Business Maverick


After the Bell: Thirty years on — the SA economic ‘eras’ of apartheid versus post-apartheid

After the Bell: Thirty years on — the SA economic ‘eras’ of apartheid versus post-apartheid
South African bank notes in Johannesburg 17 January 2013. (Photo: Reuters / Siphiwe Sibeko)

It’s convenient to split both the post-apartheid era and the period of apartheid into economic eras; an era of growth followed by an era of economic decline. But it’s a bit more complicated than that.

Do people who live during a certain age necessarily think the age in which they live is the most dramatic of all? If you were a Roman citizen circa … let’s say 51 BC … Julius Caesar had just won the Gallic Wars, invaded Britain and built a bridge across the Rhine. There are political battles to come within the First Triumvirate and an assassination too. It was a time of huge political turmoil and enormous technological advances. Roads stretched across the European continent and wealth accumulated at a rapid pace. 

If you were a Roman citizen then, would you not have thought, “What a great moment to be alive!”? Presumably, if you were Spanish you would have been less enamoured. But even then, perhaps you would have appreciated the powerful character of the moment, even if it was one of military defeat. The great wheel of history was beginning to turn faster in the West and the East, with more vigour and meaning. 

We mark history with “turning points” and moments of great significance. From our perspective, there were times of great advance, times of great tragedy and times of great significance. We probably underestimate the times of consolidation and unfolding when “history” seemed less momentous. It’s difficult to see the twists of history as they happen, because every moment of the present seems important to those experiencing it. 

One of our worst traits is to confuse round numbers with historic significance. Important eras don’t always coincide conveniently with decades or centuries. Yet, as a mental exercise, let’s assume that we can divide the previous 30 years of democracy into two periods, as Business Leadership South Africa’s chief executive, Busi Mavuso, has done so interestingly

And perhaps we can extend that analogy to the apartheid era, as writer Andrew Kenny has set out very powerfully

Mavuso’s point is that there have been two distinct eras during the post-apartheid period: the first was marked by SA’s economic reintegration into the global economic system. Then, the economy and business “leapt forward”. By 2008, SA was regularly recording economic growth of above 5%, boasted an investment grade credit rating, had a sovereign debt:GDP ratio of 24% and an unemployment rate of just under 20%.

“Per capita GDP had leapt from $3,786 in 1994 to $6,356 and would go on to peak at $8,800 in 2011. This created a strong environment for business, which rapidly evolved.” But in the second “era”, all of this was unwound after “government-led extortion and corruption took hold”. Since the “peak” in 2008, South Africa has slid backwards on just about every one of these indicators.

“Debt:GDP is now about 75% and growing. We will not even manage economic growth of 1% this year and barely more than that next year. Unemployment is at 32% while GDP per capita has fallen to $6,130,” Mavuso points out.

Interesting analysis, but her main suggestion — or hope — is that we have turned the corner. The State Capture era has made clear what happens when bad leadership and bad policy coincide. And heading into the general election, this should be top of mind.

What about extending the examination further back? 

Kenny asks: How do the first 30 years of National Party rule during the apartheid era compare to the first 30 years of ANC rule during the democratic era? There are some interesting similarities, including that the first portions of both were marked by economic advances. 

The leaders of the initial apartheid period tried to justify their mad ideology of grand apartheid, which saw people driven off their ancestral lands by men wielding guns and whips and driving bulldozers, and dumped into a bizarre archipelago of Bantustans, or homelands. There was petty apartheid, too, “which might have had an even greater effect on disrupting people’s lives and humiliating them”.

I disagree but, anyway, it is true as Kenny says that apartheid converted the free-spirited Boers of the Great Trek and the South African War into “spiteful little bureaucrats”, flashing their torches into a car parked at the side of the road to check whether the copulating couple inside were of the same race.

But at another level, the Nats were developing the South African economy “with daring, enterprise and skill. They had huge economic successes.” They promoted industrialisation, built roads, railways and waterworks, constructed the world’s biggest coal power stations, giving South Africa a plentiful supply of the world’s cheapest electricity, and pioneered a massive advance in coal-to-liquid fuel technology with their Sasol plants. 

“The economy grew over 6% under [Hendrik] Verwoerd. South Africa became by far the most powerful economy in Africa,” Kenny writes.

