No let up for Ramaphosa in his efforts to revive South Africa

Saturday August 11 2018

South Africa's President Cyril Ramaphosa addresses a meeting of the ruling African National Congress party on its land expropriation policy in Johannesburg on May 19, 2018. PHOTO | AFP


The mountain which South Africa President Cyril Ramaphosa must climb to get this country “back on track” seems to continuously be growing under him.

President Ramaphosa has suffered several set-backs in recent days as the country simmers under heightening political tensions and various civil disturbances in key sectors of the economy and regions.

The president’s main problem is uniting his divided ruling African National Congress (ANC) party while rooting out rampant corruption and getting the country’s moribund economy functional.

But the hits keep on coming for President Ramaphosa who, on the economy and on his promised post-corruption renewal programme, seems to be catching no lucky breaks.

Among serious blows to come in recent days was the announcement that platinum miners Amplats, once world leaders, were cutting back a further 13,000 jobs.

South Africa had once been the world’s biggest gold and platinum producer, but now ranks seventh for gold and lower than that for platinum production.


The reason is a lack of foreign and local investment into the mining sector, especially over the past 10 years during the baleful presidency of Jacob Zuma during which massive corruption became the norm, and a consequent loss of capacity and competitive advantage.

South Africa’s pro-labour laws are not helping by essentially entrenching ever-deeper the diminishing employment capacity of the once booming mining sector.

It is not that South Africa is suddenly running out of either gold or platinum, though the former is now found below 3km —the deepest in the world.

There is also still plenty of platinum and related palladium and platinum-group metals in the ground, but they are just too expensive to mine with current recovery rates and cost structures.

The gold sector’s employment figure in the mid-1990s was over 390,000 but has dropped to barely 119,000 and is still in free-fall.

Similarly hit is the industrial sector where the latest index shows that the positive “Ramaphoria bump” is well and truly over and where production is set to shrink, putting South Africa right on the brink of falling back into economic recession.

With the Reserve Bank having reforecast economic growth down a notch to 1.2 per cent recently, there is little hope for a general economic recovery without substantial buy-in from direct foreign investors.

The recent BRICS (Brazil, Russia, India, China, South Africa) summit in Johannesburg generated promises of $34 billion from China, mainly, but this is still less than a third of what President Ramaphosa, himself a former mining magnate, believes will be necessary for a full-throttled restart to the economy.

Land reforms

With a national growth rate of something beyond 3.5 per cent — a required minimum merely to keep track with new job-seekers, let alone take up the slack of an official 27 per cent unemployment load, President Ramaphosa has little hope of achieving anything without positive investor sentiment.

But the latter is hard to come by these days, with two major American newspapers laying into the country and its leaders in the past couple of days alone.

The main criticisms laid at the Ramaphosa administration’s doors are its desire to change the South African Constitution to allow land reforms to take place without the need for compensating those who may own land once historically owned by indigenous Africans (meaning black Africans), and the fact that senior members of his party as recently elected are themselves the very pictures of the corruption President Ramaphosa is supposed to be rooting out.

The land issue is in the process of blowing up in the president’s face, with ongoing land invasions taking place in some places on a daily basis across the country as desperate people at the bottom end of the economic ladder look for somewhere to live.

The land issue is vexed, complex, emotionally charged and has been largely hijacked by the populist rhetoric of Julius Malema and his Economic Freedom Fighters.

In trying to match the EFF and its own radical left element, the ruling party is finding itself torn in two directions — it cannot both settle the land issue, calmly and sensibly as President Ramaphosa would have it, and do anything meaningful in time for next year’s elections in which it will feel the lash of popular opinion if it has not delivered significant results on its promises of land redistribution.

Efforts to rush the job will not help and a helter-skelter approach will only reinforce opinions such as those expressed in the Wall Street Journal this past week which compared President Ramaphosa to Zimbabwe’s Robert Mugabe and South Africa’s land reform through uncompensated land redistribution to the recent history of Venezuela.

Damning editorial

The WSJ editorial harshly dealt with Ramaphosa’s and ANC’s views on land redistribution, saying South Africa needed another enlightened leader like Nelson Mandela, “but it keeps electing imitations of Robert Mugabe”.

“Mr Ramaphosa says he wants ‘land reform’ to ‘unlock economic growth, by bringing more land in South Africa to full use, and enable the productive participation of millions more South Africans in the economy,” the editorial notes.

“In his telling, South Africa’s ills are related to the proportion of whites and blacks tilling the soil, not the economic mismanagement of predecessor Jacob Zuma or the ruling African National Congress. Supporters of expropriation claim black South Africans own less than two per cent of rural land, and less than seven per cent of urban land, thanks to apartheid-era policies. But the government’s 2017 land audit used questionable data and underestimated land returned to blacks since the ANC won power in 1994. The Institute of Race Relations estimates black South Africans control 30 per cent to 50 per cent of the country’s land.”

“Mandela insisted that land reform is best achieved through a ‘willing buyer, willing seller’ principle, as it is in other democracies with a strong rule of law. When polled, the vast majority of blacks prefer cash instead of titles. Many black South Africans have streamed into cities to find jobs and better schools for their children.

“But the ANC’s Zuma-era economic follies left many of these migrants jobless, and sent crime rates rising,” added the editorial.

“Mr Ramaphosa is promising more government spending to regain public support, but snatching private property is about as destructive a policy as there is.”

The damning editorial came as the New York Times unleashed an even more scathing assessment of the extent of corruption linked to the ruling party’s new deputy leader — and next in line to be South Africa President – David “DD” Mabuza.

Meanwhile, with police firing teargas and rubber bullets to disperse not only land invaders, but striking and gun-fighting minibus taxi (matatu) drivers, service delivery protesters, train-burning commuters and numerous other protest groupings on an almost daily basis, the land reform public hearings process has shown that things may move rapidly from heated debate to open conflict as Afrikaners farmers warn that they will not stand idle while the government seizes what they see as their land.

Aggravating matters is the revelation that the President Ramaphosa government has already identified 139 farms as “guinea pig” test cases for land expropriation without compensation.

But even as it hones in on its first targets for a land grab, the South African government has been warned that its preferential status under the African Growth and Opportunity Act (Agoa) with the US may be in jeopardy if the country proceeds.

Trade union solidarity said that in terms of Agoa, eligible sub-Saharan African countries have to commit to protecting private property rights. Agoa, which came into effect in May 2000, provides trade preferences for quotas and duty-free entry to the US for certain goods.

Legal experts have also warned that expropriation of foreign-owned property without compensation constituted violations of international law and various treaties to which South Africa is party.

Either way, President Ramaphosa seems damned if he doesn’t and damned if he does — and all the while the clock ticks down for what will amount to referendum on his leadership in the 2019 national elections scheduled for just over nine months’ time.