Professor Colin Bundy
Jacob Zuma and the Saga of State Capture
Professor Colin Bundy - Jacob Zuma and the Saga of State Capture
- Good evening, good morning, good afternoon for those of our friends who are in America. And this is the second hour of tonight’s Lockdown University. So it’s a bumper edition, back to back presidents of South Africa, still part of the South Africa series as we march towards our very historic, as everybody’s calling it, election 30 years in. 30 years post-apartheid. And this is the country we have now. We are joined by a Lockdown University fave, as the young people call it, Professor Colin Bundy. And he is talking to us about Jacob Zuma and the saga of state capture. If you are only joining us for this hour and didn’t see the hour before, please do take the time to go and check out the session just before, which was about Thabo Mbeki, and both of those, left and right, left hand, right hand of South Africa as it has been literally for 25 years. These are the two men that have been at the helm of South Africa almost for the past 25 years. Colin, over to you. Thank you so much for coming on this late in the evening.
- Thank you very much. And as always, it’s a delight to be on this remarkable platform provided by Lockdown University. I’m lecturing tonight and I want to do three things. Firstly, I want to tell the story of Jacob Zuma’s rise to power. He served nine years as president. And his abuse of that power. And this involves a phenomenon that has entered the lexicon of South Africa’s political vocabulary, state capture, and refers especially to Zuma’s links with the three Gupta brothers. The linkage is sometimes referred to as the Zuptas. Secondly, I want to look more closely at the African National Congress at the ANC, which has been in power for 30 years. It’s the oldest political party in Africa. It was founded in 1912, and its long struggle against white minority rule in apartheid and was crowned in 1994 with victory. Victory in the shape of the negotiated settlement, which conferred political power on the ANC while leaving the economic status quo substantially intact. I want to ask why and how a party with its history changed from being a liberation movement to a government, and to a government that descended into a maelstrom of corruption, factionalism, economic woes and electoral decline. And then thirdly, I reflect very briefly on how one thinks about the ANC overall just weeks before the national elections. Let begin, though, with the enigmatic figure of Jacob Zuma. Born in 1942 into an impoverished peasant community in the centre of KwaZulu-Natal. His father died when he was four years old. His mother was a domestic servant. The young Zuma had no formal education. Instead of school, he tended the family’s cattle and goats. He joined the ANC at 17 and three years later became a member of the ANC’s underground armed wing, MK. In 1963 he was arrested while trying to leave the country for military training.
He was charged and convicted of sabotage and conspiracy to overthrow the government. He was sentenced to 10 years on Robben Island, the specially built prison for political offenders. His political education actually began in Durban before he was arrested, when he attended night school classes run by trade unions. But it was on Robben Island that he was the beneficiary of the remarkable programme of general education and political education run by ANC seniors. And over his 10 years on the island, 10 years, incidentally, without a single visitor, Zuma’s political commitment clearly deepened. A biographer judges that he left the island, quote, “With a clarified and focused political understanding,” unquote. And after his release, Zuma spent two years back in Natal where he was active in reestablishing an ANC underground presence in that province. 1975 he moved into exile. First Swaziland, then Mozambique. And then in 1987 to the ANC headquarter Lusaka, Zambia. And it was there that he was appointed as chief of the intelligence department. In other words, dealing with all the sensitive matters of intelligence and counterintelligence. And it was in exile that Zuma came to work extremely closely with Thabo Mbeki. The two men could hardly have been more different.
Mbeki born into the educated elite, son of a major ANC thinker and leader, university educated, urbane, cosmopolitan and sophisticated. Zuma’s family was dirt poor and he was a graduate only of Robben Island. But when the exiled ANC first began its negotiations with South Africa’s national intelligence service, it was the pair of them who attended the very first and subsequent meetings. And in the early 1990s when both men returned to South Africa, they remained extremely close. “Joined at the hip,” Anthony Butler, the biographer of Ramaphosa, called them. And they were part of the leadership team during the negotiations process from 1992 onwards. Mark Gevisser wrote a massive biography of Mbeki, and in it he writes about Zuma in exile. I’m quoting. “In almost every historical account in which Zuma has featured, he is portrayed as intelligent, brave, committed, and exceptionally pleasant,” unquote. Although poorly educated, he had a canny wit, acute political sensibilities, and strategic savvy. And these attributes stood him in good stead in the 1990s. In their book of called “Enemy of the People: How Jacob Zuma Stole South Africa,” Basson and du Toit remarked that his charm was legendary. That he could disarm opponents with warmth and empathy, and that he possessed an incredible ability to connect with people on a personal level. They quote, Helen Zille, leader of the official opposition, the Democratic Alliance, who in 2009 recalled what she called his charm and charisma. Quote, “Every time I’ve been really, really tough on him in the public arena, he meets and greets me as if he’s been dying to see me and he could not be warmer or more generous,” unquote. In 1997, Zuma was elected deputy president of the ANC.
