Convenience Big Store: The case for South Africa

25 July, 2021

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The case for South Africa

Cape Town, with Table Mountain in the background. Getty Images

It's one of the world's most beautiful countries, and rich in human and natural resources. But it's fast becoming a failed state. Can it be saved?

Why are people rioting now?
What lit the touchpaper was the jailing of former president Jacob Zuma for refusing to co-operate with an inquiry into the plundering of state coffers during his nine-year reign. But ordinary South Africans quickly joined in. The country is suffering the worst violence it has seen since the end of apartheid in 1994, with more than 200 people killed, thousands injured and supermarkets, warehouses and factories burnt down amid riots and looting.

Why so much anger?
South Africa is the continent's most industrialised economy, but it also has the highest unemployment rate in the world. Gaping inequality means a tiny minority enjoy a developed-world standard of living while most people struggle to survive. Many of the 11 million unemployed are living in shacks, hungry, with no hope of a job. Parts of the country regularly go without power and water; police display a deadly mix of incompetence and cruelty. Why shouldn't we raid supermarkets, ask looters, when the government steals from our airlines and state energy firms? One said on TV that he stole each day because otherwise his 15-year-old sister would "have to sleep with a grandad".

Who's responsible?
The leaders of the African National Congress (ANC), Nelson Mandela's old party. They've been in charge since 1994 – the first election in which black South Africans were free to vote. In that time tens of billions of dollars have vanished from public funds, allegedly siphoned off by the leaders of the very organisation that promised to build a new, equal, just society for all.

Wasn't the ANC a force for good?
At one time, yes. In the 2000s South Africa was celebrated worldwide as a symbol of hope, the "rainbow nation" that had overcome violent racial oppression and, under Mandela, established one of the most enlightened constitutions in the world, with steady economic growth. Nine years of Zuma destroyed all that. According to his many critics, he presided over an all-out assault on South Africa's public institutions, utilities and state finances – corruption contaminated almost every corner of public life, and unemployment and crime rose after years of decline.

How did it happen?
Largely thanks to legislation dreamt up to help black South Africans in their new multiracial society: the Black Economic Empowerment (BEE) policy. If you set up a company, the law decreed, at least a quarter of it must be black-owned – the aim was to break the hold of the old white elite on the economy. In practice, however, it became a tax on entrepreneurs, forcing them to hand over 25% of their equity to businessmen with no particular skills apart from the ability to get ministers to take their calls. Surveys show BEE legislation is the main barrier to foreign investors bringing money into the country. No wonder. It's crony capitalism, pure and simple. And Zuma and his officials took full advantage, feathering their own nests without passing on to the poor any of the benefits of a policy specifically designed to help them.

How did they get away with it?
They traded on historic ties to the near-saintly figure of Mandela. Poverty and inequality could be dismissed as part of the "apartheid inheritance". In fact, says a veteran historian of South Africa, RW Johnson, that is "the opposite of the truth": the governing elite is now far richer than it was under apartheid and the poor have multiplied. The ANC's election slogan has long been "a better life for all", but it has "emphatically not brought a better life for poor Africans", says Johnson in The Times. These days you hear "unfavourable comparisons with the old apartheid government" from all sides.

So Zuma deserves to be in jail?
Of course, and many educated young South Africans see his imprisonment for contempt of court as a promising sign that the rule of law actually works. But the former president still commands strong grassroots support. Though he was never a model of probity, his credentials as a young frontline anti-apartheid fighter under Mandela still carry weight. Nobody seriously doubts he stole billions of rand, says Johnson, and he is facing many more charges of racketeering, money-laundering and corruption. But deep connections in the state security apparatus and the underworld (via his relatives in the taxi industry) mean his reach remains considerable.

Is the new president any better?
Cyril Ramaphosa is a big improvement on his predecessor and has promised to clean up the top tiers of power. His image is far from ideal, though. He started as a trade unionist, but made a fortune doing BEE deals with firms such as mining giant Glencore and McDonald's. This made him the country's second richest black man, worth $500m. (His brother-in-law Patrice Motsepe is the richest.). His police minister, Bheki Cele, went on TV last week to call for calm wearing a cashmere coat and a Louis Vuitton scarf costing about eight times the average weekly wage. Not a good look. Meanwhile, the ANC remains "deeply corrupt", according to Johnson – full of "Zuma's left-wing kleptocrats", who fiercely oppose Ramaphosa's moderates and remain determined to help only the "haves" (BEE capitalists, union bosses, public-sector workers) rather than the unemployed.

Can the country be saved?
Apartheid ended because decades of black struggle persuaded a majority of whites to vote to abolish white rule in 1992. Recent weeks have seen appalling violence, but also, as The Observer points out, communities coming together to clear debris, protect vital services and help those left without bread. Those who hoped to derail the government's reforms are unlikely to succeed for long, and "their failure will strengthen South Africa's democracy".

Couldn't foreign investors help?
Hugely, and ditching BEE-style crony capitalism would immediately make South Africa an attractive proposition. Take mining. Because the government demands ever-higher quotas from owners, no new mines have opened in a decade. This in the midst of a commodity boom, and with South Africa sitting on the richest mineral deposits in the world. Adopting mining legislation similar to that in, say, Canada could produce "tens, perhaps hundreds, of thousands of new jobs", says RW Johnson. But he is pessimistic, fearing that the government will continue to place "the interests of a few BEE capitalists higher than those of the unemployed".

Property

THE HIDEAWAY This palatial six-bedroom villa is near the coveted Golden Mile, which links Marbella and Puerto Banus, on the Costa del Sol. It has a grand driveway, balconies with sea views, a pool, a tennis court and colonnades overhung with vines. £6.77m.

Quirk of history

Queen Victoria is "the most notorious drug kingpin of all time", says Sam Kelly in History Is Now magazine. She is thought to have drunk a glass of opium-laced laudanum every night and was a huge fan of cocaine chewing gum. She even offered free samples of opium to Chinese citizens in a craven attempt to get as many people addicted as possible, which worked a treat: opium ultimately accounted for as much as 20% of the British empire's annual revenue.