He has brought the country back from the brink, but it is still teeteringApr 25th 2019Print edition | Special report
ON A SATURDAY evening in Soweto there are few better places than Chaf Pozi. Beers are flowing, meat is grilling and patrons are dancing with a sense of rhythm and abandon that is alien to a journalist from The Economist. It is an exhilarating spectacle. It is also a revealing one, for it hints at progress made by South Africa in the 25 years since the end of apartheid, the brutal system of white rule formally established in 1948. At the restaurant in the Johannesburg township, patrons paying upwards of 140 rand ($10) for a meal are mostly from the black middle class, which has grown since 1994. They mix easily with a smattering of white revellers.
The world pays less attention to South Africa than it did a generation ago. Nelson Mandela’s release from prison in 1990, and his victory in the country’s first democratic elections four years later, captured the global imagination. Though interest has waned, the country, which goes to the polls on May 8th, still matters. Partly this is for material reasons. South Africa is the most industrialised economy in Africa, the continent’s business hub and its most influential actor on the global stage. Yet just as important is its symbolism. If it were to overcome its history of repression and racism, that would offer hope to all countries, in Africa and beyond.
And South Africa is a better place to live than in 1994. A liberal constitution protects the rights of all citizens, no matter their race. The poor have more of their basic needs met. The share of households without electricity fell from 42% in 1996 to 10% in 2016, while the fraction going hungry has plummeted. Blacks make up 50% of the country’s middle class, according to recent research. This is much lower than their overall share of the population (80%) but it is a sign of uneven progress. Black South Africans now account for more sales of suburban homes than whites do.
Most South Africans believe that race relations are better today than they were in 1994. A survey published in 2016 by the Institute of Race Relations (IRR), a think-tank, found that 54% of respondents felt relations were better than a generation ago, with 22% saying they had stayed the same, and 20% believing they had worsened. According to the same study, just 5% of South Africans said “racism” was the biggest issue facing the country.
There are other signs of tensions easing. The vast majority of parents say they do not care about the race of their children’s teachers. Interracial marriage remains rare, but has risen from 1 in 303 in 1996 to 1 in 95 by 2011. Popular culture reflects some of these shifts. In “The Bachelor”, a popular television show, a white South African man chooses a partner from 24 women of all races. He is not put off by the prospect of paying lobola, or bride price, if necessary. (What this says about gender relations is less clear.) Though racial animosity endures, everyday interactions in schools, universities, and the workplace, as well as the passing of generations, is slowly making things better.
That is the good news. The bad news is that most of the progress made since 1994 came before 2009. It was then that Jacob Zuma began his nine-year reign as president, during which time the thuggish kleptocrat and his cronies ransacked state-owned enterprises (SOEs), plundered local and provincial governments, and ravaged the law-enforcement institutions set up to curb such looting. The corruption of the ruling African National Congress (ANC) predated Mr Zuma, and is outlasting him, but it was the former president who took venality to stratospheric levels.
The Zuma administration also ran the economy into the ground while ramping up public spending. The ratio of debt to GDP rose from 26% in 2008-9 to 56% in 2018-19. GDP per person is lower than it was in 2013. Analysis by Standard Bank suggests that, relative to the trajectory the country was on before Mr Zuma became president, his regime lost South Africa 1.1trn rand ($78bn) in GDP, 300bn rand in taxes, and more than 1m jobs.
The damage of the Zuma years extends beyond the economy. In a deeply unequal society with a violent past, a sense of mutual obligation is especially important. Yet, though South Africa has some of the largest mineral reserves on the planet, the commodity it needs most—trust—is in short supply.
Data seem to support this. In February the Edelman Trust barometer, an annual poll by the eponymous public relations firm, found that just 21% of South Africans trust their government, the lowest share among the 26 countries it surveys. Research by Afrobarometer published last year found low levels of trust in institutions such as the police, which is distrusted by nearly two-thirds of the populace. A separate report in October by the same pan-African research organisation discovered that 62% of South Africans would be willing to trade democracy for an unelected leader “who could impose law and order, and deliver housing and jobs”.
