Magazine article New African

"The Economy Is Sick" ... Even Zuma Agrees

Magazine article New African

"The Economy Is Sick" ... Even Zuma Agrees

Article excerpt

The African National Congress (ANC) has always floated on the wings of joy as a party that liberated the majority black population, but with economic hardships increasingly stinging the masses, will the "sick economy", in the words of President Jacob Zuma, send the once-popular party to its grave?

The South African economy is in trouble. Gross Domestic Product (GDP) shrank 1.3% in the second quarter of 2015. There has been a negative growth rate in the manufacturing sector, which is down by 6.3%. Mining, the bedrock of the economy, has declined by 6.8%. There has been a 17.8% decline in agriculture, forestry and fishing. The country's economy has moved closer to a recession, with a drop in GDP in two consecutive quarters. The flipside has been growth in highly technical and low employment financial services and property sectors. On the triple evils of poverty, inequality and unemployment, there remains little to cheer about. The triplet are growing and South Africa remains one of the most unequal countries in the world. If the national currency, the rand was an indicator or a vote of confidence, it would be telling as it has suffered a steady decline in value for the past few months, reaching a record low of 14 rand to the US dollar in August, the lowest since 2001.

The effect of all this on the voting majority poor, poses a great danger to the ruling party.

"The economy is sick," President Jacob Zuma confessed on 30 August when he launched the first unit of a power station in the Limpopo province. The government has had great expectations for the Medupi coal project as a panacea to a country that has witnessed with shock, rolling power blackouts in recent times, which have had a very serious effect on the growth of the economy. Planned load shedding to ease the burden on the national grid has become a way of life. And the national power utility Eskom has become the butt of many jokes, leading to a drastic overhaul of its top executives.

Zuma called upon the business community and labour organisations to put the country first as the domestic economy faces heightened headwinds. Both government and labour movements routinely blame white monopoly capital for the country's economic woes and their effects on the disadvantaged majority.

Meanwhile, amid this already sensitive labour/economic situation, the mining and manufacturing sectors recently announced plans to cut thousands of jobs due to declining commodity prices and subdued demand from China.

While there are myriad reasons, including the bad global economic climate, to explain the malaise in the South African economy, what has become apparent is that apart from the corruption and inefficiencies in most state-run enterprises, private corporations are also not investing in business expansions. Many of them cite the "political climate"--a coded word for the lack of confidence in governance, which translates to the country's rule under the ANC.

Will the ANC rule "until Jesus comes"?

The Stellenbosch University's Bureau of Economic Research found that political reasons for the lack of investment in the economy stood at 70%, with no agreement from various bodies and institutions on how to fix the problem. Political incoherence has been the bane of rumblings. Ideological political positions have often reflected economic viewpoints, leading to polarisation and paralyses.

No doubt economic apartheid still plagues the country. For 21 years now the ANC has fought a battle with the economy--with mixed results. But today, as the economy keeps floundering, voter patience is running even thinner and the ruling party's electoral fortunes have been dipping since 2009, when President Jacob Zuma was elected. There is now a palpable and rising fear of an irreversible decline in the party's popularity, calling into question Zuma's oft-quoted declaration that the ANC will rule until Jesus comes.

The Reverend Frank Chikane, former President Thabo Mbeki's Director General of the Presidency and prominent ANC National Executive Committee member has warned that the party has reached a point of no return, and is in real danger of losing the next elections in 2019. …

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