And when Mbeki succeeded Mandela as president of the country in 1999, Jacob Zuma became deputy president of the country as well. Their relationship was soon to unravel. And a major factor in this was the extent to which Zuma was implicated in issues of corruption which swirled around the massive arms deal. The new ANC government bought 30 billion rands worth of ships, vehicles, planes, weapons, and so on. And the deal was signed in December, 1999. Zuma had by then entered a close financial relationship with Schabir Shaik, member of a prominent Durban ANC family. Zuma financial difficulties. Like many returning exiles, he ran into debt. He was a member of the new elite, participating in a consumer frenzy. 1995 onwards, Shaik extended a series of interest-free loans to the impecunious Zuma, and then in 1999 wrote them all off. It appears that a secret agreement had been entered between Shaik and a French arms company that Zuma would receive 500,000 rand a year in return for ensuring that the South African branch of the French firm Thales would be protected from investigation. In 2002-3, the National Prosecuting Authority, the NPA, began investigating Zuma’s links to Shaik. And then it announced that although there was a prima facia case against Zuma, they didn’t believe that they could prove it in court. However, they charged Shaik on charges of fraud and corruption. And his trial ended in 2005 when he was convicted and sentenced to 15 years in jail. In his judgement , Judge Squires mentioned Zuma 474 times and said that there was quote, “Overwhelming evidence of a corrupt relationship,” unquote, between the two men.
Mbeki seized upon the opportunity to rid himself a deputy president with whom he had fallen out. And the NPA, now Zuma has been dismissed as deputy president, the National Prosecuting Authority instituted formal corruption charges against Zuma. In all, they eventually came up with 783 charges of corruption, fraud, racketeering, and money laundering. But they had rushed their case, and when the full court case actually opened the charges were struck off the court role. The NPA had rushed its case and was unready to proceed with the trial. Now, I’m not going to describe the ensuing details, the long running story of Zuma and the court system. Over the years, the charges were renewed, withdrawn again, and renewed again. Zuma and his lawyers, especially Mike Hulley, deployed tactics that have been called a legal Stalingrad, fighting every clause, calling for delays, demanding further details, challenging evidence, and so on, and so on. But the prospect of being tried on these charges hung over Zuma throughout his years as president. And ironically, when he was finally convicted and briefly imprisoned in June, 2021, it wasn’t on these charges, but on a contempt of court conviction. Zuma had refused to comply with a court order that he appear before the Zondo Commission looking into institutionalised corruption. But let me return to developments that followed his first court appearance in 2005. He’s been dismissed as deputy president of the country, but he’s still deputy president of the ANC. And he now announced that he was going to stand for the ANC presidency against Mbeki, and he plunged the party, or they plunged the party into a rancorous and debilitating succession contest. The difference between the two men was reflected in their campaigns. Zuma’s easygoing charm and empathy with ordinary people were his stock in trade.
He was a consummate crowd pleaser, dancing and belting out his trademark MK song, “Umshini wami,” bring me my machine gun. Mbeki’s public phrase was stilted and low octane. He was far better in a committee room than in a public rally. But the crucial development in the run up to the elective conference of Polokwane in December, 2007 before the conference took place, was that elements of the ANC alliance now split with Mbeki. South African Communist Party, the Trade Union Federation, COSATU, and the ANC Youth League, all threw their weight behind Zuma, believing that he would pursue more left-wing policies. And so Polokwane was a disaster for Mbeki and a triumph for Zuma. Zuma was backed by a coalition of the disgruntled, by trade unionists, socialists, unemployed youth, veteran gorilla fighters, Black business tycoons, and the so-called walking wounded. All those who’d been bruised by Mbeki’s intolerance of any dissent. The Zuma slate swept into office with 60% of the vote and dominated the new National Executive Committee, the NEC I’ll call it from here. And in the months that followed branches and provincial structures subjected to the same arithmetic purged of Mbeki loyalists and stacked with Zuma zealots. Mbeki remained national president, but only until September, 2008 when a judge threw out the charges against Zuma and announced that Mbeki had been party to an anti-Zuma conspiracy. The Zuma-dominated NEC held a hasty meeting and voted to recall, that is to dismiss, Mbeki as president. Kgalema Motlanthe served as a caretaker president until April, 2009, when Zuma became president.
