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Moeletsi Mbeki urges SA’s post-election government to cut its costs in half

Moeletsi Mbeki urges SA’s post-election government to cut its costs in half
Chris Makhaye
By Chris Makhaye
12 Mar 2024
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In the first part of his interview with Daily Maverick, Moeletsi Mbeki reflected on South Africa’s 30 years of democracy, detailing the ANC’s mistakes. We followed him as he engaged with a Durban audience and talked about stumbling blocks and solutions.

Government spending is unsustainable and could lead the country down the road to becoming a failed state, said analyst and businessman Moeletsi Mbeki during a presentation titled, “The SA doomsday clock is ticking: How close are we to Armageddon in 2024?” in Durban on Thursday, 7 March.

He was speaking to the KZN business community, academics, intellectuals and political party representatives. Daily Maverick spoke to him on the sidelines of the event.

Mbeki said research shows that more than 50% of South African households depend on state grants and other handouts for survival. The South African Social Security Agency says it is paying grants to over 26 million people – with most receiving permanent grants such as the child support grant and the Social Relief of Distress grant of R350 given to the unemployed. 

“The first challenge of the coming post-election government… if it is serious about developing the country, it must cut in half the cost of government. It must use the savings made to revive the country’s private construction industry. 

“This is the only industry that can absorb millions of skilled, semi-skilled and unskilled labour while at the same time building up the country,” he said.

Mbeki told those gathered that South Africa is continuing to fall back to 132 on the World Bank’s Human Capital Index, a measure of how countries mobilise their human capital. 

In Africa, SA is now ranked 13th, behind countries such as Namibia, Togo, Ghana and Zimbabwe. The highest-ranked country on the continent is Mauritius, at 58th.

The Mauritian model


The best African economic model, Mbeki reckons, is the small island nation of Mauritius.

“In Mauritius, there is a strong government and very strong and vocal opposition. Nobody is killed in Mauritius for opposing the government.

“Our authorities have got to go to Mauritius to learn how things are done… Mauritius is a multi-racial society that has the same history as South Africa. 

“As in South Africa, Mauritius has a history of slavery. In Mauritius, as in South Africa, slaves from Africa and indentured labourers from India were brought to work in the sugarcane farms owned by Europeans.

“Today, its economy is the highest performing in the continent, which is quite telling for a country that does not have any mineral wealth.”

Read more in Daily Maverick: The ANC’s five deadly sins – and what the future holds for SA beyond the 2024 elections

He said the average per capita income in Mauritius is significantly higher than in South Africa, and that Mauritius identified a niche in the world economy and capitalised on it.

In the 1970s it identified itself as a textile and clothing hub and used the special tariff system to get its products to Europe, the US and other countries – the same system the US used to design Agoa to help African countries to get their products to the US.

Mauritius uses its unique location, pristine beaches and warm weather to sell the country as a tourist mecca. 

The tourism and textile industries have transformed Mauritians of all backgrounds into a middle-income society, where the state, police and private sector operate freely and efficiently, said Mbeki.

Read more in Daily Maverick: SA still in early stages of democracy and needs stronger party opposition, says Moeletsi Mbeki

On land and landlessness


After his presentation, Mbeki was taken to task by participants in the audience for his view on land reform, with some contributors from the audience saying land dispossession was central to their dehumanisation and economic marginalisation, and that freedom would be incomplete unless black people were given back the land from which they were forcibly removed during colonialism and apartheid.

Speaking on 702 last week, Mbeki was adamant that white people didn’t “steal” the land, but rather had “conquered” it.

Mbeki said while the land reform programmes in the past 30 years left much to be desired, some of the populist policies expounded by certain political parties would bring nothing but chaos, threatening food production and the entire agricultural sector.

The Economic Freedom Fighters, for example, is advocating for expropriation without compensation and is encouraging its supporters to occupy empty land.

“Some of the parties live in a fantasy land … they have a romanticised thinking that black people would like to return to land as peasants to occupy and use the land to plant. 

“Most black [people] live in the cities and peri-urban areas. Even if they were to get land back, they wouldn’t know what to do with it because they don’t have the skills or the funds to farm,” he claimed. 

“Farming should be left to farmers who are able to farm and produce the food we eat. Very few black people would want to be farmers, anyway. Most of these people want jobs and economic opportunities in the cities where they live,” he said.

Read more in Daily Maverick: Crystal ball — weighing up threats, opportunities that face SA in critical 2024 elections

Mbeki said he has given himself time to read the election manifestos of some of the main parties who intend to contest the upcoming general elections.

“Unfortunately, there is no party that has policies that are standing out – that will be able to solve some of the country’s problems. 

“There is no party that will be able to solve the issues of grinding poverty, rampant corruption, high levels of crime and other pertinent issues. They all talk about these things, for sure, but they don’t have practical solutions,” he said. 

‘Red herring’


The Democratic Alliance recently celebrated when the Constitutional Court ordered the ANC to hand over records relating to its cadre deployment policy. However, Mbeki believes that this might be a pyrrhic victory.

“The DA is chasing a red herring called ANC cadre deployment. The real issue is that the ANC government has been creating a black middle class by taking resources from the job-creating productive side of the economy and using those resources to build up an unproductive, consumption-oriented and highly paid administrative, black middle class in the public sector.

“I think the real reason the DA is chasing after cadre deployment is it doesn’t want to attack the policy of the ANC of building a black middle class through affirmative action in the state.

“Instead of allowing the industry to use these resources – profits – to invest in production and machinery and create jobs, the ANC has taken these profits and created highly paid jobs in the state for this middle class, which is the most expensive in the world.

“It has used these profits to import expensive German cars, Scotch whiskies, Italian clothes, French perfumes, expensive equipment and other gadgets. So, we have a shrinking economy but a growing middle class,” he said.

China is South Africa’s largest trading partner, both overall and within BRICS. In 2022, China accounted for 9.4% of South Africa’s exports and 20.2% of its imports, according to the South African Revenue Service.

Mbeki said: “In China, unlike the ANC government, the Chinese Communist Party uses cadre deployment to great effect. The only difference is that in China – while the private sector can pay what it wants – in the public sector there are rules that the highest-paid worker in that organisation cannot be paid a salary that is more than 11 times that of the lowest-paid worker.”

He said the situation is vastly different in South Africa.

No to Codesa 2.0


Mbeki said those who want to establish another Convention for a Democratic South Africa (Codesa) to allow South African society to try to sort out the many challenges the country is facing are mistaken.

“Codesa had only one challenge and that was discussing the constitution of the country. Now, South Africa faces multitudes of problems such as high levels of poverty, high levels of unemployment due to the stagnant economy, organised crime, violent criminality and dysfunctional government, including the municipalities.

“Codesa was replaced by the National Assembly and provincial legislatures, who are supposed to grapple with these challenges. Another forum other than Parliament will not achieve anything. First of all, how will the participants of that forum be selected?” he asked. DM

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