Business Maverick


After the Bell: The depressing illogic of the EFF election manifesto

After the Bell: The depressing illogic of the EFF election manifesto
Illustrative image | Julius Malema, leader of the Economic Freedom Fighters (EFF), during the party manifesto launch in Durban, South Africa, 10 February 2024. (Photo: Leon Sadiki / Bloomberg via Getty Images)

How is it possible that the EFF’s economic platform can be so impervious to systems now widely accepted by almost every country on planet Earth, including countries with avowedly communist governments like China and Vietnam?

Reading the EFF election manifesto, I was struck by many aspects of it which might take a little unpacking. We know the general thrust of it: it’s a slightly modernised version of leftist creeds like the hyper-statist policies of Cuba and Venezuela. We know it would be an economic disaster of gargantuan proportions; that’s completely obvious. But there are some things we didn’t know. 

Here are some thoughts: 

The level of sheer factual inaccuracy is gobsmacking. For example, it says the “financial sector is the most untransformed sector of the economy” and “the only black participation in this sector is the PIC [Public Investment Corporation], which owns less than 10% of these entities on behalf of the 80% black population. The other 90% of capital is held by the minority 7.3% white population of South Africa.” I am not making this up.

First, the banking sector is probably the single most transformed sector in the entire economy, if not a close second, and was one of the first sectors to embrace the imperative more than 20 years ago. Walk into any commercial bank in SA: the bank’s staff are reflective of SA’s racial make-up; most of the largest banks have or have had black CEOs and managers; all of the banks have long-standing BEE programmes at all levels and have substantial BEE equity ownership programmes. It’s not a total transformation at all levels, but it’s pretty close. 

The PIC’s ownership of SA’s banks is much larger than 10%, not smaller. The PIC owns 13.62% of Nedbank, 14.71% of Standard Bank and 16.16% of FirstRand. And even the notion that the PIC somehow represents “black participation” is factually flawed because the PIC does not represent black South Africans or even necessarily the state. It invests the pension savings of all government employees, past and present. 

My guess is that if you looked closely at the beneficial interests of most investment houses, the PIC’s ultimate beneficiaries are less racially representative than, say, Allan Gray — but I could be wrong. Nobody has done this analysis because investors generally don’t care about race; they care about preserving and growing their savings. The point is that with the growing black middle class, now easily equal in size to the other races combined, the beneficiaries of pension fund investments in SA are changing rapidly, as you would expect. 

For the EFF not to know any of this, and to put this benightedness in their manifesto, implies an astounding level of — there is no other way to say it — wilful ignorance. But it’s not just about banking that there are straight factual errors. In the land section — which you would imagine the EFF would pay the most attention to — the party says that after 1994, the government has cumulatively bought less than 7% of the targeted 30% of land meant for redistribution over the 30 years.

However, according to Wandile Sihlobo, academic and chief economist at the Agricultural Business Chamber of SA, the government is pretty close to the 30% target. The figure is somewhat assisted by the fact that large numbers of black farmers have independently bought self-financed farms. 

It should be noted that this doesn’t mean large-scale, commercial farming isn’t still dominated by white farmers; it is. But overall, there are numerically now many more black farmers than white farmers and ignoring the facts to justify calls for a large-scale farm nationalisation programme is not only economically dangerous but also transparently duplicitous. 

The nationalise-the-mines section was interesting because it’s such a confused and confusing mess. The manifesto says, “The EFF government will return the ownership of the mineral wealth of the country to the hands of all the people of South Africa by nationalising the mines by 2028.” Without compensation. Obvs. But then it says an EFF government will, in the run-up to the nationalisation process, “conduct a robust consultation process involving all existing stakeholders in the mining sector, including the current foreign and local owners, mineworkers, affected communities, and traditional leaders”. 

The EFF will then “propose various mechanisms to forge strategic partnerships and agreements with the above-mentioned stakeholders including public-private partnerships, long leases, employee ownership program[me]s, and other structures aimed at enhancing the capacity of the state to operate mining operations”. What? The mines will be nationalised but there will be “public-private partnerships”?!  