And in a strikingly apt coincidence, Zuma’s accession to office April, 2009 is at precisely the halfway point between the beginning of the Democratic era and now. Let me now introduce the Gupta family. Ajay, Atul, and Rajesh, originally from Uttar Pradesh in India. Atul moved to South Africa in 1993, and by 1998 he was running a successful IT company called Sahara Computers. By 2003, he’d been joined in Johannesburg by his brothers. And like many other newly established Black entrepreneurs, the Guptas sought to ingratiate themselves with the political elite. Zuma was a… Tension and it was his favourite son, Duduzane Zuma, who became their channel to the office of the presidency. Duduzane established a string of business interests with Gupta help, and the Zondo Commission estimated in 2020 that his net worth was at least 1 billion rands. Duduzane also became actively involved with the Guptas in appointing favoured individuals to positions of influence. Rather than trying to describe a whole host of separate acts of corruption by the Gupta and the employees, I’d like to paint with a broad brush and outline how they operated. And this was clearest in the case of state-owned enterprises or parastatals which I’m going to call SOEs, because the ANC inherited a family of large SOCs playing a significant role in South Africa’s economy. These included the SOE responsible for electricity generation, Eskom, for rail and freight, Transnet, for the railways, PRASA, the South African Airways, telecommunications, including the SABC, and so on.
And in 2008 the ANC approved a policy aimed at expanding the role of the SOEs in the economy. And this was meant to build infrastructure and capacity. PRASA, for example, was set to buy 1,064 new locomotives. Eskom, was going to build two massive new coal-fueled power stations, and so on. And this meant that the SOCs would be spending very large sums of public money on raw materials such as coal and steel, on equipment, and technology, and on services. Quite simply, if anyone could insert themselves into the supply chain of the SOEs, they could make huge amounts of money. And if they could insert themselves in ways that gave them an edge, an unfair advantage, so much the more lucrative. But how could anyone, how could the Guptas obtain such an advantage? Well, the SOEs were set up as companies. Each SOE had its own chief executive officer and its senior management team, and they were responsible to a board of directors. The chair and the members of the board of directors were appointed by the relevant government department. And it follows quite logically, if anyone, if the Guptas could influence who became the chair or the members, or the senior managers of an SOE, and could ensure that these individuals were pliable and compliant to the Gupta’s interests, well, bingo. And in essence, that was how the Guptas, with the approval of the Zuma family, proceeded. The slew of key appointments were made in order to facilitate the aggrandisement of the Zupta economic empire. From cabinet ministers, directors general of state departments, SOE chairs and board members, and in more junior positions.
And absolutely crucially, what these corrupt officials allowed was the subversion of the procurement and tender processes. They would enter and scupper the supply chain. And by the end of the Zuma administration in 2018 these hollowed out SOEs were in deep financial troubles. Mismanagement and the spiralling amounts paid to Gupta front companies saw them plunge deeper and deeper into debt. By 2016, government guarantees, government subsidies on the debts owned by the SOCs had reached 467 billion rands. It was expected to reach 500 billion by 2020. The equivalent of 10% of South Africa’s GDP. Addition to the looting of the SOEs, Zuma targeted two clusters of government institutions, the security cluster and the finance family. And I’ll describe each very briefly. Arguably the most destructive legacy of the Zuma years was the capture and neutering of criminal justice institutions. These included the police, the Hawks. That was the unit created to tackle organised crime, economic crime, and corruption. The NPA, which I’ve already mentioned, and the state security agency. And these were targeted in large parts to protect Zuma, his family, their cronies, and colleagues against investigation, prosecution, and ultimately imprisonment. Good men and women were removed from office and replaced by compromised, and sometimes incompetent individuals. Zuma’s political capture kneecapped these institutions removing the capacity and independence needed to execute their constitutional mandates.
