The slow demise of the ANC: Political change, economic decline, and state corruption in South Africa - Egmont Institute
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No. 18
December 2016
#1
September 2009
The slow demise of the ANC: Political change,
economic decline, and state corruption in South Africa
Robert Besseling
previous municipal elections in 2011. Crucially,
The primary consequence of South the ANC lost outright control of councils in
Africa’s August municipal elections has several major cities, including the country’s
been the relegation of the once- largest city Johannesburg, the adjoining
dominant ANC party to a industrial and aviation hub of Ekurhuleni, and
predominantly rural party that holds the administrative capital Pretoria (Tshwane
onto power through alliances with Municipality) in the industrial heartland of
traditional leaders in rural locations. Gauteng Province, as well as Port Elizabeth
Consequently, the main opposition will (Nelson Mandela Bay Municipality), an
now lead frail minority governments in important manufacturing hub and port city in
some of the country’s largest cities. the traditionally ANC-aligned Eastern Cape
Over the next year, President Jacob Province. However, the party still retained the
Zuma will face growing opposition largest share of the vote in Johannesburg.
from within the ANC party that will
seek to prevent him from seizing The main opposition Democratic Alliance (DA)
control over state-owned enterprises in only gained 26.9% nationally (up from 23.9% in
a bid to approve key spending projects 2011). Yet the DA extended its appeal with
and to influence his own succession. middle class urban voters and gained the highest
He will also face a challenge from ANC share of the vote in Pretoria and Port Elizabeth,
leaders to serve out his full second term while extending its control over the country’s
until 2019. second largest city Cape Town in Western Cape
Province, where it now leads councils in most
municipalities. The radical leftist Economic
Freedom Fighters (EFF) party, which was only
INTRODUCTION formed in 2013, gained 8.2% of the vote and
On 3 August, South Africa held nationwide will play a key kingmaker role in the hung
municipal elections that were credited by councils. The Inkatha Freedom Party (IFP) also
observers as transparent and fair, despite some increased its share of the vote (4.3%), mostly
minor localised irregularities and disruptions. drawn from ethnic Zulu voters in KwaZulu-
The long-time governing African National Natal province.
Congress (ANC) party gained 53.9% of the total
vote, significantly down from 62% at the
EGMONT Royal Institute for International Relations#1
September 2009
The elections marked the first time that the retailers and banks closed as a precautionary
ANC’s share of the national vote fell below 55% measure. The ANC condemned the violence but
since taking power in 1994. The shift in support refused to withdraw Didiza as its candidate.
from the ANC to opposition parties was Defence Minister Nosiviwe Mapisa-Nqakula
motivated by the ANC’s weak record on then hinted that the military could be deployed
municipal service delivery, such as provision of if violence continued to escalate.
water, electricity, and housing, as well as
economic mismanagement, with unemployment State media effectively imposed a black-out on
at 27% and the central bank projecting zero the Pretoria riots, distorting reporting of the
growth this year. Moreover, widespread violence. The government used its influence at
perceptions of corruption implicating senior state broadcaster the South African
officials, most notably President Jacob Zuma, Broadcasting Corporation (SABC) to suppress
have tarnished the party’s reputation. Politically reports of protests ahead of the elections, while
motivated interventions in financial policy have independent analysts are no longer presented on
also left South Africa’s debt just short of a SABC during such reporting. SABC’s Chief
downgrade to non-investment ‘junk’ grade. Operating Officer Hlaudi Motsoeneng has
Major credit rating agencies postponed a widely specifically said that the broadcaster would no
expected further downgrade in June until after longer cover so-called service delivery protests, a
the municipal elections. decision which was influenced by ANC leaders,
such as Communications Minister Faith
Muthambi and Minister of Small Business
ESCALATING VIOLENCE Development Lindiwe Zulu. SABC’s Acting
The political shifts caused by the municipal Political Editor Sophie Mokoena, who leads on
elections take place against a background of elections reporting, has been in charge of
growing contestation and violent protests. The implementing the coverage ban. SABC’s radio
run-up to the municipal elections was marred by and television channels draw a cumulative
localised outbreaks of violence in some major audience of 100 million a week and are the only
cities. On 20 June, riots erupted in Pretoria after source of news for South Africa’s rural
the ANC named former cabinet minister Thoko communities, where the ANC still enjoys strong
Didiza as its candidate for Pretoria’s Tshwane support.