The section miraculously recognises that if you nationalise the mines, you simultaneously lose all your mining expertise. That’s going to be bad news for the state mining company which now owns all the mines. So for the state mining company to work, some accommodation will have to be reached with mine owners, otherwise the state mining company will be defunct from day one. 

Shoot me if you think this is idiotic, but by the EFF’s Grade 8 levels of economic understanding, this is actually a step forward. It’s sweet that they think the people whose property they have just stolen will happily sit down and sign a long lease, because, you know, the trust will be there. But at least the EFF is now conscious that mining requires some level of expertise. Baby steps, people, baby steps.

The manifesto also has a proscribed minimum wage for different segments, which, bizarrely, is specified down to the cent. For mineworkers, it’s set at R15,872.52c per month. Once again, on what planet, people? The average wage of an entry-level mine worker in the PGM sector is now R25,500 a month, a little less in the gold sector, and a little higher in the coal sector. Is the EFF really recommending miners’ salaries should get cut? Not specifically, but if you set a minimum wage like that, somebody is going to suffer. 

What intrigues me about all of this is where these idiotic economic ideas come from. How is it possible that the EFF’s economic platform can be so impervious to systems now widely accepted by almost every country on planet Earth, including countries with avowedly communist governments like China and Vietnam? Why has the light of modern economic history shone so dimly on the EFF’s economic moronism?

I think there are four reasons. 

1. History

SA’s economic conventional wisdom (if you can call it that) was set in the era of high socialism back in the 1950s, which was when the Freedom Charter was signed, and it doesn’t seem to have evolved very much since then. People who teach at the ANC’s political education camps, let alone those of the EFF, are imbued with ideas of class struggle and dialectical materialism that would immediately get you ridiculed in most academic institutions.

2. Education

SA’s school system is simply devoid of Economics 101, and university education is dominated by left-wing and quasi-left-wing academics. The wokeness of universities around the world is pretty intense, but in SA it’s overlaid with development economics, to the extent that SA graduates today are almost completely ill-equipped for modern commercial life — something the EFF manifesto, weirdly, recognises!

3. Racism

Nobody says it, but the EFF is a deeply racist party; all of its policies are designed very specifically to aid black South Africans only. So, you might say, this is not racism, this is post-apartheid rectification. But rectification is something different; it’s where everybody moves forward together toward a better outcome. What the EFF is proposing is the deliberate shifting of resources from one racial group to another. That’s what “without compensation” effectively means. I’m sorry but that’s racism (and la la la, kill the Boer, by the way), and the fact that the ANC doesn’t call out the EFF on this basis is revealing.  

4. Logic & romance

This is hard to say, but if you are appalled by the structural fissures in society, what conclusion are you meant to draw? For years, left-wing revolutionary parties have thrived in countries where inequality is most intense. Not always, but often. It just seems logical to people with nothing that taking the wealth of others is “fair”. And consequently, the idea of a collusive, exploitative group controlling the “system” is born. And people who fight “the system” are, ergo, righteous heroes.

So, what should SA do about all of this? The obvious answer is to do the opposite: upgrade education, improve equity, fight racism and crucially, improve the overall state of the economy so all ships rise. But isn’t that what SA has been trying to do since 1994?

Well … sort of. DM


Comments - Please in order to comment.

  • Mmapateng Moloko says:

    The problem is ownership. Black people does not have enough wealth to compete..

    • Penny Philip says:

      Ownership of what? The Black middle class in South Africa is by far the biggest & most wealthy economic group in the country.

    • Fanie Rajesh Ngabiso says:

      Some do – like Julius Malema for example.

      …that many these got their money at the expense of our poverty stricken African brothers is another story.

      For wealth to arrive for our people, we need to first stop corruption and introduce accountability for all.

      As soon this happens we will be able to build our nation and lasting wealth for all our peoples.

      The time is now.

  • Wilhelm Boshoff says:

    EFF’s Grade 8 levels of economic understanding. Indeed, but with only a 30% pass.