Once Zuma had compliant appointees in office, he also used the security agencies to threaten his political enemies, to make allegations about them, and even concoct spurious evidence against them. He also moved to neutralise the independence of SARS, the South African Revenue Service in the treasury. SARS, under the leadership of Pravin Gordhan, who was a model government department and revenue service. It also played a crucial role in investigating tax frauds and financial crime. The takeover of SARS by Zuma had three components. Firstly, the organisation was infiltrated by employees aligned to corrupt politicians. And these included, crucially, Tom Moyane appointed by Zuma in 2014 as the commissioner, the head of SARS, to replace Gordhan. Secondly there was a sustained campaign to discredit a group of senior managers who were responsible for detecting financial crimes. And they were depicted as quote, “A rogue unit.” And South African newspapers, especially the Sunday Times, ran a string of stories based upon allegations that they accepted as fact. And they subsequently acknowledged that they had been hoodwinked, but their apology came too late. By then 55 senior staff members had left SARS. And then thirdly, SARS was restructured in order to strengthen Moyane’s hand. The structuring was carried out on advice from the South African branch of the Boston-based consulting firm, Bain International. The Zondo Commission subsequently found that there had been direct collusion between Zuma and Bain in reshaping SARS. I mention this because it’s often overlooked that the machinery of state capture was oiled by consultants, by accountants, and by PR professions.
The British government barred Bain from tendering for government contracts for three years following what it called its grave professional misconduct. The South African branch of McKinsey was charged in 2022 for its role in the Transnet bid for locomotives. The South African branch of KPMG was fined by America’s accounting oversight board for its role in the looting of a bank. And the leading British PR firm, Bell Pottinger, played a disgraceful role in its slick fake news social media campaign against selected white business interests launched on behalf of the Gupta family. When the extent of Bell Pottinger’s role was revealed in the South African press, the reputational damage was so great that the PR firm went bankrupt. But to return to SARS. Its capture weakened its skills base and the investigative capacities of the department. And SARS underperformed against its own targets for tax collection between 2014 and 2018. Its recovery began when Ramaphosa dismissed Moyane, but the predictions are that will take years to rebuild its capacity. After SARS Zuma set his sites on a larger target, the treasury. Here he overreached himself. The debacle that ensued in December, 2015 when he dismissed a competent finance minister and replaced him with an unknown back-bencher, Des van Rooyen, was a crucial moment in Zuma’s eventual downfall. It… Financial crisis.
And van Rooyen’s tenure of office was four days. In the following year Zuma tried to replace… Oh, Zuma brought in Pravin Gordan as van Rooyen’s replacement and then tried to sack Gordan, which he did without even discussing it with his own cabinet colleagues in March, 2017. And this led directly to his dismissal a year later. Because after years of defending Zuma, and after its loss of votes in the 2016 local government elections, the ANC leadership finally moved against Zuma and the Guptas. In January, 2016, the ANC Secretary General called for decisive caption… For decisive action against state capture. The first time the term was used publicly in South Africa. In 2016, November, 2016, the public protector, Thuli Madonsela, produced a highly damaging report on state capture and she formally recommended the appointment of a commission of inquiry into the phenomenon, which became the Zondo Commission. And then in April, 2017, South African media began reporting on the so-called Gupta Leaks, a cache of 200,000 emails leaked by whistleblowers that proved beyond doubt how extensively the tentacles of state capture had reached. In 2017, Ramaphosa opposed elected as president of the ANC. In February, 2018 there were police raids in the early morning on the homes of the Gupta and Duduzane Zuma. Jacob Zuma redesigned that evening. Cyril Ramaphosa was sworn in as South Africa’s fifth state president. I’m now going to turn from Zuma to a separate consideration of the ANC as the party in power. A party which enjoyed overwhelming electoral support up until 2009, winning about 2/3 of the vote in 1999, 2004, and 2009. But even in this early period before 2009, the narrative of success was being undermined by two overlapping forms of malaise. Factionism and infighting on the one hand, and corruption, careerism, and cronyism on the other. Take factionism first.