municipality. The ANC’s local branches had
supported incumbent mayor, Kgosientso Following the municipal elections, violence also
Ramokgopa, a local to the Tshwane region, broke out at the country’s largest educational
while Didiza hails from KwaZulu-Natal facilities. Riots have frequently broken out at
province. Moreover, Didiza is seen as a political universities over the past two years, often
appointee and closely affiliated to President including arson attacks and destruction of
Jacob Zuma, who is unpopular in Tshwane’s property. In September, student protesters and
Gauteng province. The protests erupted in private security personnel fought running battles
Pretoria’s black townships of Mamelodi, in and around various campuses of the
Hammanskraal, Soshanguve, and Atteridgeville University of Johannesburg (UJ). The violence is
and then spread to the central business district indicative of the escalating nature of student
and major roads linking the capital to the protests across South African tertiary education
platinum mining region around Rustenburg. facilities and the spread of the protest
Protesters burned busses and trucks, while movement to previously unaffected campuses.
EGMONT Royal Institute for International Relations
2#1
September 2009
Classes have been suspended indefinitely at with the DA in municipal councils to deprive
many universities, yet violent protests by student the ANC of its control over these municipalities.
unions demanding various reforms, including
the provision of free education, continue across As a result, the DA has formed minority
the country. governments in the two municipalities with the
largest expenditure budgets in the country’s
Grievances over the delivery of public services, commercial centre of Gauteng Province:
such as electricity, housing, and water, have Johannesburg and Pretoria (in Tshwane
fuelled increasing demonstrations from among Municipality). Both the DA and EFF had
particularly poorer neighbourhoods against local pledged not to form municipal coalitions with
governments in various parts of South Africa in the ANC party led by President Jacob Zuma.
recent years, with such demonstrations often The DA will consequently take control of the
becoming violent. Protests are most likely in majority of the country’s USD21 billion (in
townships near major cities such as 2015/16) municipal operating budget for
Johannesburg, Cape Town, Durban, and Port payment of salaries and utility procurement, as
Elizabeth. These protests are usually motivated well as the USD4 billion capital expenditure
by perceptions of poor quality of services budget for infrastructure expansion. The capital
provided to impoverished communities, as well expenditure budget could outpace the national
as a perception of local government corruption budget growth rate over the next few years and
and unhappiness with the ruling ANC’s reach USD4.8 billion by 2018. The DA will also
selection process for local councillors, in which control the port and vehicle manufacturing city
local communities are not consulted. Few of of Port Elizabeth (in Nelson Mandela Bay
these issues have been successfully addressed, Municipality) in Eastern Cape Province and it
indicating that violent protests are likely to already controls the country’s second largest city
remain frequent over the next few years. of Cape Town.
Politically-motivated violent protests also are
likely to increase and intensify ahead of 2019 The main opposition party’s authority over
national elections. municipal operating and capital expenditure
budgets is therefore heavily disproportionate to
FRAIL MINORITY CITY ADMINISTRATIONS its share of the national vote – it gained under
One of the immediate consequences of the 27% nationally at the recent municipal elections.
municipal elections is that many municipalities At the previous municipal elections in 2011, the
were left without a clear governing majority DA gained 24% of the national vote and
which has necessitated the need for coalitions. subsequently controlled 16% of municipal
There is a precedent for coalition formation in budgets. The ANC now only controls 42% of
South African municipalities, although this has the country’s municipal budgets, down from
not yet been replicated in major cities. On 17 82% following the 2011 elections, even though
August, the leader of the radical leftist EFF it gained 54% of the national vote at the latest
party, Julius Malema announced his party would elections. This massive disproportion arose
not be joining coalitions in the country’s largest from the DA’s highly successful targeting of
municipalities with the main opposition DA or Gauteng’s large urban areas at the latest
the national governing ANC party. However, elections.