Apartheid and ANC rule

How do 30 years of apartheid compare to 30 years of ANC rule? “They have similarities. Both began by being obsessed with race; the ANC still is. Both loved state control and bureaucracy; the ANC still does,” according to Kenny.

One important difference, Kenny says, is that Afrikaners went to great pains to develop good education — in Afrikaans — for working-class Afrikaners. 

“The ANC leaders dump working-class black children into ghastly state schools producing some of the lowest literacy rates and scores for maths and science on the planet, while sending their own children to posh private or semi-private schools teaching in English. The Afrikaner leaders were always sympathetic towards working-class Afrikaners; the ANC elite regards the black working classes with contempt.”

My perspective is slightly different, but both articles are interesting and worth reading. It’s convenient to split both the post-apartheid era and the period of grand apartheid into economic eras; an era of growth followed by an era of economic decline. But it’s a bit more complicated than that. 

The era of grand South African economic growth was in the 1950s, which arguably had nothing to do with local politics but coincided with the global bounce-back after World War 2. What the Nats managed to do was take this international gift and gradually grind it down into almost nothing. There were sporadic bursts, though, like in 1980, when the gold price exploded and SA’s growth rate hit 6.1%.  

Likewise, in the early post-apartheid era: people forget that there was a global emerging market crisis in 1998 and a banking crisis in 2001 and in both cases, SA’s nominal GDP growth was hit badly. But it is true that on average, the SA economy benefited from its reintegration into the global economy, and that its average growth rate flattened after 2008. 

It’s more a case of a moribund economy rather than an actively declining one and, in this sense, the moment is different from late apartheid, when the economy was on the decline and the economic mood was dire. 

It’s important to remember too that during both periods overall wealth increased. And here is another similarity: in both cases, the elites have benefited the most.   

The most important thing is to resist the impulse to make glib assumptions and easy comparisons, however tempting they may be. The communications theorist Marshall McLuhan wrote that we drive into the future using only our rear-view mirrors. Football coach Dan Quinn extended this idea, saying the longer we keep looking back in the rear-view mirror, the more it takes away from everything that’s moving forward. 

Clearly, he was trying to get past a bad season, as SA should too. It’s not about the last 30 years; it’s about the next 30 years. DM


Comments - Please in order to comment.

  • ST ST says:

    I agree…it’s complicated, infact complex. You can examine a scenario independently and come to a reasonable logical conclusion. When you put them together, it’s no longer black and white. Any outcome (good or bad) in life human, business, nature etc is defined and shaped by what happened before, they say necessity is the mother of all inventions, hurt people hurt others etc

    It’s how the transition period was handled. Given that the transition was to be handled by largely inexperienced & unqualified people,..welll. But I agree, we’re here now, let’s find a way forward. Let’s just not pretend that the regime before didn’t set SA up for failure. Yes they industrialised SA, but caused a lot of pain in the process. The regime was never going to last. People rebuke eventually. With not making sure all citizens were productive to their full potential, SA was always going to be limited even with apartheid still in place.

  • Andre Stols Stols says:

    i do not agree with all that the previous regime did. having said that, all i know is that the ANC can only break down everything i.e no roads, no electricity, no sewer plants, no railways, no airways, no water pipes and little water- the list can go on and on…….
    The ANC is useless to mankind and must go at the next election.

  • Johan Greyling says:

    Like I always say, very little difference between the African National Party and the “Arikaner Nationale Kongress”. Let’s hope that for once the voters will vote for the moderates that can look after everybody including the poor and not just after themselves.

    • Kenneth FAKUDE says:

      Johan you are making the most sense here, even without corruption the ANC could have lost by trying to redress the imbalances of the past alone.
      The group who ran the interim government prior to 1994 should have been tasked with doing that whilst the ANC took the reigns in 1994.
      It is a well inclusive coalition that will take this country forward.

  • Wilhelm Boshoff says:

    I am not sure that we are not still in a race to the bottom. At best we are at the bottom of the bathtub curve with quite a lot of politics and thieving to continue. Perhaps in the distant future the stars may align, but … One can but dream and work hard to make it possble.

