ANOTHER week, another downgrade. If this gets any more regular we’ll be able to calculate to the day how long it took the African National Congress (ANC) to shut down the economy as an investment prospect. One is tempted to blame President Jacob Zuma but there are a few problems with that. First, he probably doesn’t read the press. Second, he might miss the point and third, as he keeps saying, he is only doing what the ANC asks him to do.
Some ideologically unencumbered ministers know what’s going on. Pravin Gordhan does. So, evidently, does Susan Shabangu. The fact is, the investing world is losing patience with South Africa really quickly now. We may retain some sort of geopolitical significance, mainly by virtue of our location (pretty much the only thing the ANC can’t "transform") but we’re becoming the sort of place only investors with shiny suits will take seriously.
The litany of poor judgments, bad policy, rotten leadership, political division, blatant corruption and just plain embarrassment that Zuma has brought to the highest office in the land is too long to list in a column as tight as this. Suffice to say, we are all about to pay the price for the ANC having elected him, and for the probability that they’ll do so again.
The price will look something like this: violent strikes, political uncertainty and an inability to put the nationalisation bogey away will, in an already skittish and uncertain investment world, encourage long-term investors to look elsewhere. The value of the rand will fall. Because under the ANC the economy has deindustrialised, we now import more ordinary things and they will cost more. But we will keep importing them and that will force prices up — making it more expensive to run businesses and people will lose their jobs. There’s more, but you get my drift …
Zuma has been, effectively, silent during the wave of strikes of the past few months. His inability to lead is breathtaking. He had a meeting last Friday with business and union and government leaders, but one wonders why. Did he have anything to tell them they don’t already know? No. The meeting appears to have been designed so they could tell him what the hell is going on.
What would be the point of telling him? Oh, Sir, the state, under your leadership, is collapsing. The economy is on the verge of falling below generally accepted investment grade levels. What are you going to do? We know the answer is "nothing, because anything I do to clean up the mess I’ve made could trigger a threat to my personal and political comfort".
In the middle of the wider Zuma Calamity, it is comforting to hear and read middle-class black SA standing up for what is right. The most recent columns from Barney Mthombothi and Mondli Makhanya are outstanding for their courage. An open letter from Kay Sexwale to the few Rivonia trialists still living yesterday was equally wonderful, particularly as she hails from one of the ANC’s royal families. Describing her agony over whether, or how, to continue voting for the party that liberated her, she comes to a powerful conclusion: "I don’t know who I will vote for (in 2014). All I know is that Jacob Zuma will never again hold office with my consent."
I was also very excited to see the Black Business Council (BBC) hold a conference last week on the subject of creating black industrialists. Such people are exactly what the country needs. They are not, however, what the ANC needs. You cannot run an independent manufacturing business in the economic climate the party has created. You need to export and import, both made impossible by a wildly volatile currency. You need to hire and fire as economically as possible, both made impossible by ANC labour laws. The BBC is still very close to the ANC but that is one marriage that would not survive real black industrialisation. Just as the old National Party became a direct threat to Afrikaner wealth, so soon will the ANC become a threat to black wealth. Then all bets are off.