Why we should be worried about the EFF

2015-08-02 18:17

Many South Africans may be discounting the EFF as noisy, disruptive and undisciplined, but that could be a mistake. With the right strategy, the EFF could successfully tap into the aspirations of the poor, young and unemployed in SA and become a political force to be reckoned with. With policies such as the expropriation of land without compensation and the nationalisation of mines, banks and other strategic sectors, implementation could wreak havoc on our economy.

The EFF recently celebrated its second anniversary in front of thousands of supporters at the Olympia Stadium in Rustenburg. It has exhibited good growth in support since its formation and is not currently showing any signs of going the same way as the UDM and Cope. There have been in-fighting, accusations of corruption and defections, but under the strong leadership of Julius Malema, many of these issues have successfully been dealt with or at least quashed.

The EFF has been in the news constantly since its formation, with much of the focus being on two topics, namely its calls for President Zuma to “Pay back the money” for Nkandla upgrades and its calls for prosecutions following for the Marikana massacre. The party has successfully taken the fight to Parliament, where it has caused numerous disruptions. As a result of these developments, the party has often been seen as disruptive and spoilers within the SA political landscape. Not enough attention is being focused on where to next for the EFF.

There are three areas that the EFF could focus on to cement itself as the home for populism in SA, namely remaining front of mind for potential voters, building its election machine and promoting a positive populist message. The first of these has been the easiest to achieve and an area where the EFF has delivered wins. The party has no problem getting meaningful attention in the press through its pronouncements and activities in Parliament. It has also been successful on the social media front with Julius Malema having c.830 000 twitter followers, almost 5 times as much as Mmusi Maimane and more than any ANC leader.

The building of the election machine has been more mixed. The EFF claims to have branches in more than 65% of the c.4300 election wards in SA. However, there have been reports of in-fighting and weak control of branches. There have also been defections from the EFF to other parties. For the EFF to progress to the next level, it is important that they establish strong branches in a greater proportion of wards and that they appoint strong leaders in those branches that bring with them a constituency and can help to expand support. The strength of Julius Malema as a leader has been important for the EFF to gain the support as it has to date. However, to increase support meaningfully from here, it is important that strong leaders need to emerge across the country to add to the strength of the brand, to garner votes and to promote delivery.

To really tap into the potential support base, the EFF needs to change its dialogue to present a hopeful and positive message to the many poor, young and unemployed South Africans. If the party were to present a strong message of job creation, minimum wages and redistribution, it could accelerate the growth in support from disgruntled ANC supporters. In addition to focusing on the lack of delivery by the ANC, the EFF should also focus the delivery that they intend to achieve. In addition to focusing on the “low” level of wages earned in certain industries, they should also focus on the level of wages that they would demand if in power. In addition to focusing on the high unemployment rate in the country, they should also clearly state what they would do to address the situation if they were to come into power. Instead of the “Pay back the money” slogan, if the EFF were to use new slogans like “We will give you jobs, not grants”, “We will nationalise the mines, boost production and employ more people”, “We will nationalise the banks and redistribute the money” and “We will give you land”, it could really start to mobilise the masses.

If the EFF starts gaining control of municipalities in SA, it would be vital for them to prove that they can govern successfully. They would have to focus on delivery and the implementation of their policies where possible. This will be an important test to see if this is a party of more than rhetoric. If successful, this could accelerate their rise in the polls. The EFF had a modest showing in the 2014 elections, less than a year after its formation. The only municipalities where they managed to garner more than 15% of the votes were Rustenburg (21%), Polokwane, Moses Kotane and Mafikeng. These would be the municipalities to watch for a potential shift of control to the EFF.

In my opinion, the continued rise of the EFF is likely and this presents a meaningful risk to our country. The EFF has a number of very controversial and aggressive policies. When looking at EFF policies, there is a key focus on the redistribution of the wealth in SA to all of its inhabitants. Specific policies include: 1) Land expropriation without compensation; 2) Nationalisation of the mines; 3) Nationalisation of the banks; 4) Free education; 5) Aggressive protectionism; and 6) Higher minimum wages.

