South Africa: Rainbow Nation Wants Its Pot of Gold

Even the sternest critic of Jacob Zuma cannot deny that the man has staying power. Despite his colourful past and repeated brushes with the law, a poor performance in his first term and a general sense that at the age of 70 he is unfit for leadership, he won a second term as president of the African National Congress in December with 75 per cent of the vote.

Yet his decisive victory notwithstanding, very few are of the view that the best is yet to come for South Africa.

The country's challenges require much more than the populist hand he tends to play. The official unemployment rate sits stubbornly at 25 per cent, touching 70 per cent among under-25s. The chances of this changing are limited by the grossly under-performing public education system.

Though the budget deficit has been marginally decreasing, projected growth rates continue to fall well below the continent's average six per cent. The taxpayer base is minute relative to the demands of the public purse, with only 5.5 million workers - approximately 10 per cent of the population - contributing.

True, the ANC inherited a difficult legacy from the apartheid regime, but its social programmes are failing to create the all-inclusive society it promised. According to the most recent census, more than 13 per cent of South Africans still live in shacks or slums. The average household income for black families was $6,500 for 2011, while the salary of the chief executive of a leading platinum company a year earlier was $3.3 million.

Such were the features that sparked the Arab Spring two years ago across the north of the continent. Many observers wonder if and when South Africa's day might dawn, but it is arguable that it already has - in the form of labour unrest, the scale of which is unprecedented since the dying days of apartheid.

In the early days of this year, and on the eve of harvest, thousands of farm workers embarked on an indefinite strike to demand that their daily wage of approximately $7.50 be almost tripled, while the mining sector is facing renewed challenges as companies contemplate bleak futures in a country with such an uncertain trajectory.

Until now, labour unrest had been contained largely because the union confederation Cosatu is a political ally of the ruling ANC and a member of the tri-partite alliance (with the Communist Party) that governs the country. Workers, however, are waking up to the reality that such cosy alliances work not in their favour but in that of the ruling party, which has managed to keep wages low and the workforce on side during three successive governments.

That changed, however, half-way through 2012 when mine workers in the platinum belt in the northwest of the country began to call for higher wages at a Lonmin-owned mine. The National Union of Mineworkers (Cosatu's biggest member union), dismissed their demands, and the miners embarked on an unofficial strike. The situation quickly turned violent, leading to the massacre a few days later of 34 miners who were shot dead by police, a tragedy that sparked copy-cat strikes across the sector. By the end of the year, the unrest had cost the mines and the wider economy in excess of $1 billion in lost revenue, earnings and taxes, according to Pravin Gordhan, the Finance Minister.

While the country was burning, little was seen or heard of Zuma as he focused on securing his second term. His ratings were dipping and his deputy, Kgalema Motlanthe, decided to challenge him for the party leadership. Fearful of defeat, Zuma roped in Cyril Ramaphosa, a respected former trade unionist, as his running mate. Together they recorded the most impressive victory in the party's 100-year history.

Ramaphosa is the man Nelson Mandela wanted to succeed him as party president when he stepped down in the late 1990s. A lawyer by training, Ramaphosa was head of the NUM when, in 1987, it embarked on the biggest strike in the country's history. He was also one of the leading authors of the progressive constitution that was unveiled in 1996. But when he lost his bid to succeed Mandela to Thabo Mbeki at the end of that decade, he left party politics and went into business.

Ramaphosa's departure shocked and saddened many, not least Margaret Thatcher, who predicted at that time that we hadn't seen the last of him. The prodigal son is now back, to loud applause.

It was one of Zuma's shrewdest moves. Yet one has the sense there is too much vested in Ramaphosa. In any regard, the ANC has been down this road before. When the party expelled its errant youth leader Julius Malema early last year, it was widely - and wrongly - assumed that by removing him the party had got rid of its biggest problem, which patently was not true as the challenges continued long after his departure.

To think that South Africa's days of woe are over now that Ramaphosa has returned is equally short-sighted.

This year is likely to be one of South Africa's toughest yet. According to Peter Attard Montalto, a London-based emerging markets economist at Nomura International, the mining sector has not seen the end of the labour unrest because the issues that were raised throughout last year were structural and have yet to be solved.

AngloPlatinum's solution to the crisis was to unveil a restructuring plan that would see one of their mines close down, another be mothballed and 14,000 miners lose their jobs. The ruling party threatened to revoke their mining licence in response.

Meanwhile, investors continue to keep a close watch. Though the ANC has opted not to nationalize the mines, it has agreed to introduce a new tax - most likely a tax on profits - which is causing consternation among those who have sought clarity for years about the direction the ANC might take the economy in.

Equally concerning is the move to increase black ownership of the mines from the current 26 per cent to close to 50 per cent, though with little regard for the capital investment that would be required to meet such a goal.

Ramaphosa may appear to tick most of the boxes but the real issues may simply lie beyond his control. When apartheid was abolished almost 20 years ago, the negotiations that brought it to an end allowed for the basic structure of the economy to remain intact: it was to remain white-controlled and be serviced by largely unskilled and poorly paid black labour.

The labour unrest that began last year goes to the heart of that decision. The worker on the wine farm outside Cape Town and the miner on the gold reef have found their voices. Twenty years ago they saw the end of apartheid and, in return for their votes, the ANC promised them that the best was yet to come.

For many of them, it never happened. What Ramaphosa or Zuma can now say or do to silence their cries remains to be seen.

Fiona Forde is the author of 'An Inconvenient Youth: Julius Malema and the "new" ANC', published by Portobello



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