Dealing with inequality by radically changing our economic trajectory

A group of ANC supporters march after disrupting the handing over of title deeds by Housing and Human Settlements MMC Mandla Nkomo in Hammanskraal.Picture: Thobile Mathonsi/ANA

I would like to think that most of us agree that apartheid was a radical programme of social engineering that has successfully continued to manifest itself in terms of the levels of inequality in South Africa.

Those who argue that every malaise in South Africa is the African National Congress’ fault is ungrateful for the gains made since 1994. To untangle such a radical system of oppression will require a radical response. To belabor the point – apartheid was highly successful in its brutality which manifested itself in many forms – politically, socially and economically. 

Economic apartheid continues to stymie the potential of the majority of this country’s population. The poorest 20% of the South African population consume less than 3% of total expenditure, while the wealthiest 20% consume 65%.

According to the World Bank, “South Africa has made considerable strides toward improving the wellbeing of its citizens since its transition to democracy in the mid-1990s, but progress is slowing. Based on a poverty line of $1.90 per day at Purchasing Power Parity (PPP), poverty fell from 33.8% in 1996 to 16.9% by 2008. Factors driving this included social safety nets, real income growth, as well as decelerating inflationary pressure on households, the expansion of credit, and growth in formal housing. Yet progress has slowed in recent years due to structural challenges and weak global growth since the global financial crisis of 2008. Poverty was 16.6% in 2011, but World Bank estimates suggest poverty barely changed in 2016, dropping just marginally to an estimated 15.9%. High unemployment remains a key challenge: South Africa’s unemployment rate hit a 12-year high in 2016, at 27.3% in the third quarter. The unemployment rate is even higher among youths, close to 50%.”

The Bank has previously called South Africa one of the most unequal in the world in terms of wealth and wealth distribution. South Africa remains a dual economy with one of the highest inequality rates in the world, perpetuating both inequality and exclusion.

So why all the fuss with Radical Economic Transformation? It has to be the key to unlocking socio-economic imperatives. Why can’t the legacy of a radical system like apartheid not be tackled head-on with policies that seek to address socio-economic challenges which is one of the biggest hindrances to growth?

Is it the misconception that it would be unfavorable toward certain racial groups? How many poor white people are there in South Africa compared to poor black people? There is an oversensitivity to criticism when it comes to initiatives like Broad Based Black Economic Empowerment and of late, Radical Economic Transformation. 

Why are some so averse to seeing black people lifted out of poverty and why are they given so much heft? 

Systems and networks which thrived under apartheid has morphed into a smokescreen of respectability but whose influence is manifested in subtle and not so subtle anti-development (read anti-black) rhetoric and sentiment.

These powerful groups have fostered a narrative of a segment of the population under attack, that they are the victims and that we are another Zimbabwe waiting to happen. 

We need to look at the examples of China and Ethiopia (one party states) which has shown significant economic growth over the past decade in particular. They do not pander or cower when threatened by entrenched capital and have set socio-economic courses which have seen major improvements in the lives of their people. These are often labelled as undemocratic countries as they don’t have what Western dogma insists are the essence of free and democratic spaces.

There is an arrogance and a willful unwillingness in South Africa to deny the effects of apartheid or in some cases that its existence hasn’t created some of the issues we sit with today. What has existed as a concept or theory is Radical Economic Transformation.

It has its roots in the Freedom Charter which states that “The People Shall Share in the Country’s Wealth.” Romantic socialist notion it may be, but it is the antithesis of a society whose only goal is to consume more than their neighbor and who does not care that the people living next to them has nothing to eat or who doesn’t have a roof over their heads.

Redress has to happen. Inequalities need and must be narrowed. The legacy of a brutal system needs a radical solution. Radical Economic Transformation is not a construct to take anything away from anybody or to be a diversion for state capture, it is to uplift the poorest of the poor and hence, lift the economy out of its quagmire.  

Meokgo Matuba is the Secretary General of the ANC Women’s League