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HEADLINE NEWS
  • IEC expects to release election results by Sunday
  • The first result of the 2024 elections has been released from the Bizana Baptist Church in the Eastern Cape
  • With 20 voting districts declared, the ANC still tops the list of votes on the national ballot
  • Gauteng Police say 16 elections-related arrests have been made since the poll date proclamation
  • Counting of ballots continues, albeit slowly, as only 0.57% of Voting Districts have been declared (133 out of 23 293)
  • The majority of voting stations closed late last night due to long queues: IEC
Scrapping e-tolls: too late or perhaps not, to save ANC in Gauteng?

Scrapping e-tolls: too late or perhaps not, to save ANC in Gauteng?

Reading Time: 4 minutes

The public defiance of e-tolls and its scrapping serves as a reminder that public policy processes in a representative democracy are sacred. While elections give legitimacy to government, public engagement lends credibility to policymaking.

The abolition of e-tolls on April 11, 2024, may have come too late for the ruling party to reap significant political benefits.

However, even if this was to improve the ANC’s performance, motorists are still dealing with the nightmare of e-tolls and its related billing.

According to the South African National Roads Agency (SANRAL), road users will continue to be responsible for all outstanding e-toll invoices.

Gauteng accounted for a considerable chunk of the ANC’s national vote due to it boasting the largest number of registered voters, approximately 24%.

Some NGOs and opposition political parties believe that e-toll scrapping would not prevent the ANC from imploding in Gauteng, because people remember that the ANC imposed the e-toll system. People are aware that the ANC eventually gave in to pressure from political parties and civil organizations. The ANC-led government had to face the fact that the e-tolling system was steamrolled without reported regard for public input by the province’s residents.

The ANC’s provincial leadership was concerned after the party’s electoral fortunes declined by 10.45 percentage points from 64.04% in 2009 to 53.59% in 2014; and by 3.40-percentage points to 50.19% in the 2019 general elections.

The poor electoral performance collates with e-tolls forcefully enforced a year before the 2014 general election.

In 2018, the Gauteng ANC urged President Cyril Ramaphosa to drop e-tolls, but the national government dismissed the province’s request.

Going into the 2019 general elections, the provincial ANC was concerned that the party would be punished at the polls again, and that its followers would abandon it.

In 2019, it almost lost South Africa’s economic powerhouse.

According to StatsSA’s September 2023 provincial GDP data, Gauteng is the province with the biggest contribution to GDP growth. The province accounted for R33 of every R100 generated by the South African economy. Gauteng’s economy is larger than those of KwaZulu-Natal and the Western Cape combined. The second and third largest provincial economies are KwaZulu-Natal (15.9%) and the Western Cape (13.9%), respectively. Gauteng also has a large provincial budget, which amounts to R165.8 billion for 2024/25 and is likely to climb to R171.5 billion in 2025/26 and R176.8 billion in 2026/27, according to the provincial Treasury.

There is a widespread belief that if the ANC loses Gauteng, it will cement the eventual loss of the ANC’s grip on power, particularly economic power.

Poor public participation results in illegitimate policy decisions

E-tolling emerged as a result of the government’s reported dismissive attitude toward the need for good and reasonable policymaking, believing that citizens will simply accept and comply with irrational and frequently ineffective policies and processes.

E-tolling was launched in 2013 and met with immediate opposition from the public, who complained about a lack of engagement.

The gazetted e-toll scrapping serves as a crucial lesson for parties elected to government, emphasizing the importance of transparency, accountability, and good governance in policy decisions.

The defiance represents probably the first taxpayer revolt in democratic South Africa.

Effective public involvement requires complete transparency and easily accessible information to educate the public about the concerns and solutions. The e-tolls policy choice fell short of transparency. It follows that the majority of Gauteng people would have voted against the proposed e-toll, and it would never have been implemented.

When the governing party (ANC), aware of its majority, power, and control, decided to impose its e-tolls plans on Gauteng motorists, it received a stark reminder that representatives in a democracy are not rulers, and that the people ultimately govern through a vote and active citizenship.

VELEMSENI MTHIYANE IS WITH THE SABC NEWS & CURRENT AFFAIRS DIVISION

Elections and the fight to control the national purse

Elections and the fight to control the national purse

Reading Time: 4 minutes

National purse control is a less-discussed 2024 general election issue. The current fiscal year’s government spending budget is R2.37 trillion.

Naturally, political parties want to control the national and provincial budgets.

Public procurement accounts for 12% of GDP and almost R1 trillion annually.

Public procurement has great potential for economic transformation and inclusive growth. Political parties naturally want involvement in this enormous transaction.

Political control over Africa’s economic powerhouse

The International Monetary Fund (IMF) reported in April 2024 that South Africa’s economy has surpassed all others in Africa in terms of size.

South Africa is the largest economy in Africa, according to the International Monetary Fund’s study. Its GDP is $373 billion, which is more than R7 trillion.

Assuming all goes according to plan, South Africa will hold on until at least 2027. Consequently, the political parties vying for power in the next general election are well aware of the enormous influence that an electoral triumph would bring to the continent’s economic superpower.

South Africa accounts for 13.28% of Africa’s GDP, which was estimated by the International Monetary Fund (IMF) at $2.81 trillion in April 2024.

Fears of fiscal prudence going off the rails

Some radical conservatives believe a left-leaning party will abandon budgetary responsibility.

