Our youth unemployment crisis is as globally unrivalled as it is deeply entrenched. This traces to our ruling party creating a patronage network which is as massive as it is reckless.

Inequality-chanting long boosted support for the cadre deployment, BEE and localisation policies which have expanded patronage at the expense of economic growth. As inequality then became as extreme among blacks as between blacks and whites, the ANC modified its messaging to emphasise its self-serving version of ‘transformation’.

Now, as the thirtieth anniversary of our political transition nears, broad prosperity has become unattainable. If we had sought transformation through economic development, this country could have been on a vastly more favourable trajectory.

Over 60% of our young adults are unemployed and there are no paths to improving this dreadful policy failure without much greater global integration – which the ANC’s patronage-focused policies preclude. Rather, our ruling party pretends that it is redressing racial disparities. Yet, only 5% of school leavers are white while its policies ensure that a majority of today’s young black South Africans will be perpetually poor.

The ANC’s policies are not designed to address our ultra-elevated levels of poverty, unemployment or inequality. Instead, they have focused on ‘transforming’ our economy into a feeding sluice for an enormous web of patronage.

Duelling accusations

Our national discourse is dominated by duelling accusations of racial injustices versus corruption and incompetence. This benefits the ANC electorally by reinforcing status quo thinking. The ANC’s firm embrace of patronage-anchored politics does not meaningfully increase the party’s electoral vulnerability. A majority of voters either see this as a reasonable response to apartheid or they are beneficiaries.

Workable solutions are required to advance beyond our unhelpful status quo debates. Such solutions require a far greater appreciation of today’s primary growth drivers.

China’s astounding economic growth was achieved despite much corruption and patronage because they aggressively pursued intense global integration. China’s world-changing transformation accepted economic basics while adapting to a rapidly evolving global economy. The ANC has been routinely dismissive of both.

As ANC leaders have, however, long recognised that patronage spigots will sputter without large-scale investment flows, South Africa’s business leaders identified investment conferences as an opportunity to show how interests could align. This initially seemed promising.

Paved with grievances

But whereas investors have a builder’s mentality, the ANC’s experience with success is a path paved with grievances. The organisation only finds its stride when denouncing injustices.

However, the reason global poverty and inequality have plunged in recent decades is that so many people, companies and countries sought to master niches, great and small, while aligning their efforts to serve affluent markets. This happened despite abundant grievances, not because of them.

The post-1994 ANC needed to transform itself by replacing liberation movement traits with those of a capable political party. A constitutionally defined democratic landscape should have spurred the organisation to advance from grievance activism to one where electoral pressures create a culture that emphasises workable solutions and accountability. This didn’t happen.

The international community offered contradictory insights. The rise of Asia demonstrated how massive upliftment can be achieved at a very rapid pace. Meanwhile, identity politics and its travelling companion, grievance activism, were being indulged by Western media and universities. The latter provided validation for the redistribution policies which sustain the ANC’s patronage web.

Finding niches

If South Africa lacked natural resources and if, like China four decades ago, nearly all our citizens had been poor, we would have had little choice but to focus on integrating into the global economy through finding niches where we could add value to exports. But much capacity for commodity exporting alongside significant clusters of affluent consumers and much tourism potential meant patronage could allow one generation to splurge recklessly at the harsh expense of subsequent generations.

While our pre-1994 racial oppression enhanced the political viability of the patronage-focused policies which followed, that era’s sanctions, combined with our geographic positioning, also conditioned us to accept the isolationist economics which favour patronage interests.

Consequently, rather than encouraging our businesses to pursue high growth through competing internationally, the ANC’s patronage agenda was tacitly accepted. Merit and competitiveness were then progressively undermined by BEE, cadre deployment, minimum wages, tenderpreneurs and localisation.

Recent efforts by big business and the ANC to spur investment-led growth had meagre potential to reduce unemployment. Such efforts favoured capital intensive ventures, and our economy is remarkably ineffective at ‘trickle down’ benefits. The recent investment conference was a disappointment and last week’s not very diplomatic dust-up with the US left the rand lurching lower.


We have been confronted with snowballing evidence of the ANC’s incapacity to govern. Nonetheless, none of our leaders has a plan to address obscene youth unemployment. Worse still, much evidence suggests the ANC’s policies and practices are meshing with its patronage requirements to spawn warlord-styled alignments.

When then-president Zuma returned from Russia to announce his Black Industrialist Scheme, it was easy to see this as resembling an oligarch-styled tactic to help gird an increasingly stroppy and oversized patronage network.

Does Julius Malema think like a warlord? Might he soon become a very powerful deputy president? How might he react if the EFF is left out of a coalition government? Would the many within the ANC and the EFF who are inclined toward violence not expect to benefit from further slides toward lawlessness? How hard would it be to trigger a collapse of our electricity grid? Will sabotage replace electoral support as the path to political influence?

The July 2021 looting spree, which resulted in over 350 deaths, evidenced the perils that even inept warlords can provoke. Sabotage of electricity production could also cascade out of control. The level of ‘control’ which is currently maintained is as modest as the related arrests are rare.

Forecasts make clear that our youth unemployment crisis will continue to worsen, thus providing much kindling for social upheaval. We must better appreciate how successful economies have been transformed. Necessity will force us to find innovative ways for our school leavers to integrate into the global economy.

[Image: Hasan Almasi on Unsplash]

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

If you like what you have just read, support the Daily Friend


For 20 years, Shawn Hagedorn has been regularly writing articles in leading SA publications, focusing primarily on economic development. For over two years, he wrote a biweekly column titled “Myths and Misunderstandings” without ever lacking subject material. Visit shawn-hagedorn.com/, and follow him on Twitter @shawnhagedorn