Nearly half of South Africans were born after the end of apartheid—the so-called “born free” generation—and frustration with democracy is often sharpest among the young. At Chaf Pozi restaurant, plenty of that group have gripes. “There were all these promises made to us, but not enough has been done for black people,” says Lesedi Kgasago. “In 1993 you and I would not be having a beer and discussing politics—that’s a huge change,” says Sechaba Nkitseng. “But I still wake up in a shack in Soweto with two unemployed parents.” Keneiloe Tutu explains that she graduated from college a year ago and has not found work. “There are literally no jobs.”
It must feel like that. South Africa has 0.8% of the world’s population and 3.2% of the unemployed. Nearly 40% of those aged 15-34 are not in work, training or education. The inability of so many people to find work exacerbates South Africa’s levels of inequality, which are among the highest in the world. The highest-earning 10% receive 55-60% of all income, while the richest 10% own 90-95% of all wealth, according to Anna Orthofer of Stellenbosch University. Research published in 2018 by Simone Schotte, Rocco Zizzamia and Murray Leibbrandt claims that the decisive factor in being middle class or not is whether someone in your household has a job. Roughly one quarter of the country has a rich world standard of living. The other three-quarters are struggling.
If unaddressed, many South Africans believe that the mix of corruption, an incompetent state, low growth, high unemployment and extreme inequality could threaten the country’s future. “If South Africa does not take the desperation of poor people seriously,” writes Frans Cronje of the IRR, “We will get to a point where a rampaging mob will march down West Street in Sandton [Johannesburg’s main business district] and set fire to the banks and the law firms…a really dangerous cocktail is developing.”
Fortunately Mr Zuma is no longer president. In February 2018, after a bruising battle within the ANC, Cyril Ramaphosa succeeded his rival. The 66-year-old had long sought the top job. As a teenager in Soweto he told his flabbergasted father that he would one day be president. And there is probably no one with as much experience in the main arenas of South African life.
In the 1980s Mr Ramaphosa led the National Union of Mineworkers. Bobby Godsell of Anglo American, a mining conglomerate, called him “the most skilled negotiator I have ever met”. These skills were tested in the 1990s, when Mr Ramaphosa became secretary-general of the ANC and led talks on the transition to democracy. In 2000 Tony Blair asked him to help oversee the disarmament process after the Good Friday agreement in Northern Ireland.
At the end of the 1990s Mandela, against his own instincts, bowed to pressure from within the ANC, and anointed Thabo Mbeki as his successor rather than Mr Ramaphosa, who went into business, one of a small number of well-connected black South Africans to benefit from the policy of “black economic empowerment”. Sold as a mass scheme, it benefited a lucky few, who got preferential access to equity in large firms.
After making about $450m in short order, Mr Ramaphosa returned to politics. In 2012 he was elected the ANC’s deputy president, and in 2014 became deputy president of the country. Critics ask what he was doing while the country was being looted. Friends argue he was biding his time before moving against Mr Zuma’s camp at the ANC’s conference in 2017. They say this was typical of the man: persuasive, patient, ruthless when necessary.
Since taking over, Mr Ramaphosa has slowly begun to repair the damage done by Mr Zuma. Pollsters predict he will be returned as president in the election on May 8th. Much of the South African establishment, including many businessmen, are rooting for him. They argue that Mr Ramaphosa is the only person who can reform the country while holding its social fabric together. “He is the last hope for democracy,” argues Colin Coleman, the chief executive of Goldman Sachs in sub-Saharan Africa.
Yet it would be naive to put too much hope in one person. This special report will argue that, though Mr Ramaphosa is a marked improvement on his predecessor, he faces huge challenges. If he truly wants to turn things around he needs to restore the battered institutions while embracing radical reforms to the economy and public services. This will require him to take on vested interests in his own party, and quickly. Mr Ramaphosa may be a patient man, but South Africa is running out of time.
You can also hear John McDermott speak about youth unemployment in South Africa on The Intelligence, our daily podcast
Correction (May 2nd 2019): The map in this chapter has been amended to reflect the current provincial borders