South Africa

ANALYSIS

Get the storm gear out, the wave of Ace-led populism on land and Reserve Bank has only started

ANC secretary general Ace Magashule speaks to journalists at the National Results Operation Center (ROC) in Pretoria on Friday 10 May 2019. Photo: Leila Dougan

How can so many people be so wrong and so right at the same time? Enoch Godongwana, Tito Mboweni and Lesetja Kganyago, pooh-poohed ANC secretary-general Ace Magashule’s unconventional ideas about the mandate of the reserve bank. Then in a rare move late on Thursday, President Cyril Ramaphosa also released a statement attempting to muzzle Magashule, labelling “public spats” about the mandate of the Reserve Bank as unhelpful. The statement followed an emergency Top Six meeting on the economy.

As unsound as ANC secretary-general Ace Magashule’s ideas about the economy are, he is right about one thing: He is armed with a resolution of the party’s Nasrec conference from December 2017. Whatever our various interpretations of its meaning or wording, that remains a matter of debate.

The debate about both the ownership and mandate of the South African Reserve Bank displays the dysfunction of the ANC and quite frankly, we ain’t seen nothing yet. Here is how it came about.

Many economic policy moderates in the ANC were stunned when delegates at the party’s policy conference in June 2017 wanted to nationalise the Bank. In short, they wanted the state to own the Bank. This came as a huge surprise to the group that believes in a free market and traditional macro-economics. The latter group also supported President Cyril Ramaphosa in his battle against Nkosazana Dlamini-Zuma for the presidency of the ruling party. Just like that, policy and political battles were intertwined in an orgy of proxy and real battles.

The Ramaphosa camp started spreading notes about the undesirability of such a move, and how ownership did not affect interest rates. This did not deter their opponents, who were driving two headline policy matters under the broad umbrella of radical economic transformation:

  • nationalise the bank,
  • grab land

The two debates broke through at the main conference in December 2017. On the last day of the conference, all hell broke loose, scuffle after scuffle on the conference floor led to a tactical concession from the Ramaphosa camp. Enoch Godongwana was involved in crafting a resolution about the land issue, which gave in to the expropriation of land without compensation, so long as that did not affect the economy. At that stage, Ramaphosa was chomping at the bit, ready to deliver closing remarks as the newly minted president of Nelson Mandela’s ANC.

If he didn’t concede that point then, the conference could easily have collapsed, and Zuma would have remained head of state, while there would have been endless debates about the decisions of the conference. So the Ramaphosa camp settled, and even ditched its grumbling about whether Magashule really got more votes than Senzo Mchunu for the secretary-general post. It was time for shrewd politics from the CR17 camp, and not for the winner takes all approach. After all, Ramaphosa’s victory gave them a beachhead from which to launch their battle for total power.

His speech writers rushed backstage to make sure the important resolution came out of his mouth, as a way of smothering the populist wave, to give the proponents the sense that they gained a victory. Meanwhile, back at the ranch, the Ramaphosa camp’s strategists knew very well no such large-scale expropriation without compensation would happen. They had, by then, also accepted that the debate about the nationalisation of the Reserve Bank was like a genie out of the bottle. They started arguing that it was financially not feasible. They thought it would die a slow death and there was no need to launch a forceful counter-argument. It was expedience, or pragmatism at best; your call.

This strategy comes straight out of the Jacob Zuma school of political management. The Prince of Nkandla adopted it after the party’s mid-term conference (the National General Council) in 2010, at which the ANC Youth League, with the likes of Floyd Shivambu, managed to force the idea of nationalising mines on the party agenda. So raucous was the debate that some stormed the stage, causing pandemonium and prompting state bodyguards to step in to protect government office bearers such as Zuma and Baleka Mbete. Having survived the Youth League’s attempted coup – the nationalisation debate evolved into a proxy tool to remove him from office – Zuma allowed the debate to rage on. A study was commissioned and two years later the obvious conclusion was reached, that nationalisation was not feasible.

