’s victory over the former president’s ex-wife in the contest for the ANC’s top position signaled an approaching end of the Zuma years in South Africa, wrote GIS expert Teresa Nogueira Pinto. At the party conference in December 2017, Nkosazana Dlamini-Zuma represented its left wing and stood for a “radical economic transformation” but also “continuity” in the country. Cyril Ramaphosa, in contrast, personified the most moderate and liberal factions.

As the ANC’s new president, Mr. Ramaphosa initiated a delicate process of removing Mr. Zuma from office, Ms. Pinto explained. The party’s “Top Six,” a group of high-ranking members with significant decision-making power (it includes both Mrs. Zuma and Mr. Ramaphosa), were split over Mr. Zuma’s destiny. In the end, fears prevailed that with the controversial president remaining, the ANC would risk a historic defeat in the 2019 general elections.

President Ramaphosa, the man Nelson Mandela had seen as the best candidate to succeed him, has a CV which lists such roles as activist lawyer, a key negotiator of South Africa’s democratic transition, and founder of the biggest and most powerful trade union in the country, the National Union of Mineworkers. As he moved from politics to the economy, Mr. Ramaphosa became a poster child of South Africa’s black economic empowerment program. On the strength of his political accomplishments and negotiating skills, he joined the ranks of South Africa’s most successful – and wealthiest – businesspeople.

His 2018 ascent to the country’s presidency sparked a national wave of optimism. However, the new leader faces stiff political challenges, including uniting the fragmented ANC, redefining the ruling alliance, dealing with opposition parties and addressing the potentially explosive economic issues, including land expropriation.

The former president still has many supporters within the ANC, particularly among those who benefited from his policies. In the short term, his successor has to make sure that the party stands behind him – which usually means avoiding significant changes.

Post scriptum

Upon reading the Dossier, Dr. Jamie Pinto added the following to bring the narrative up to date.

Moreover, Mr. Ramaphosa has to compensate his backers within the party, especially those who supported his narrow victory against Mrs. Zuma.

The new president will also have to deal with opposition parties and address some potentially explosive economic issues, including the new “land reform” laws which would allow the expropriation of white farmers’ land without compensation.

The South African parliament approved the proposal to amend Section 25 of the Constitution to make this possible, by 241 votes to 83. Referring to the issue, the leader of the radical Economic Freedom Fighters (EFF) Julius Malema, said, “We must ensure that we restore the dignity of our people without compensating the criminals who stole our land.”

The opposition Democratic Alliance (DA) voted against the amendment, describing it as a demagogic measure. The DA compares this proposal to Mr. Mugabe’s land policy in Zimbabwe, which was a total failure: the farms that have been transferred from white to black farmers are now ruined.

The number of incidents of attacks and killings of white farmers in North Transvaal in the last 20 years – a mix of politically instigated violence and crime (including hate crimes) – is strikingly high. Experts warn that some of the farmers will not accept the seizures and could resist, not only in the courts, but by force as well.

Finally, at a moment when Mr. Ramaphosa is calling for investment and foreign aid of $100 billion, it seems contradictory for investors to put their money in a country that threatens its citizens this way.

Following President Zuma’s resignation, the outlook for South Africa’s 2019 general elections has changed. But the most likely scenario is still that of a comfortable ANC victory.

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