Can South Africa afford the ANC? The African National Congress's decline as the country's dominant political force seems terminal, but what is the economic cost of a protracted and highly politicised disintegration?

Author:Thomas, David
Position:SOUTH AFRICA

As the clock ticked down on preparations for South Africa's local elections in August, the mood noticeably darkened in Johannesburg's Luthuli House, the towering headquarters of the African National Congress (ANC).

Facing the greatest electoral challenge since the advent of democracy in 1994, ANC organisers, their ears close to the ground in the deprived townships that comprise the movement's heartlands, began to worry that the party of liberation was finally losing its vice-like grip on the electorate.

With poll after poll showing expected gains for opposition parties, even the most committed ANC cadres steeled themselves for a tough rear-guard action and a battle to shore up the party's shrinking base. Few expected the spontaneous outpouring of township adulation that followed past victories.

Yet for President Jacob Zuma, the ill omen of dozens of opinion polls failed to puncture his election day optimism. After marching to a local polling station near his sprawling Nkandla estate in Kwa Zulu Natal, a beaming Zuma turned to the assembled well-wishers and made an astounding prediction.

"I will wake up in the municipality of the ANC," he claimed.

Never mind that Nkandla, site of Zuma's infamous taxpayer-funded home upgrade, had become a by word for political corruption and the widening gulf between South Africa's rulers and the majority of the population. Never mind that the country's highest court had ordered Zuma to repay R7.8im ($571,000) of the costs after a protracted and very public legal battle. The ANC, Zuma insisted, was on track for victory in Nkandla and beyond.

As it was, the electorate sent a message to Zuma that the ANC will struggle to forget. Nkandla where the party was routed by the unfashionable Inkatha Freedom Party--played its part in a dire ANC performance. From tiny rural seats to sprawling urban centres, voters delivered a stunning rebuke to the party. For the first time in over 20 years, the party claimed less than 60% of the popular vote. Cities long seen as strongholds--including Johannesburg, Port Elizabeth and Pretoria--slipped from the ANC's grasp for the first time as the conservative Democratic Alliance and radical Economic Freedom Fighters counted their gains.

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For many, Zuma's wilful blindness in the face of his declining personal popularity mirrored his complacency in the face of the country's dire economic situation. South Africa repeatedly flirted with recession prior to the vote, shedding 350,000 jobs as official unemployment ticked up to a decade high of 26.7%. The electorate was given an opportunity to cast a damning judgement on the ANC's economic stewardship, and they eagerly took it.

Yet despite the message of the election, the ANC's subsequent attempts to kickstart the economy have been piecemeal. According to Capital Economics, an encouraging second quarter gave way to business as usual in the third. Manufacturing output rose by just 0.4% year on year, retail growth undershot expectations by a half, and mining output fell by 5.4%. The immediate return of political infighting to the highest levels of government has repelled investors and stalled a nascent recovery. Fundamental questions over the country's economic...

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