This was at a huge cost to the economy as it created policy uncertainty. Now Zuma is gone; the issues remain. Magashule is now being lampooned for his “quantity easing” statement out of the ANC lekgotla at the weekend. You have to ask one question: Why did the Ramaphosa faction let Magashule out of sight for one minute after such an important meeting? This is how the lekgotla went down, I’m told: There was a “plenary session”, at which all the issues were discussed by highly skilled people and those well-qualified in the rumble of vuvuzela politics and sloganeering. The gathering broke into commissions on Sunday. Naturally, the Economic Transformation Commission gets all the attention. It was a free-for-all. The idea to nationalise the Reserve Bank made its way into the notes that usually get filtered on their way to reporting back to the plenary.

Eventually, Ramaphosa addressed the matter in his closing remarks and was not dismissive, but warned about a hierarchy of priorities, which did not include zooming in on the work of the Bank. He and his confidantes would have thought they did well to suppress the debate. Then Magashule, being Magashule, saw fit to slot it in the press statement to communicate the outcomes of the gathering. Well, he probably did not draft it himself since typing is not an organic skill to people whose fingers are groomed for a variety of other activities, most of which exclude actual writing.

You see, if the CR camp did not value Zizi Kodwa’s role in political management, now is the time to wonder what would have happened had he still been full-time at Luthuli House, instead of being a deputy minister with no constitutionally derived duty or power. The man is like a duck, he looks suave and sounds chilled in TV appearances, but back at Luthuli House, he is the guy who intercepts things and disrupts the likes of Magashule. Also, the new administration has taken the likes of Fikile Mbalula and Mchunu to Pretoria and away from Luthuli House. So the man called Ace has to contend only with Jessie Duarte, his deputy, and a handful of employees. With the help of the ANC constitution, which effectively recognises his role as that of a third-in-command and the general spokesman for the party – additionally to that he has a mini-me in Pule Mabe hanging on his coattails – Magashule is free to cause maximum damage from Luthuli House. It’s like, akekh’ ugogo, the ‘cat is away’ type situation.

At some stage, someone more eloquent than Magashule will join the populist wave and take on the likes of Godongwana and Tito Mboweni. The land and Reserve Bank debates are about to be major talking points in the build-up to the National General Council next year. The two will evolve into proxy tools to weaken Ramaphosa. And his opponents will rely on the decision from the Nasrec conference, however that is meant to be interpreted. They will not succeed in their wish to remove him from office, as that meeting has no such powers. But the nature of the debate will cause serious confusion, that the 22-year-old professional whose job is to sell the rand and our sovereign bonds based on half a news headline will show little faith in our economy. The rating agencies will weigh in and once again punish us for the boisterous, dysfunctional nature of our debates about policy in general, and the economy.

The question remains: If these numerous ANC meetings serve no real policy purpose, why have them? The lekgotla is only a meeting for ANC stakeholders and alliance partners to feel involved in governance and it is followed by a cabinet lekgotla where real but broad decisions are taken, and these are implemented through various events, including the midterm budget statement. The party follows obsolete processes that do not improve its policy offering.

And its conference delegates generally and mostly do not know the difference between “quantity easing” and “quantitative easing” (please give Magashule a break for getting the concept wrong). So, Mboweni and Godongwana better get ready to put out fires as a full-time job until the mid-term conference. They will be right in dismissing Magashule’s take on the serious stuff as being foolish, and yet naïve and plain wrong to think that their assertions in the media effectively quell the debate.

And for as long as the man called J.E.F.F is still the ANC’s head of policy monitoring endeavours in the party, structured debate within the ANC remains a pipe dream. The likes of Godongwana and Mboweni need to attract serious policy wonks back into the party, and in sufficient numbers – because J.E.F.F is preoccupied with other T.H.I.N.G.S – and is evidently not into policy granularities. They need to also push to reform party structures and processes, to elevate the quality of policy debates.

Until that happens, the Top Six will have to mother the likes of Magashule, and watch/correct their every word, the same way they did this week in the aftermath of the debate they term “unhelpful”. If substantive reform is a tall ask, members of the Ramaphosa task force must just buy more fire extinguishers and be ready to do what they were doing this week – putting out fires – for the rest of Ramaphosa’s time in power. The wave of populism is yet to get going. We ain’t seen nothing yet. DM

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