Economic horizons darken for ANC-ruled SA

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JOHANNESBURG — Trevor Ghavala has grown up in post-apartheid South Africa, and like nearly half his young adult contemporaries he is unemployed and has little chance of escaping a social underclass in which millions are trapped.

“I don’t have a job . . . I’ve never had a job. I’ve been asking people, doing crime,” said Ghavala (24) chewing on a piece of bread as he squatted with his back to a wall in a central street in Johannesburg’s Soweto township.

South Africa’s African National Congress (ANC), the anti-apartheid liberation movement turned ruling party, came to power in 1994 promising to help people like Ghavala.

But after 17 years running Africa’s biggest economy, critics say it has done more to enrich its leading members and allies than to help the poor masses.

Last weekend, it held a lavish birthday bash to celebrate its 100th anniversary with a golf tournament, banquets and concerts by the biggest stars in South African music while people like Ghavala struggle to eke out a living.

“I wish that Madiba was back,” Ghavala said, referring to the popular clan name of former president and anti-apartheid icon Nelson Mandela who, in a blaze of international goodwill, led South Africa into a new era of multi-racial democracy.

Mandela, elected president of the ANC after it was unbanned and he was freed from jail, led the country from 1994-1999. His departure from power was seen as an example to African leaders although the movement sees itself ruling for years to come.

It beat its nearest rival by more than 40 percentage points in elections last year, but analysts warn the party faces a defining moment in the next three years or so.

They say that if the ANC government keeps up its current policies, South Africa risks slipping to new depths of unemployment, debt and corruption that could swell the ranks of the destitute like Ghavala and undermine long-term prospects.

Critics say President Jacob Zuma, an ANC veteran and political backstreet brawler both before and since taking office in 2009, has been a virtual bystander when it comes to tackling the country’s deep social and economic problems.

“We are deeply concerned about the current trajectory. A rapid turnaround would be required in Zuma’s next term,” said Neren Rau, the chief executive of the South African Chamber of Commerce and Industry.

The ANC says it has made big strides in erasing the economic and social injustices caused by decades of oppression of the black majority by a white minority under apartheid.

The government says that when the ANC took over in 1994, 62% of households had access to clean water and about 50% had access to electricity. This has increased to nearly 95%and about 80%, it says.

Underpinning the economy is the most advanced infrastructure on the continent, the strongest banks and a well-developed rule of law and judicial system, making South Africa a stepping stone for investment in Africa’s quickly emerging states.

One constant that has kept the ANC government on the fiscal straight and narrow and reassured investors has been the National Treasury, led since 1994 by just two finance ministers highly praised for their fiscal discipline.

The World Economic Forum’s Global Competitiveness Survey ranks South Africa as top in the world for its regulation of its security exchanges, number two in the world behind Canada for the soundness of its banks.

It is also one of the easiest places for a firm to raise money by issuing shares.

But the same survey also said South Africa has some of the world’s most rigid labour laws, one of its least productive workforces and a broken school system that is staggeringly bad at educating its students, given the money spent on it.

At the end of 2012, Zuma faces a party leadership election. Despite a leadership style criticised as lacking vision and ineffectual, he is widely expected to garner enough support in the fractious party to win a second term as party chief and then stay on as national president until 2019.

Against this background, analysts do not expect him to rock the boat and upset left-leaning allies with pro-business reforms such as loosening the labour market and state economic controls.

“As it approaches almost two decades in power and demands for economic delivery grow more strident, the party’s ability to hold together in the same way will increasingly be put to the test,” Standard Chartered Africa analyst Razia Khan said in a research note.

Unemployment has been a chronic problem for the ANC and has also contributed to an alarmingly high murder rate, among the highest in the world outside a war zone.

About 40% of the adult population is jobless — a percentage expected to rise substantially in the coming years — and this is seen driving crime and widening economic inequality.