Malema confirmed that the EFF would vote
EGMONT Royal Institute for International Relations
3#1
September 2009
In Johannesburg, the DA won 38% and the administration and persistent horse trading
EFF won 11% of the vote, against the ANC’s practices could drive policy paralysis and cause
45%. The new DA mayor Herman Mashaba will delays in city procurement, maintenance and
preside over a minority government in a council construction contracting, and service delivery.
that oversees a USD3.2 billion operating budget Moreover, municipal contracts signed by
and a USD730 million capital expenditure previous municipal administrations led by the
budget. The municipality includes the banking ANC could face revision. The DA and EFF
and commercial district of Sandton, as well as have campaigned heavily on eradicating
large industrial areas. In Pretoria (Tshwane), the corruption from municipal governments and
DA won 43% and the EFF won 12% of the reviewing all procurement contracts, initiating
vote, against the ANC’s 41%. The new DA graft investigations into questionable deals, and
mayor Solly Msimanga will preside over a prosecuting service providers accused of
minority government in a council that oversees a malpractice.
USD1.9 billion operating budget and a USD280
million capital expenditure budget. The SHIFTING POLITICAL ALLEGIANCES
municipality includes industrial areas and a large The primary consequence of the municipal
vehicle manufacturing sector. elections has been the relegation of the once-
dominant ANC party to a predominantly rural
But the minority governments that will emerge party that holds onto political power through
in the two largest metropolitan areas of Gauteng alliances with traditional leaders in rural
are likely to be frail as important ideological locations. As a result of the ANC’s slide in
differences exist between the DA and EFF. The major cities, the party’s support could drop close
EFF advocates nationalisation of banks, mines, to 50% in the 2019 national elections. This is
and other key industries and seeks expropriation likely to trigger a backlash among urban-based
of farmland without compensation for ANC leaders, especially those in Gauteng who
redistribution. Moreover, EFF leader Malema saw the largest electoral setbacks at the
has been charged with tax evasion and money municipal elections. The most likely threat to
laundering in relation to issuance of public President Jacob Zuma’s dominance is therefore
contracts in his home Limpopo Province, expected to come from Gauteng Province,
though Malema has denied all such charges. where the president is particularly unpopular.
There is no guarantee that the EFF will The anti-Zuma faction will be supported by
consistently vote with the DA, which would influential veteran leaders of the ANC’s former
undermine the administration of some of the armed wing (Umkhonto we Sizwe), as well as
country’s largest cities and most important the ANC’s governing alliance partners labour
industrial areas. This would affect public service federation the Congress of South African Trade
delivery, such as provision of electricity, water, Unions (COSATU) and the South African
and housing. After two years, the EFF could Communist Party (SACP). President Zuma is
force an election re-run in order to gain a larger widely expected to remove SACP and COSATU
share of the vote if the DA’s administration has leaders from influential posts in an upcoming
been undermined. In the meantime, the EFF government reshuffle, which would further
will seek to extract heavy concessions from the exacerbate internal alliance relations.