  • Rae Earl says:

    Andrew Kenny is 100% right in his comparison between Afrikaners looking after their own and the black elite doing the exact opposite. Sure apartheid was abominable and caused huge regression in the country’s evolution from an emerging first-world potential with nuclear capabilities down to becoming an international outcast. If the DA won outright on 29th May what would happen? In a nutshell, an immediate end to the chronic ills of BBB-EE, a return to the Normal College method for training teachers, a lifting of the standard of education by reverting to a 50% pass mark in line with international norms. The strangulation of ridiculous bureaucratic rules on SME’s would be eliminated and foreign direct investment doors would be opened to attract business and employment. SOE’s would revert to their previous systems of employing qualified personnel and being allowed to operate without political interference. Cadre deployment would be replaced by meritocracy and the SAPS would be overhauled and the stupidity of applying military posts and jargon would be scrapped in favour of standard law keeping norms. There are many other possibilities but just these few would cancel out the dreadful damage done by the ANC in the last 15 years and prosperity would return.

  • Noel Soyizwaphi says:

    It’s not about the past 30 years, but it’s the next 30 years we should be more concerned about. Tim Cohen, you have concluded your article with a positive and very powerful statement which I took it to be your prayer for this beautiful country. I really enjoyed reading your article. I couldn’t box it, thank you.
    I also agree with Busisiwe Mavuso’s analysis, simply because I’ve been alive during the two eras she’s trying to make us understand. I have not much to say though about 30 from beginning the apartheid system. However, going back to Tim Cohen’s encouraging concluding statement, I want to assert that South Africa will only ever step into a positive and fulfilling next 30 years when everyone who lives in it has the same understanding about the effects the apartheid system had in every sphere of life, black and white. Once we all arrive to that understanding, its only then will we be able to take collective conscious decisions to transform our society. It is only when we get to that point that we can see the need to transform. At that point we will know what sacrifices are needed in order to transform this country. We will all be of the same understanding that transformation takes sacrifices. With regards to the May 29th, don’t hold your breathe, because the date will come and go, leaving us more divided that before or just as we are now. My wish though is that May 29th leaves us with a government of national unity. That will be a quantum leap into the next 30 years.

  • Noel Soyizwaphi says:

    Nobody should be embarrassed that apartheid existed, as we cannot change history. What’s important is never to underestimate its effects. I dont want you to tell me you know about it, you must know yourself and don’t be superficial about it. The next thing you must know is that transformation takes sacrifices. Transformation is never sweet.

  • Noel Soyizwaphi says:

    It is the game of Crazy 8s: In 2005 Mbeki fires Zuma from cabinet on corruption related allegations. Under pressure from alliance partners, Motlhante throws him a life line and asked not to resign from party deputy presidency. In 2007, the alliance of Mantashe, Nzimande, Malema, Vavi, sees Zuma as the best thing since sliced bread, tell the world they are prepared to kill and elevate him and Motlhante the highest offices in the land. Soon thereafter, Motlhante sees Zuma exactly for what he is and challenges him at the next party electoral conference in 2012, he loses against the perpetual victim, Zuma and Ramaphosa is brought in from business as his deputy. Zuma now in his second term, shows everyone, in and outside the party, his true colours. Ramaphosa’s first assignment is to fire Malema and Vavi, then he falls into deep sleep in the midst of all Zuma’s shenanigans only to wake up and realize 9 years have actyally been wasted. During this 9 years, Malema, Nzimande and Vavi offer their sincere apologies to Mbeki and all go out for Zuma’s blood and they get it. Can Ramaphosa afford to close his eyes now, I wouldn’t

    • Johann Olivier says:

      A critical thing that is overlooked about the ‘greatness’ of life in the Apartheid years is that the Nats had to keep only 4 million folks happy – the voters. These were the people that had ‘all the amazing benefits’ of those great stats. In effect, the Nats received the incredible, almost free, input of indentured labour. It would’ve been far more challenging to have achieved their excellent numbers had they had to improve the lot of all. At least initially. The end result, I believe, would’ve been incredible. Sadly, we’ll never know.

      • Noel Soyizwaphi says:

        Totally agree with you on everything Johan. I may also add that it is a reasonable expectation that the 4 million odd folks who benefited would take some responsibility for the transformation of this country, but of vitally importance is for everyone never to underestimate the effects of the apartheid system, not just to those it was meant to disadvantaged, but to life generally.

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