  • Beezy Bailey says:

    One is discouraged from writing in the echo chamber of DM readers and thus preaching to the converted [ I wonder what percentage of DM readers will be voting for the EFF ] but it is deeply disturbing to see the extent that Juju conjures hope among many who have nothing and thus nothing to loose . Put your X next to the EFF and you will have a comfortable 3 bedroom house, education for your kids, free medical care, jobs , free farms and more , magic! What those poor starry eyed supporters must understand is that the one promise Juju can deliver on is handing out many thousands of rand more in social benefits for the simple reason that , heaven forbid the day he came into power, the rand would crash to the value of the Zimbabwe dollar within hours .

  • Denise Smit says:

    But EFF cronies took money from their own black bank created by black people out of monthly savings of these people, and are still defending or trying to hide it.

  • Kevin Venter says:

    And all of the analysis means squat because the demographic of DM readers all know that Julius is a charlatan and likely already do not vote for the ANC.
    As for the voters who still blindly Votela ANC, even though the ANC have pillaged a nauseating amount of money and have done nothing but turn South Africa into a welfare state. Do you think they know that the information is incorrect and even if they did, do you think they care? Hell no, they are brainwashed into a false narrative about how their lives are as bad as they are because of the previous white run regime. They are unable to reason that South Africa has been under different rule for 29 years and yet nothing has changed for them except for getting a food parcel and a t-shirt once every 5 years.

  • Carel Schnetler says:

    The seriousness of this ultra-left marxist and stalinist politics is underestimated and played down. The EFF will not allow free elections once they come to power and will make Jacob Zuma‘s corruption look like child‘s play and the killing fields of the Kmer Rouge innocent.

  • Geoff Coles says:

    An excellent article Tim. I read the EFF Manifesto up to a point in PolWeb and you have 100% nailed it.

  • Beyond Fedup says:

    One is dealing with a highly odious and bullying individual and party that are nothing but ignorant, beyond stupid, vacuous, racist, full of vitriol and venom, who would set this country alight and take us back to the dark ages. Their heroes are Castro/Che Guevara, Chavez/Maduro, Mugabe/Mnangagwa etc. etc. All murderous and bestial psychopaths and miserable failures – they have all plunged their countries into a wasteland of extreme depravity, poverty and misery that continues to this very day. Under the guise of black transformation and everything it entails, it is just smoke and mirrors for wholesale thieving. Unfortunately the masses and youth of this country, in their desperation, are taken in by their populist lies and propaganda, and there is only 1 party to blame – the equally odious anc. They have stolen this country blind and broken/destroyed just about everything that they have laid their rapacious hands on. SA is in a very serious and dark plight – one can only pray and hope that there are enough voters who can see this reality and vote for anything but these two parties.

    • District Six says:

      Just pointing out that for someone who has said all this about another, “… full of vitriol and venom…” you have used quite a bit of the same yourself. There’s a log in someone’s eye, methinks.

  • Lawrence Jacobson says:

    The EFF is a party that enjoys the safety of not being in power. This means any threat cannot be carried out and the same, if not more so, can be said of any promise. Not running even the tiniest of tiny municipalities anywhere in South Africa means they can say what they want and are never going to be questioned as to why they have not delivered. Even some of the deliverable promises made have not come to fruition. I seem to remember something about building a school (or college) a few years ago. To the best of my knowledge, land hasn’t been identified and a brick hasn’t been bought. Mind you, a school is a lot more than land and bricks. Thinking of starting one is easier than actually building one.

    To the majority of South Africans’ credit, as much as the EFF is loved and enjoyed this love and enjoyment doesn’t translate into votes. They filled Moses Mabhida stadium, “cue genuine applause” but seldom seem to get more than 2 or 5% in KZN by-elections. This shows that us South Africans are not that easily fooled. We have been promised many things before.

    So let’s stop worrying so much about EFF manifestos and focus on what they get right. There strong message to people to register to vote is admirable. They gave away tampons at Moses Mabhida. Their Pan-Africanist message resonates with me and they were the first party to complain to government about the closing of the Fugard Theatre in Cape Town. There are others. I’m not saying ignore them. Just right-size their threat.

    • Alan Paterson says:

      December 2019. A free private school for poor and brilliant pupils for the residents of Alexandra, the best sporting facilities and staffed by the best teachers. It would be called the Winnie Mandela Combined School and that the EFF had already bought the land. I recall that at about the same time Malema was going to open EFF offices throughout Africa for a future pan-Africa with Swahili as common language. Unfortunately he can fool some of the people all of the time.