From the very outset, the ANC had been home to very different groupings, exiles and insiders, trade unionists and businessmen, moderates and radicals. But Factionism took on a new form when Mbeki and Zuma squared up at Polokwane. Positions polarised. Rivalry became organised. The genie was out of the bottle. The ANC became increasingly riven by polarisation and by infighting. Factionism became endemic. Now, factions formed around policies and individuals, but most centrally they were shaped by issues of power, position, and placement, and the resources that these confirmed. Rival factions competed for spoils at branch, municipal, provincial, and national levels. Gwede Mantashe, Secretary General warned bluntly infighting, and factionism was a major threat to the ANC. Quote, “The influence of money in our processes has the biggest potential to change the character of the movement,” unquote. But the influence of money spoke even more loudly when it came to corruption. Mandela, as early as 1994, warned, and I’m quoting, “A parasitic class in the ANC has emerged.” And in his farewell address in 1999, declared that the country’s future depended upon its resolve, quote, “In dealing with the scourge of corruption.”
By then, of course, the arms deal had poisoned the well on an industrial scale. Its rigged tenders and kickbacks have been replicated ever since in tenderpreneurship. And public office has been used by individuals, covertly or brazenly, to loot the state run by its own party. Now, to its credit, the ANC was alarmed by corruption. It invited business and civil society to join in the launch of an anti-corruption forum. Mbeki, time and again hectored his associates on the topic. And he introduced a code of conduct intended to hold members to the straight and narrow. In 2007 McClunty conceded that corruption within the ANC was quote, “Far worse than anyone imagines.” And in August, 2010, when COSATU broke with Zuma, its leader, Zwelinzima Vavi drew a memorable line in the sand. Quote, “We are headed for a predator state. We’re a powerful, corrupt, and demagogic elite of political hyenas who are increasingly using the state to get rich,” unquote. But to its discredit, the ANC’s hand wringing did not translate into effective controls. 2010 it was absolutely clear that corruption was widespread. And despite this, the ANC simply failed to take decisive action against individuals clearly identified as sources and conveyors of corruption. And again, the arms deal set the trend. Powerful forces in the ANC were determined to block its full and proper investigation. And since then a fundamental problem confronting anti-corruption initiatives has been the vested interest of politicians, officials, and businessmen and women who blocked or de-legitimized probes and prosecutions.
This was nowhere more obvious than in parliament where for three years, against all reason and logic and evidence, the ANC majority refused to act on the evidence of Zuma’s personal corruption in the financing of his homes in Nkandla. To focus on corruption at the level of Zuma and the Guptas misses a vital part of the story. The extent to which corruption became endemic at much lower levels much earlier on, especially in municipal politics. And if you want to read just one book to get a sense of the scourge of corruption, the criminality and violence with it engenders, and its devastating effects on the daily lives of citizens, I would recommend Crispian Olver’s 2017 publication, “How to Steal a City: The Battle for Nelson Mandela Bay.” Nelson Mandela Bay Metropolitan Municipality, to give it its full title, or The Metro for short, is the local government structure for the city of Port Elizabeth now called Gqeberha, the most populous city in the Eastern Cape Province. And for a decade before Alva was sent in by the ANC to try to clean up the act in The Metro, it had descended into a spiral of incoherent management, political factionism, and looting by well-placed private interests. They were incompetent officials in post because of their political connections, and not their skills. And they colluded with unscrupulous companies in subverting the tender and procurement systems. A whole network of staff in the council’s treasury, processed unauthorised payments. On the line, political culture with a frightening set of values have taken root. When people… These new rules were marginalised or forced out of office. State capture in Nelson Mandela Bay reflected and replicated what was taking place elsewhere.
Now, how does one begin to explain the speed and the extent to which corruption took hold of public life in South Africa? And I’m going to start by reminding you that South Africa is far from unique in this experience. Many post-colonial states exhibit similar forms of patron-client politics and crony capitalism. Elsewhere in Africa, in the Arab world, and in South Asia. Drawing upon the comparative literature, several partial explanations emerge. Firstly, where did the corruption… Firstly, it was partly an expression of old political habits. The ANCs prior history had many aspects of patron-client relationships and the role of networks of notable families. Secondly, there’s a good deal of evidence that periods of transition and rapid change involve organisational disarray, insecurities, and uncertainties, which tend to increase the reliance on existing relations of patronage. In the ANC’s case, in the run up to the 1994 elections, whose imperative for the party to build followings in areas where it had little previous support, in the Bantustans and many smaller rural towns. And the most effective way of doing so was to incorporate the linkages, like those between the Bantustan leaders and their followers. New regimes often act to move their members and supporters into local and national state structures. Exactly this happened after 1948 when the National Party and the Broederbond engineered a large scale repopulation of the civil service with Afrikaans-speaking whites. In the ANC’s case this was carried out in terms of the deployment policy driven by Thabo Mbeki, putting ANC cadres into civil service posts in all the departments.