Although EFF policies could be very attractive to the disenfranchised, a rise of the EFF could be a scary prospect for SA, its economy and a large portion of the population. If the EFF ever gets into a position to start implementing its policies, it could lead to a meaningful flight of capital, skills and companies. The expropriation of land without compensation, especially farmland, could decimate our agricultural production, which could have a serious impact on our ability to feed our people. The nationalisation of mines could put serious pressure on mines that are already operating under the pressure of weak commodity prices and could result in very detrimental developments insofar as our balance of payments and currency. The nationalisation of banks could lead to a flight of capital and a run on the banks. It could also have unintended knock-on effects impacting all sectors of our economy and our capital markets. One of the reasons that foreign investors find SA attractive is due to its highly developed banking system and high auditing standards. The nationalisation of banks could destroy the confidence that investors have in the SA financial system. In addition, if SA were to start implementing EFF policies, we are likely to see a rapid downgrade of our government debt, which could lead to meaningful increases in yields, making it very difficult to issue new debt.

The impact on the fiscus of EFF policy implementation could be damaging on both the income and outgo side. The result of capital, skills and company flight would be to put meaningful pressure on our tax revenues, while the implementation of much higher minimum wages could aggressively increase outgo. In addition, it would be increasingly difficult to fund any budget deficits on a sustainable basis due to the expected increase in the cost of debt.

However, it is not all doom and gloom in my opinion. I believe that the EFF could add an important voice to the disenfranchised in SA and help to push their agenda more than is currently the case. A rise of the EFF could benefit SA in two ways: 1) It could result in ANC support reducing and in the process put pressure on the ANC tripartite alliance to improve delivery; and 2) It could result in a better outcome for the disenfranchised, especially if those in power implement more employment-friendly policies under pressure from the EFF.

What we must be extremely wary of is to open Pandora’s box. In my opinion, it is perfectly fine for the EFF to rise in support if it means more political competition in SA and better delivery to the masses. However, an EFF that gains control could be very scary. As a result, our government should take note of the risks that the EFF present and pre-empt this. First prize for the tripartite alliance would be to lure the EFF back into the fold or encourage it to wane like the UDM and Cope. I, however, do not see this as a likely outcome and would urge attentions to be focused differently. Instead, the government should focus on improved delivery and job creation. Issues such as load-shedding and education should be addressed with immediate effect. The National Development Plan should be fast-tracked. More (non-cadre) skills should be introduced into government.

In addition, the ruling party and the DA should be open to co-operation. The time will come (as soon as after the 2016 municipal elections) where coalitions will have to be discussed in order to govern key municipalities and provinces. The ANC and the DA should look towards each other as partners to deliver a better outcome to South Africans, ensure that populist pressure does not rise and potential EFF policies are not implemented. The DA should use such an opportunity to become involved in government without abandoning its ideals and demanding better delivery in areas where it becomes involved. The tripartite alliance should use this opportunity to foster more debate and to co-opt non-alliance skills to improve delivery.

I maintain my view that there is very little to choose between ANC and DA policies. Both parties are centrist and business-friendly. A combination of these groupings (whether temporarily through coalitions or via an eventual merger) may be the only way to counter the rise of populism in SA, to effectively deliver a better outcome to the masses, to grow the SA economy and to create jobs. However, for such a combination to be successful, there has to be a meaningful anti-corruption focus and aggressive push towards improved delivery, using all the skills that are available in this country, including non-aligned individuals and the private sector.

Do you see the meaningful risk that the EFF and populism presents to SA? Do you enjoy the growth of the EFF just because it counters the strength of the tripartite alliance? Would you support co-operation between the ANC and the DA if it leads to improved delivery? Do you think it will become necessary to join forces to keep the EFF out? Do you think SA would be better with the EFF at the helm? I would love to hear your feedback.

In the mean time, keep your talking straight!

#SpeakingOutSA #2016MunicipalElections

Marius Strydom is the CEO of MLAX Consulting



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