Cape Town – The 2019 national elections and the potential that racially divisive rhetoric could gain traction presented the most significant risks to President Cyril Ramaphosa’s governance and political ambitions.
This is according to the director of the Development Policy Research Unit at the University of Cape Town’s School of Economics, Professor Haroon Bhorat. He was speaking during a panel discussion at UCT’s Graduate School for Business.
He noted that, while there was optimism around Ramaphosa’s election as president and him replacing former president Jacob Zuma, opposition parties saw potential in using radical rhetoric to instigate resentment among the electorate over economic inequalities that persisted in the country.
“One way to cast the last eight years is in the shock and awe of state capture. But this can cast itself again in the growth structure of 1994 which was capital heavy and less labour intensive. If you combine our middle economy growth trap with the toxic political environment, the growth dividends are not there for a society divided on racial lines,” said Bhorat.
He said as a leader Ramaphosa had to find novel ways to “do growth differently”. "We can’t continue on a path that incentivises sectors that do not provide the country with jobs," he warned.
“The percentage change in wage rates across the board is U-shaped. We in this room have gained from growth. Unions and business have engaged in a way that deprived the middle (public sector workers and the like) of a growth dividend.”
He highlighted the divisions made clear by South African society’s reaction to the National Assembly’s adoption of a motion to investigate amending the Constitution to allow for the expropriation of land without compensation. He said this important development was being misinterpreted and distorted by fear mongers to divide SA.
“In the current debate there is too much heat. There is currently a discussion about a topic. This is the same route we took around nationalisation. For those in the top end of the distribution, you should remember that first.
“There is no guarantee that land reform will reshape the economic patterns entrenched in SA and it is ill-informed that the land expropriation debate means someone will show up in the middle of the night and move you out of your house,” said Bhobat.
Economist at Economic Research Southern Africa Raenette Taljaard said the reaction to the land discussion showed that too many South Africans had spent years stuck in silos without addressing the valid issue of inequality in the country.
“We must be realistic about the fact that it is useful for the ANC to have the EFF's more extreme left leaning rhetoric. Political parties are not saints. They are always considering how they will play off of each other’s game. There is a huge emotional connotation to the land debate. But a much more profound conversation needs to happen around the economics of land,” said Taljaard.
Independent political analyst Daniel Silke said there were many novel and innovative ways to drive the debate on land, but that it would be dangerous to allow a party with a radical philosophy on land that could potentially damage the South African economy to drive the debate.
“It is critical to understand who is going to drive the debate of land expropriation. Is it going to be the 8% EFF or the 60% ANC? It is a genuinely important question to answer because I am sympathetic to questions of original sin, and that’s what the land debate is,” he said.
Silke said if not addressed soon, the issue of land and inequality could fester and dent the efforts that Ramaphosa hopes to make. He said the discussion could prove positive if Ramaphosa was able to “marginalise the extremists in this discussion”.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER