As people naturally seek validation of strongly held beliefs, it is easy for the ANC to exploit polarisation.

The inability either to deter last July’s mass rioting and looting or to subsequently prosecute the instigators and their foot soldiers reflects ANC corruption and incompetence. But, given the dangers that such fraying of political stability foreshadows, how can it be that none of our leaders has a plan to plunge our perilously elevated youth unemployment?

Allowing these conditions to percolate suits the ANC by dulling the rivalries between its RET and Ramaphosa factions – until after the next election. The RET wing, and other radical groups, can presume they will then be able to render SA ungovernable through routinely inciting social unrest.

History is replete with examples of poor and idled young adults serving as human kindling until a spark, particularly rising food prices, provokes mass social upheaval leading to a new political dispensation. Our democratic principles and institutions risk being downgraded or dispatched by unruly mobs spurring widespread support for authoritarian rule. Our initially positive response to the pandemic-induced lockdown, and last July’s rioting would then be seen as omens ignored.

Odds that the 2024 election will provoke necessary policy shifts are low and drifting lower. The ANC, which seems likely to dominate a post-2024 coalition government, is sticking with its playbook. Its persistent electoral competitiveness traces to its having the government fund a broad array of illegal, and legal but unaffordable, patronage. Such funding relies on policies and practices which prioritise redistribution at growth’s expense.

As the ANC’s leadership is highly motivated to retain control of our national government, electoral pressures create incentives for the party to be seen as cracking down on corruption. But this isn’t a realistic option as corruption, and other forms of patronage, have metastasized throughout the party. Also, while sharply reducing stealing is an important objective, without policy pivots, growth will remain anaemic and high youth unemployment will continue to unravel the country’s social cohesion.

Ultra-elevated youth unemployment

Governing parties normally go to great lengths to avoid persistently ultra-elevated youth unemployment for two related reasons. First, after several years, the backlog of never-employed young adults inflicts more lasting economic damage than even a harsh war. Ukraine’s longer-term economic trajectory is substantially more favourable than South Africa’s. Second, risks of political upheaval compound.

The ANC can’t meaningfully reform itself, its commitment to democratic principles is meagre and its 2029 electoral prospects are grim. By setting the stage for violent protests becoming easy to incite, it positions itself to ‘suspend’ the constitution ‘to restore order’.

What is harder to explain is why our national discourse lacks a contestation of powerful solution paths. The ANC has succeeded in framing our youth unemployment crisis as a trade-off between fiscal rectitude and the moral obligation to provide subsistence payments. They have also successfully sold the false narrative that our growth impediments are mostly about insufficient investment flows. 

Reports regarding the US president’s recent trip to Asia followed by his conference with Latin American leaders make clear that countries in both regions want the same thing, improved access to US consumers. Some have been explicit that they won’t be wooed with offers of improved investment flows.

Investments to expand businesses selling to South African consumers can’t solve what ails our economy. Our per capita income peaked a decade ago and it is unlikely to improve noticeably this decade. The rest of the world has hundreds of times more discretionary purchasing power than South Africa does.

Nor is it possible to redress our unemployment crisis through commodity exporting. To break out from the mutually reinforcing poverty, debt and unemployment traps which ANC policies have triggered, we have to create jobs that add value to exports. Yet our national debates don’t even acknowledge this fundamental imperative. How is this explained?

The ANC’s chosen path is ruthless and profoundly destructive, yet it is rational. Their leaders seek to look after themselves for as long as they can. It isn’t rational for those opposed to ANC rule to accept their framing of key issues. We need to debate why this continues. An important background consideration is that few people are up to speed regarding today’s core economic development drivers. This makes it easier for the ANC to frame such issues within a values-based context.

Two sets of voters

Stripped to its basics, South Africa’s political economy consists of two sets of voters. One believes that overcoming corruption and incompetence is sufficient to achieve a healthy political economy. The other believes this goal requires redressing historical injustices through redistribution. Both constituencies want to see their version of justice validated. Neither is workable.

We live in a highly polarised country with politics dominated by competing versions of justice. We simultaneously live in an era where high growth is achieved through competing effectively, global integration and adapting to constant innovations.

It is as if both those who vote for the ANC and those who support the opposition want their justice beliefs validated before they will be ready to focus on solutions. Such overindulging of values should have been purged long ago in favour of embracing pro-growth policies. As this hasn’t happened, for most of those born in South Africa this century, hopes of ever achieving even modest prosperity have become remote.

Fixing the economy requires fixing our politics. Fixing our politics requires developing a solutions-focused national dialogue. Our obsession with values isn’t working.


The views of the writer are not necessarily the views of the Daily Friend or the IRR

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Shawn Hagedorn worked in banking, finance and capital markets in New York City and London before emigrating to South Africa. He holds degrees in finance, economics, and international business and his writing has appeared in a number of publications including Business Day, Sunday Times, Mail & Guardian, and Politicsweb, amongst others.