And the result of this was that many of the new public officials lacked the requisite skills or experience for their new posts. And this rendered them willing to take direction from their political patrons, and susceptible to the blandishments of those seeking favours. Fourthly, and in my view most importantly, the ANC’s behaviour was directly shaped by the political economy of the new South Africa. That’s an economy dominated by large conglomerates. It’s been navigated for decades by white businessmen who inherited connections and opportunities racially defined by apartheid. And in post-apartheid South Africa it’s proved very difficult, even for the new Black business elite, to compete with them. There were still barriers to entry to the formal economy. And the price paid for white corporate failure to promote Blacks internally led to the expansion and the wholesale diversion of black economic empowerment into profit seeking through political connections. And as Stephen Friedman has argued, politics, and not the market economy, is the key route to prosperity for most Black and marginalised South Africans. Through politics activists can catapult themselves into middle class lifestyles otherwise out of reach. In local government in particular, politics has become a full-time occupation for many. Using political offers to gain advantages that the private sector fails to offer has led to the factionism, the vote buying, and the manipulation that beset the ANC today. This dynamic plays out at various levels within those who’ve benefited from the transition to democracy. Consider for a moment the lower ranks of the new black middle class. Teachers, nurses, civil servants, technicians, clerks, and so on. A typical family has moved into a new suburban home. Their children are in better performing schools. Their consumer horizons have expanded. But they’re also financially overcommitted and in debt. And in a very thoughtful article, Joel Netshitenzhe has pointed out that their position is often tenuous and insecure.
Quote, “Unlike their white counterparts, these emergent middle strata do not have historical assets, and they have large nuclear and extended families to support,” unquote. And it’s not difficult to imagine how this squeeze makes members of this group, at the very least, susceptible to client-patron arrangements. And then there’s a new Black upper class, many of whom are the direct beneficiaries of Black economic empowerment policies. At the apex of that process has been the emergence of BEE moguls, a remarkably wealthy and politically well-connected cluster of individuals who move seamlessly between high political office and the upper reaches of the corporate world. BEE led to a partial deracialization of the wealthiest 10% of South Africans, but in simultaneous facilitated a rapid expansion of crony capitalism constructed around political connectivity. And I’m going to conclude by reviewing the present state of the ANC more broadly, especially with elections weeks away. For what it is worth, and it’s nothing more than my opinion, I think that the consensus in polling is broadly accurate. The ANC is predicted to win about 41% of the vote at the end of May. Roger Southall in his magisterial survey of Southern African liberation movements turned governments calls this the phase that he calls the slow death of liberation movements.
And the ANC’s case replicates that of others elsewhere in Africa. And there’s another fascinating comparison. Bill Freund’s written an article comparing the Indian National Congress, Nehru’s party which took over power from Britain, a hugely popular movement which lost electoral control 29 years after taking control. So 29, 30 years seems to have some comparative purchase there. ANC’s history over the last 30 years cannot be reduced simply to corruption and state capture. And at the risk of oversimplifying, it’s clear that its first decade or decade and a half in power was a relative success story. The ANC replaced authoritarian minority rule with multi-party democracy. It established a viable government. It delivered stability and continuity. It achieved fiscal stability and a modest economic revival ushering in the longest uninterrupted growth period since the 1960s. As Johnny Steinberg has recently written, “By whatever measure one chooses, the first 15 years of its power had positive outcomes. The 2011 census results,” this is a longish quote. “The census results showed that almost everyone in South Africa was better off than there had been in the mid 1990s. The incomes of the bottom 40% had more than doubled, while the murder rate had more than halved. The democratic state had delivered electricity to more than 8 out of 10 households. There were more nurses, police officers, and school teachers per capita than ever before in the country’s history. The state had built more than 2 million houses and given them away to the poor. It had expanded pension, disability, and child support coverage to the most distant corners of the land. Why the ANC won landslide victories like clockwork every five years is not hard to fathom. Life had become demonstrably better for most Black people, and these improvements were a palpable and obvious dividend of democracy. The ANC owned the idea of freedom. It had delivered the new order, and it was its custodian,” unquote.
