Are New Year’s resolutions overrated?
Steeped traditionally in Western culture but effectively now globalised, it resembles more of a parlour pastime of do-gooding intentions and aspirational “good-for-you goals” of people for the year ahead.
The nascent year 2024 is no exception but for some 60 million South Africans it will be tempered by the little matter of a constitutional invitation to participate in a customary countrywide mass vote casting exercise most likely in May, intended to define and formalise the clamouring good intentions of the country’s political classes and aspirants, at least in policy pledges for the next five years.
When politicians dabble in resolutions and manifesto pledges, often bordering on outrageous election bribes especially through personal tax cuts and welfare handouts, ostensibly to enable safety nets to impact a wider section of society during uncertain economic times irrespective of whether the economy can ill afford them, then the voters have every right to be wary and suspicious.
After all, it is their taxpayer rands and the costly public debt and concomitant interest servicing that will have to pay for such electoral hubris which in fairness to the ANC is the bane of democratic politics the world over, of which the Western democracies are past masters.
The difference is that most developed countries are better placed than a medium-income developing country such as South Africa in servicing their public debt because of a better debt-to-revenue ratio driven by a wider tax base and more efficient collection architecture.
That 2024 will be dominated by the seventh General Election and its outcome since that iconic inaugural free democratic poll in 1994 which propelled the ANC headed by Madiba to power is not a moot point.
What is at stake is to what extent the 27million-strong electorate, clobbered by a cornucopia of catastrophic cost-of-living metrics over the last decade – daily power cuts, rising fuel and food prices, high unemployment especially among the youth, a burgeoning public debt and servicing burden, endemic corruption especially associated with public procurement and local government and the high crime rate, one of the highest rates of gender-based violence against women in the world, among others – have matured in civic and political culture?
Are they willing to be forgiving yet again of the ANC’s serious governance deficits since the elapse of Madiba’s highly redemptive and successful presidency for the sake of historic sentiment and emotive loyalty to the only non-racial ruling party they have known since liberation, or do they dare to contemplate alternative dispensations most likely in the form of some sort of a grand coalition, in which the ANC could still be the largest single party but with the contentious possibility of a partnership with either the opposition DA and others on the one hand, and with the extreme radical EFF on the other hand?
The mind boggles, for such are the potentially precarious and some would say perverse political possibilities for the Rainbow Nation, perhaps at its most fragile stage in its short democratic history, for which, like climate change, urgent adaptation, mitigation, sound finance, independent accountability and action are urgently required.
ANC fatigue among voters, especially the urban youth, is already evident with the party’s share of the popular vote in the November 2021 local election hitting a new low at 46.04% – the first time it dipped below the 50% figure – a downward trend first noticeable in the 2019 general election.
The question remains: Will Ramaphosa’s Generation Vulindlela continue to be swayed by the ANC’s “A Better Life for All” election promise?
How poignant that almost to the day it will be three decades since that historic vote in April 1994. For South Africa – both for the ruling ANC and the country’s still evolving political culture – GE 2024 could be historic in several other ways.
It will be an important stocktake of the record in office and therefore services and development delivery of a ruling party that has been in power since the collapse of apartheid. There is no hiding place – a purdah on apologia for public service and delivery failures.
High-profile elections and manifestos are inextricably linked to near-term economic, fiscal, monetary and market policies and sentiments.
As such, depending on the result, the economy, foreign direct investment inflows and draw-downs and other metrics will to a large extent be on a “hold” mode especially in the First Half of 2024 as investors adopt a “wait-and-see” approach and the composition of a new possibly minority-ANC led administration.
The elephant in the room will be the spectre of coalition politics should the ANC fail to achieve an absolute majority.
Coalition politics in a normal polity is a double-edged sword. In countries such as Italy, Israel and the Benelux countries it has been an unmitigated disaster. South Africa, given its history and diversity, needs strong democratic institutions as opposed to a fragmented electoral system.
Whatever mathematical calculations emerge, consensus building could be more challenging in a formula comprising erstwhile hated political foes.
Talk of a possible coalition between an ANC led by Deputy President Shipokosa Paulus Mashatile with the EFF is a point in consideration and fraught with the wrong optics, especially to institutional investors.
There is a misnomer about coalition politics in South Africa. It has been prevalent since Madiba’s first term, which comprised the ANC, the SACP, Cosatu and the rump National Party under FW de Klerk in that transition administration. Subsequent ANC governments have effectively been a coalition between the ANC, the SACP and Cosatu.
It will be business as usual to the run-up to GE 2024. In recent weeks, the Cabinet approved the Draft National State Enterprises Bill for tabling in Parliament to create a new state-owned holding company – the State Asset Management SOC Ltd –which will manage the finances of the nation’s various state-owned enterprises (SOEs) after the Department of Public Enterprises closes. Legislation to prevent state capture of government entities too is on the way.
Rising public debt and servicing remain the key challenge in 2024 irrespective of GE 2024.
In his 2023 MTBPS in November, Finance Minister Enoch Godongwana projected gross debt for the next three financial years to rise to R16 trillion –from R4.8 trillion in 2023/24 to R5.2 trillion in 2024-25 and over R6bn in 2025/26, stabilising at 77% of GDP by 2025/26.
Debt-service costs as a share of revenue will increase from 20.7% per cent in 2023/24 to 22.1% in 2026/27, which means debt interest servicing costs of R385.9bn in 2024 alone and cumulatively over the Medium-Term Economic Forecast of an estimated R1.3 trillion.
In November alone the National Treasury added R55.25bn ($2.94bn) to South Africa’s debt burden, of which $1.54bn (R29.2bn) are in forex loans. The Treasury’s riposte is that “these loans and bond/Sukuk issuances enable (us) to raise funding at very affordable rates which help to reduce the government public debt.”
It remains to be seen whether 2024 will witness a great reset in South African politics in the changing fortunes of the ANC, and in a newly maturing political culture perhaps nurtured by a knock-on feel-good factor thanks to our record-breaking Amabokoboko champions!
Parker is an economist and writer based in London