South Africa

By | Updated Dec 2, 2016 7:51 PM UTC

When the African National Congress swept to power under Nelson Mandela in South Africa’s first multiracial elections in 1994, its campaign slogan assured “a better life for all.” Yes, enforced segregation has ended. But more than a quarter of the workforce remains unemployed and 22 percent of the population still doesn’t get enough to eat. Census data shows white households still earn six times as much as black ones. Mounting discontent is manifest in street protests and strikes. While the ANC is holding on to power nationally, party support has fallen in cities amid charges of corruption and incompetence. Many doubt that the ANC will ever be able to deliver that “better life.”

The Situation

President Jacob Zuma has lurched from crisis to crisis. The situation became so bad that in November some government ministers tried to convince the ANC’s National Executive Committee to oust him. This failed attempt followed a report by the nation’s graft ombudsman that said Zuma and some ministers may have breached the government’s code of ethics. In March, the nation’s top court found Zuma violated the constitution when he refused to repay taxpayer money spent on his private home. Zuma has clashed with his finance minister, Pravin Gordhan, ever since he was pressured to appoint him to the post in December 2015. On Oct. 11, Gordhan was summoned to appear in court on fraud charges, which he called politically motivated; on Oct. 31, prosecutors withdrew the charges. The ANC had a weak showing in August elections — it lost majority control of four of the biggest urban centers, including Johannesburg, the economic hub, and Pretoria, the capital. Voters expressed anger over the stagnating economy and scandals surrounding Zuma. South Africa’s credit rating is approaching junk status. The public schools system, ranked among the world’s most useless, leaves millions of youths without marketable skills. Anger over rising tuition costs and persistent poverty levels have led to violent protests by South African university students.

Unemployment's Steady Grip
South Africa's jobless rate, by quarter
 
Source: Statistics South Africa

The Background

In 1652, the Dutch East India Company established a supply post in Cape Town, which the British occupied in 1795 to secure the sea route around the southern tip of Africa. British immigrants settled mainly in coastal areas, while Dutch colonists — known as Boers or farmers — migrated to the interior. Discovery of inland gold and diamond deposits spurred the Anglo-Boer Wars, which the British won in 1902, making South Africa a British colony. White colonists adopted a constitution in 1910 that disenfranchised blacks, whom they viewed primarily as cheap labor. The National Party took power in 1948, stripped black South Africans of their land and denied them decent education and health care under a policy known as apartheid, or apartness. In 1961, Prime Minister Hendrik Verwoerd declared a republic and severed ties with the U.K. South Africa endured decades of economic sanctions and an armed struggle by the ANC and other groups before the government agreed to free Mandela from prison in 1990 and hold multiracial elections. The ANC has won a majority in every election since.

Source: Bloomberg

The Argument

The ANC-controlled government can point to successes. The economy has almost trebled in size in the past two decades and the poverty rate has been reduced from 45 percent in 1993 to 37 percent in 2014. Life expectancy is rising and infant mortality rates are dropping. Yet the economy grew just 1.3 percent in 2015 — less than half the rate for all sub-Saharan Africa. The government’s failure to add power plants as it connected millions of black households to the electrical grid led to rolling blackouts that hit manufacturing hard. Laws that discourage the hiring of temporary workers added to unemployment. Many have lost patience. While the ANC still has support thanks to its role in ending apartheid and the state’s extension of welfare to almost a third of the population, the party is nervous. The two main opposition parties, the pro-business Democratic Alliance and the socialist Economic Freedom Fighters, won 35.2 percent of the national vote in August, up from 28.5 in 2014. While the two parties have vastly different visions for the future, they share a desire to see the ANC taken down and struck a power-sharing agreement to manage the major cities. 

The Reference Shelf

  • The Economist found that 20 years after its first multiracial elections, life in South Africa was better than in 1994, but the country was headed in the wrong direction.
  • The New York Times profiled the head of the opposition party, Democratic Alliance, and the public protector trying to battle corruption.
  • An internal ANC review after the 2014 election found voters “think we are performing badly.”
  • Bloomberg QuickTake Q&A on how the local elections were a test of the national mood. 
  • Bloomberg QuickTake: “The Politics of Platinum.”

First published Aug. 3, 2015

To contact the writer of this QuickTake:
Michael Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editor responsible for this QuickTake:
Anne Cronin at acronin14@bloomberg.net