Makes the same point. He reminds us, “Previously, no government had ever provided both sets of benefits to non-white South Africans, rights and services.” Now it hardly needs saying that these advances have stalled and in many instances been reversed over the last decade and a half. Per capita income in South Africa peaked in 2011. By the end of ‘23, the end of 2023, the average South African per capita income had fallen by 13%. Average South African lives in a state that struggles to produce electric power, that fails to manage the logistics of getting exports to market, the state with local governments in crisis across the country. And with its borrowing costs, its debts crowding out its ability to invest in the future. Now these economic pains cannot all be blamed on the ANC government. As Thabo Mbeki marked earlier this evening, the 2008-9 banking crisis hit South Africa as it hit other emerging economies. And I would add to that, and perhaps more importantly, during the successful years of the 2000’s the country’s fortunes rode upon the back of the commodity supercycle. Good prices for commodities, especially minerals. And this is an economy where half the exports derived from the mineral value chain. And ever since 2008, every non-oil commodity exporter in Africa and Latin America has suffered, South Africa amongst them.
We know that the Zuma years did dreadful damage, not only to the economy, but also to the integrity and functioning of key institutions. And a damaged state is more difficult to fix than it was to break. We also know South Africa, will continue to be buffeted by global forces in ways that make it difficult to address the central issues of unemployment, poverty, and inequality. And it’s too easy to succumb to despondency when confronting the future. So I want to end by identifying grounds for modest optimism. Grounds to balance the challenges ahead with a cautious… Can sound like a truism, but it’s important to point out that South Africa retains a genuinely independent and tough-minded media, an independent judiciary that has consistently held government to constitutional account, and a civil society, which by international comparison, is vigorous, assertive, and increasingly influential. Think for a moment of the role that the media played in challenging Zuma. Or that of the courts in identifying official malfeasance. Or the dramatic growth in NGOs and activist groups that has taken to the streets and the courts in responses to state capture. And it is an if, if progressive forces in civil society could coalesce in the politics of hope and engage in the painstaking slog of building a genuinely democratic progressive movement. The lineaments of post-apartheid politics can yet be redrawn. Thank you very much. I’m going to look at the questions.
Q&A and Comments:
Monte Golden and I were at the same school. I had no idea.
Alex Irvin Fortescu says “The best template for ridding of corruption is the example of Singapore. Severe penalties in place.” I agree that Singapore did that. I think it’s a very difficult place to take as a comparator or a template. It’s a small society, it’s a relatively affluent society. and it is very homogeneous. You know, it’s not a mix. It’s not a multiracial multicultural society like South Africa and others.
Will Finkelstein says “Similar attempts at the same kind of corruption here in the US, there and elsewhere.” Yes. Have I any idea what the current total credit card debt of the South African population is? I have no idea, other than that it must be vast. Public indebtedness is a massive issue in South Africa. You would probably find some sort of answer in a book by Deborah James on credit in South Africa. The title of, he’s Crispian Olver, not Oliver. Crispian Olver’s book is called “How to Steal a City: The Battle for Nelson Mandela Bay.” Thank you for those people who liked it.
Q: “As an American,” says Stuart Seidel, “I was aware of some of the problems under Zuma, but I’ve clarified it.” Can I say a bit more about BEE, Black Economic Empowerment?
A: Black Economic Empowerment began relatively modestly as a means of accelerating the entry of skilled and qualified, but inexperienced Blacks into the corporate world. And early on, under Black Economic Empowerment, individuals like Cyril Ramaphosa, Wendylu Harvey, Tokyo Sexwale, and I mean you can add other names, were welcomed onto boards. They brought experience. And Ramaphosa, for example, had been an outstanding trade unionist and a negotiator, and had really led the ANC side during the negotiated settlement. And he was an asset to any board. That was at the outset. But it then it didn’t go very far. The capital, big business, tended to concentrate on figures like that and-
Can I also just add. Can I also add, you know, I think BEE is often only seen in that context that you’re talking about where big business are only concentrating on the numbers of their ownership. But actually BEE, which is why later it was called Broad-Based Black Economic Empowerment is actually a series, not just one aspect, but I think up to seven different parts within what they called the scorecard for each organisation. And it involved affirmative action, which is about diversity hires, is what the trendy term is now. It was about ownership. So the ownership of the particular organisation had to be structured in a particular way to allow, again, a diversified ownership that would allow over different periods of time and different industry sectors. There were minimum requirements and maximum requirements.
There were charters, codes of conduct-
Codes of conduct.