DA during negotiations to secure EFF support
on municipal council votes. Such weak
EGMONT Royal Institute for International Relations
4#1
September 2009
However, President Zuma is unlikely to be The main implication of such political
recalled or step down as national president until uncertainty following the 2016 municipal
at least December 2017, when the ANC holds elections will be continued policy paralysis over
an elective leadership congress and when Zuma key pieces of legislation governing the mining,
is due to stand down as ANC party president. energy, power, private security, and agriculture
He still retains significant control over the sectors. Moreover, the government will be
party’s top decision-making body the National unable to implement cost-cutting and business-
Executive Committee (NEC) and will be able to friendly measures proposed by Finance Minister
influence his own succession, which is being Pravin Gordhan in February, accelerating a likely
contested by two rival camps spearheaded by downgrade of the country’s debt rating to non-
Deputy President Cyril Ramaphosa, who enjoys investment grade later in 2016. There is also a
the support of the anti-Zuma faction, and by higher risk that the government proposes new
Chairperson of the African Union Commission radical and populist policies to boost its support
Nkosazana Dlamini-Zuma. Dlamini-Zuma will ahead of the 2019 elections. Credit rating agency
depend on the endorsement and political Fitch says ‘this could include costly spending
backing of President Zuma, who is her ex- measures that could require breaching
husband, to ensure the support of rural expenditure ceilings or redistributive regulatory
provincial ANC leaders and the party’s Youth policies that might undermine economic
and Women’s Leagues. In the case that growth.’ Populist proposals already resulted in a
President Zuma steps down or is recalled as review of South Africa’s trade status with the
national president following the August US.
elections, he will be succeeded by his deputy
Ramaphosa, which would strengthen his The succession contest within the ANC will also
chances of succession in 2017. trigger outbreaks of violence between partisan
supporters, especially within key battleground
The relative political weakness of the two provinces such as Gauteng. The lead-up to the
apparent frontrunners is likely to allow more municipal elections was marked by riots in
succession candidates to emerge and seek the Pretoria and disruptive strikes at fuel refineries.
support of defeated ANC structures in large The political involvement of the trade unions
Gauteng cities. Potential figures around whom also indicates heightened risk of disruptive
support for a third candidacy could rally include industrial action over the next year in key
former president Kgalema Motlanthe, former industries, such as mining, manufacturing,
Reserve Bank governor Tito Mboweni, ANC power, and transport, as well as the public
Secretary-General Gwede Mantashe, SACP sector.
leader Blade Nzimande, and ANC Treasurer-
General Zweli Mkhize. Since the ANC has ONE LAST STATE GRAB
adopted a top-down political slate system to Following the municipal elections, the ANC
contest the party’s leadership, indications of faction around President Zuma is leveraging the
such a third candidacy are likely to become party’s poor performance in the elections as an
apparent towards the end of 2016, one year excuse to impose discipline and unify around
ahead of the December 2017 ANC elective the president. On 23 August, police summoned
congress. Finance Minister Pravin Gordhan to answer
questions over the legality of an alleged ‘rogue’
unit in the South African Revenue Service
EGMONT Royal Institute for International Relations
5#1
September 2009
(SARS), which was previously headed by December 2015. The ANC Youth League, who
Gordhan. In reaction, the rand currency fell by are loyal to President Zuma, have also called for
4%, before slightly recovering. Markets reacted the party’s elective congress, slated for
in the same way as in February, when the December 2017, to be brought forward to late
allegations were first made public. Pravin 2016. This would catch opponents of President
Gordhan’s attempts to instil new confidence in Zuma off guard and scupper any potential
the country’s economy has become the focus of formation of a rival political slate to succeed
an emerging coalition between moderate President Zuma as party president or to thwart
members of the governing ANC party and any attempts for Zuma to run for a third term as
business leaders against the leadership of ANC leader.
President Jacob Zuma.
