JOHN ENDRES: An ANC-EFF future would wreak (even greater) havoc on economy - Business Day

John Endres

A plausible post-2024 scenario for SA sees the ANC failing to secure a majority in the national election and entering a coalition with the EFF to form a government. 

What programme of government should we expect from such an ANC-EFF administration, and what would the outcomes be for the country? 

ANC and EFF policies are more closely aligned than you might think. The EFF’s “seven non-negotiable pillars” include the expropriation of land without compensation, an enormous expansion of government, free education, healthcare, housing and sanitation, and huge protected industrial development. All of these will sound familiar to any ANC voter or apparatchik. 

The EFF also shares the ANC’s predilection for state-owned enterprises (SOEs). In its founding manifesto it proposed creating SOEs in banking, mining, housing construction, road construction, cement, pharmaceuticals and food stocking (to “regulate prices of basic foodstuffs”). Several of those have already been mooted by the ANC. The EFF also shares the ANC’s desire to nationalise the Reserve Bank and maintain foreign exchange controls. 

In all these areas the ANC and EFF should be able to co-operate quite comfortably, with the EFF taking the lead in pushing policies more aggressively and quickly, and perhaps dragging a disoriented and enervated ANC along with it.

Despite being the junior partner the EFF could well succeed in getting its way thanks to its forcefulness and ruthlessness. As such, it could probably also persuade the ANC to endorse some of its more radical goals, such as nationalising “mines, banks and other strategic sectors of the economy, without compensation”. 

If implemented, the overall programme of action would lead to capital flight, disinvestment and substantial fiscal deficits. These would be hard to close through borrowing because the creditworthiness of the new administration would plummet. An ANC-EFF government would not be able to maintain the EFF’s stated, but doubtful, commitment to “monetary and fiscal stability” for long.

Much as the Venezuelan and Zimbabwean governments did, it would seek salvation in a dramatic expansion of the money supply. The consequences of freely printing money are predictable: hyperinflation and the collapse of the currency. As an aside, the EFF believes a government following its precepts would encounter no shortage of money, since it assumes the SOEs will work efficiently and the state will control mineral, economic and agricultural resources sufficient to ensure the government is well funded. This belief is deeply mistaken. 

Faced with economic collapse and animated by revolutionary zeal, the ANC-EFF government would implement an ideologically driven programme of state capture. It would restrict media freedom, intimidate journalists and be tempted to create an “undesirable organisations” law targeting NGOs, modelled on the Russian precedent. It would nationalise private healthcare to force the middle class out, and would bring the already shaky judiciary fully under its control. It would capture the law enforcement agencies and the independent Chapter 9 institutions, paying close attention to the Electoral Commission. 

As it neared elections it would restrict the activities of political parties, harass and imprison opposition politicians, and — if necessary — unleash a state-sponsored terror campaign against protesters, dissidents and the poor. Again, countries such as Venezuela and Zimbabwe provide plentiful inspiration. 

In keeping with its character as a “radical, leftist, anti-capitalist and anti-imperialist movement with an internationalist outlook” — as positioned in the EFF’s founding manifesto — it would turn against the West and offer SA as a base of operations to allies such as Russia, China and Iran to threaten the West, which would respond with impotent huff-puffery. 

Attentive observers will notice that much of what I describe above has already been set in motion. Who can stop it? The answer lies with a well-resourced civil society that is strategically positioned to halt, or at least delay, the assault on SA’s economy, institutions and democratic fabric.

The method of pushing back includes numerous avenues, ranging from legal action and abundant media advocacy to direct support to poor communities, global advocacy and much more. The goal must be to ensure we get to another free election, when people horrified at their dwindling prospects under an ANC-EFF administration will vote for better opposition. The Institute of Race Relations is planning to convene meetings of civil society leaders to develop a strategy to counter the threats set out in this article. 

The time to act is today. South Africans cannot be complacent and rely on things to somehow work out, or on foreign governments to save them. They have to be prepared for an outcome like that described above and draft advance response plans, in case it becomes a reality.

Hopefully we won’t need them. But it would be deeply irresponsible not to develop a co-ordinated and well-resourced strategy now. 

Endres is CEO of the SA Institute of Race Relations. 

https://www.businesslive.co.za/bd/opinion/2023-05-29-john-endres-an-anc-eff-future-would-wreak-even-greater-havoc-on-economy/