And so on, and then-
And it was also about skills development. You know, it was also about developing the skills. So not only bringing in young Black graduates or particular individuals who come from previously disadvantaged parts of the society, but also saying within your organisation, those individuals who’ve worked in your organisation as a low level skilled worker, what are you doing to empower that worker and upskill them so that they can also be able to move up the scale, as it were. So it’s quite an intricate piece of legislation that involves many aspects of the business, primarily with the function of transformation. So, how do we bring in, into the business, into the economy, people that were previously excluded. Women as well. Women, Black people, and people of other races, you know. So they are different definitions of who that Black refers to in the Broad-Based Black Economic Empowerment. I hope that helps.
It does. I got one more question here.
Q: Alfred asks, “Is the South Africans placing Israel in front of the ICJ primarily a way decide…” suppressing the money corruption?
A: I don’t think it was really about South African domestic politics. I think it was an expression of South African legal and foreign affairs opinion. And you know, with the history. It was a South African, Professor John Dugard, who for many years served as the United Nations, and I’ve forgotten what his title was, but he was responsible to the United Nations for observing and reporting on Israeli-Palestinian relations. And the ICJ court case definitely came, in part, out of that history.
But it does have a dividend. It does have a dividend in terms of, particularly in places like the Western Cape, where the DA is the majority and governing party, but is also very much a Muslim community. So in those areas, it simply does have a dividend. And we’ve seen over the past couple… Because we’ve watched these politics playing out so much, you know, what we have seen in the past couple of months is we have seen an incredible kind of forgetting, as it were, of a lot of people in terms of some of the things that have gone wrong, particularly in light with the ANC. And of forgiving, because of what the ICJ means or purports to mean, or as it’s been projected by a lot of people here in South Africa. Tomorrow we are having a conversation. At the 6:00 South African time we are having a conversation with the national chairperson of the South African Board of Jewish Deputies. And it is particularly about being Jewish in South Africa in 2024. Join us, please. That’s my punt for tomorrow.
Let me just see, I think I have one more question come up on my screen. This is the thesis that there’s a country, which I believe is Iran, that’s financing a bit of the South African national debt. That’s been investigated by academics. And I think it’s largely an urban myth, from what I can understand. I’ve certainly not looked into it myself.
It’s not the South African national debt that is actually being talked about and investigated. It is particularly the African National Congress. So it is the ANC, in particular, that this conversation around following the money with regard to where the money came from and where the money went. Because we do know that leading up to this election period, the ANC was, for all intents and purposes, broke. They didn’t have the money to run the election campaign that they’re currently running. There was very much in the media here in South Africa an issue of a liquidation of assets because they had not paid a supplier from the last national election. There were reports of them failing to pay staff at Luthuli House. but suddenly they have quite a lot of money to pay for billboards and postcards and posters and t-shirts, and, you know. So that’s why that conversation started. And I know that there are people that are investigating that.
Yeah.
What else? Who else? Whew.
I keep seeing another number pop up. It’s just things.
Duana anyone to know about the transfer of assets to individuals. Do you want to go, Colin?
Again, I mean, it’s been pointed out, Phumis pointed out that BEE means so many things. In the business world what BEE did was put individuals in positions to use stocks and shares to make investments and to conduct business deals, conduct transactions with the advantage of being in the right place.
Or proximity to power, you know? So some companies-
One must remember how important it’s to be, you know, in the boardroom of… Standard Bank or anything else in South Africa.
But also close to the ANC and close to the governing and the policy making structures.
As I said, it’s that ability to move, I think I said seamlessly between, you know, the boardroom and the committee room, between the world of capital gains and political influence.
And shortcuts. Shortcuts on the side of some businessmen, you know? Because you don’t want to do the right thing. You just want to give the shares to somebody that you know is going to be in the right room at the right time. That’s what state capture became actually, eventually, you know. That’s how it came about and that’s why it became what it became.
Okay. For me, unless you have a final word, I think we should thank our audience. And also just, if I can comment on it, it’s been very, very fascinating watching you and Gareth the last couple of weeks. And we’ve had, you know, a great deal to think about. Pleased to have been a small part of it. Thank you,
Thank you, thank you for coming on board. There’s so much more. But we have a very short time to compress that here. So thank you for coming and sharing your knowledge on this topic. Goodnight everyone. See you tomorrow.
Goodnight everyone.