  • Michael Grosse says:

    If those who would vote for the EFF/ANC understood economics & had a world wide view of successful countries policies, it would help. Unfortunately even if their supporters are fed false information it is irrelevant. It is about manipulation & grabbing/maintaining power, about politics & self interest, not about the general prosperity of a country which will benefit all, especially the majority.
    We could go on but I don’t believe we are not reaching those who need to understand.

    • Tracy Smith says:

      Everybody has a vote, even stupid people, maybe we should institute a skill testing question in order to participate? That way the bar is raised and the manifesto has to make sense?

  • Ian Gwilt says:

    Not convinced how popular they actually are.
    No great shakes in recent by elections
    People will vote for them and i understand they offer (forlorn ) hope to those with no hope and no understanding of economics.
    See their rallies and the many young faces that see no future with the current ageing regime.
    But as an overall significant number, not sure, but what do I know.

    • Kenneth FAKUDE says:

      Sadly the inequality, poverty and dissapropiate ownership is there.
      The failure to address these issues in the current parliament sitting means any Tom,Dick or Harry (not referring to anyone in particular) can exploit the situation for gains.
      The risk of raising unrealistic hopes leads to frustration and violence.
      Its a good thing though if promises are followed through.
      Still to hear of a workable genius strategy.

  • Bob Dubery says:

    I don’t disagree, but it’s strange. The EFF have a lot of well educated people. OK… maybe not a lot of economists.

    From another perspective it’s not strange. Most political parties and especially their leaders show little sign of being schooled in or even caring about reality. Many of them are selling pie in the sky to voters, and they do that because they can. Mashaba, McKenzie, Malema don’t have any chance of coming to power and they know it. So they promise all sorts of things, knowing that they will never have to deliver. The most they can hope for is to be a member of a coalition, probably a minor member, and when coalitions form and everybody has to make some concessions so that they are not totally unpalatable to those they seek to partner with, then it’s easy to lay aside lurid election promises.

  • Johan Buys says:

    There are some other logic leaps in the part of the speech I listened to.

    The EFF will in-source things like cleaning, building, security, transport, etc that are done on tenders now. By doing this they will add 4 million jobs. That is scary. So the EFF would need 4m more insourced people to do the same job as what private company employees need at the moment???

  • Fernando Moreira says:

    Juluis is an incredible politician, albeit that his party are basically fascists,generally gets away with everything ,is treated with kid gloves by the the media and the authorities, runs rings around every other party …..says things that the ANC wish they could say ,and any other party.. especially the DA are rascists !
    Be afraid ……Vote DA !!

  • Beyond Fedup says:

    Moola, me thinks you obviously live in a parallel universe or are one of those blind individuals that either can’t or don’t want to see what the EFF is all about and how fatal they would be for this country.

  • Thug Nificent says:

    Why does a good lose value in modern economic theory when it becomes abundant?

  • Glyn Fogell says:

    Having just read the EFF manifesto in DM168, it makes me wonder what reality they are living in. If they follow Venezuela’s economic policies SA will be in an even worse hole than it is at present; 200% inflation there. Stop banks repossessing houses when50% of the bond has been paid? Magic – now I only have to pay half of what I owe; banks will be stricter with their lending criteria and more people will end up in court for debt, houses then sold by the Sherriff after a debt judgement, so it won’t be the banks as the bad guys, but the state. Hello, EFF?

    Governing at provincial level isn’t working in most of our provinces (with a very notable exception – guess where), so scrap provinces and make the problem bigger? It’s a bit like redistribution wealth actually being a redistribution of poverty.

    And free this, that and the other; who funds that? The tax payer, whose numbers are dwindling. Higher minimum wages? Small businesses may well fold, but an alternative is to raise prices as the owners have to make a living. In any event, a bigger wage bill without matching productivity will trigger inflation; Eco101.

    I shudder to think what this country with so much potential might look like under EFF rule. The rise of a multitude of smaller parties and independent candidates will only serve to fragment the opposition and make it harder to challenge the ANC. Smaller players will then be the king-makers. Turbulent times ahead.

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