On 22 August, the cabinet also announced the
However, Gordhan is being frustrated by allies formation of a new committee on state-owned
of President Zuma. State investigative and enterprises (SOEs) headed by President Zuma.
prosecutorial unit ‘The Hawks’, which is led by The committee would have the authority to
Zuma ally Berning Mthandazo Ntlemeza, has overrule the finance minister on key spending
opened an investigation into alleged wrongdoing decisions, such as the proposed restructuring of
by Gordhan when he headed the SARS between a USD624 million deal with Airbus Industrie
1999 and 2009. Gordhan has denied made by national carrier South African Airways
wrongdoing. The SARS is now led by another (SAA), whose chairperson Dudu Myeni is a
Zuma ally, Thomas Moyane, who has repeatedly close ally of President Zuma. Gordhan has
and publicly challenged Gordhan’s authority. opposed the financing deal, while he has also
The increasingly intense dispute between Pravin omitted appropriate spending plans in his latest
Gordhan and President Zuma is highly budget for a number of Zuma’s flagship policies,
politically motivated as its outcome will have such as a USD90 billion nuclear power
strong implications on Zuma’s eventual expansion and the roll-out of national health
succession. The dispute also has a seriously insurance.
negative impact on Gordhan’s attempts to avert
further downgrades of South Africa’s President Zuma will have two remaining
investment rating later in 2016. ambitions in his tenure as national president.
Firstly, his government will seek approval for
Meanwhile, President Zuma is gearing up for a high spending projects, such as the SAA
cabinet reshuffle in which his critics are most financing deal and the procurement of Russian-
likely to be side-lined. There have been calls for made nuclear reactors, as lucrative rent-seeking
the suspension from the ANC of the party’s opportunities. President Zuma will also become
entire leadership in Gauteng, where the ANC more ruthless towards his critics and many
suffered heavy losses in the municipal elections. opponents of his plans will be dismissed in
President Zuma is also likely to remove upcoming cabinet reshuffles. Secondly,
members of alliance partner the South African President Zuma will seek to influence his own
Communist Party (SACP), such as Blade succession as party president (unless he runs for
Nzimande and Rob Davies, who have criticised a third term) and thus as national president
him. Pravin Gordhan is likely to be replaced, before the next general elections in 2019.
which could trigger another collapse in the value Dlamini-Zuma will depend on the endorsement
of the rand and stock markets, as it did in and political backing of President Zuma, while
EGMONT Royal Institute for International Relations
6#1
September 2009
her relative political weakness is likely to allow beforehand. The succession contest will polarise
more succession candidates to emerge and seek the long-time ruling party and intensify
the support of defeated ANC structures in large ideological differences among its various interest
Gauteng cities, which President Zuma will seek groups and political allies, potentially
to avoid through cabinet reshuffles and accelerating an eventual permanent break-up of
suspensions of opponents from the party. the ANC.
CONCLUSION Robert Besseling, PhD, is the Executive
The governing African National Congress party Director at risk intelligence firm EXX Africa,
has been relegated to a predominantly rural which analyses and forecasts political,
constituency, which will trigger a divisive security, and banking risk on 54 African
backlash from its urban constituency over the countries. He is regularly invited to speak at
next year, causing policy paralysis for key major international conferences on topics
industries, exacerbating security risks, and such as metals and mining, trade and export
retaining high probability of a credit downgrade finance, and global security matters. He
to sub-investment grade. As a result of the makes frequent appearances on televised
ANC’s slide in major cities, the party’s support media, as well as contributions to
could drop close to 50% in the 2019 national international print media. His twitter account
elections, increasing the probability that an is @ExxAfrica
opposition coalition would replace it at national
level for the first time. While President Zuma
still controls the ANC’s top decision-making
body, as well as the security and intelligence
services, he will increasingly be seen as an
electoral liability ahead of the 2019 national
elections, forcing him to be replaced
Royal Institute
for International Relations
The opinions expressed in this Policy Brief are those of the author(s) alone, and they do not necessarily reflect the views of the Egmont Institute.
Founded in 1947, EGMONT – Royal Institute for International Relations is an independent and non-profit Brussels-based think tank dedicated to
interdisciplinary research.
www.egmontinstitute.be
© Egmont Institute 2015. All rights reserved.
EGMONT Royal Institute for International Relations
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