National Treasury’s 2023 Medium Term Budget Policy Statement (MTBPS) estimates debt service costs will reach more than R1 trillion over the next three years but the Economic Freedom Fighters’ (EFF) election platform contains many spending plans that ignore this reality.

Fiscal year 2023/24 debt service cost R382.2 billion.  The daily cost of debt servicing in South Africa is about R1 billion.

Every political party that wants to govern must be fiscally responsible and take fiscal policy seriously.

Some economists predict that government debt might reach 90% of GDP by the end of the decade and 80% within two years if spending cannot be controlled with revenue. The rising cost of debt will limit government service delivery.

The fears of the National Treasury under EFF leadership

The proposal that Floyd Shivhambu, of the Economic Freedom Fighters (EFF), may assume the position of Finance Minister in the event of a coalition between the EFF and the ANC has been heavily criticized by numerous center-right political groups, social critics, and economists.

Some are claiming this will create a “looting highway”. These concerns are followed by claims that the markets will be shocked and lead to the rand deprecation as well as negative rating by credit ratings agencies. There is a sentiment that if the ANC and the EFF form a coalition, that will lead to economic doomsday.

Sceptics of the ANC-EFF coalition are certain that the markets will react negatively should such a coalition take place.  The sceptics anticipate massive capital outflows as a result. In my opinion, the market’s key concerns appear to be certainty in fiscal policy, monetary policy, and the future direction of economic policy, rather than ideological allegiance.

Fiscal and Monetary Policy Direction

At the core of addressing the economic challenges faced by South Africa lies the capacity to formulate and execute efficacious economic policies that stimulate annual economic expansion equivalent to the 5% target set by the National Development Plan.

The EFF asserts that economic independence for the black majority can be attained via a state-directed industrialization program, the nationalization of mines, and the expropriation of land without compensation.

Critics of the EFF’s economic stance argue that the party’s conception of economic freedom is incongruous with the prevailing international definition of the term, which upholds principles such as respect for market dynamics, individual autonomy, and property rights.

Advocates of conservative neoliberal economics are concerned that under the EFF’s leadership of the National Treasury, fiscal prudence and consolidation will be disregarded, while state intervention will be intensified.

There are apprehensions that the EFF may engage in political intervention in the operations of the Reserve Bank, thereby obstructing monetary policy and precipitating a significant depreciation of the rand.

OPINION: Whoever wins May 29 vote faces job creation challenges

OPINION: Whoever wins May 29 vote faces job creation challenges

Reading Time: 4 minutes

Do political parties really have a job-creating plan?

As South Africa prepares for the highly anticipated 2024 general election, all political parties promise an immediate solution to the country’s economic problems, particularly unemployment. It is becoming increasingly common for political parties to use the phrase “job creation” as a campaign slogan in order to lure millions of jobless people to vote for their parties. Thus far, these parties have not shown any tangible plan or strategy outlining how they intend to achieve job development. There is no vault where jobs are kept, ready to be unlocked whenever the right political party takes office. Political parties need to dig deep into their economic policy research and find effective job creation strategies. Frankly speaking, the election manifestos of political parties do not provide a meaningful solution to unemployment.

Is the Western Cape the province that holds the secret to job creation?

Looking at the official opposition, the Democratic Alliance pledges to create two million jobs. The party’s leader, John Steenhuisen, is convinced that his party can replicate its success in the Western Cape on a national scale.  According to recent data, the Western Cape has the lowest unemployment rate in South Africa (20.3%). The DA-led province has a labour force of 3.4 million, with 2.7 million employed and only 702 000 unemployed. Over the previous 10 years, the Western Cape has been the only province to maintain an unemployment rate significantly lower than the national official unemployment rate. This creates a positive picture for employment creation; however, is this the consequence of DA policies?

Runaway unemployment and unkept jobs promises

Despite frequent pledges of jobs by the government, President Cyril Ramaphosa stated during his State of the Nation Address (SONA) in 2022 that the responsibility for creating jobs belonged to the private sector rather than the government. This appeared to be an attempt to abdicate the government’s responsibility for job creation. One may wonder what happened to the previous promises. President Ramaphosa unveiled a plan for economic recovery and reconstruction in October 2020.

At the time, the plan sought to create 3.4 million jobs over a ten year period by increasing the country’s economic growth to 3% each year. This was a divergence from the National Development Plan’s target of 5.4% economic growth. No other party has come close to making promises that are consistent with the NDP’s goals for lowering unemployment. The National Development Plan (NDP) aims to lower the unemployment rate from 27% in 2011 to 14% in 2020 and 6% in 2030.  To accomplish this, total employment needed to rise from 13 million to 24 million, or 11 million jobs, between 2012 and 2030. Currently. There are somewhat more than 16 million employed persons in the country.

Unemployment is persistently high

As we approach elections, a large number of young people have registered to vote in the expectation that the seventh administration of the democratic government will keep its promises regarding job creation. According to the Independent Electoral Commission, those aged 18 to 39 account for little more than 42% of the national voter roll. The official unemployment rate is at 32.1%, with 7.9 million people looking for work but unable to find it. It is disturbing to see the high rate of unemployment among young people. According to the country’s statistics agency, the crisis is causing havoc on young people aged 15-24 and 25-34, with unemployment rates of 59.4% and 39.0%, respectively.

Unemployment grew from 4.6 million in 2013 to 7.9 million in 2023, a 71.7% increase in the last decade. This indicates that official unemployment increased from 2 million to 7.9 million between 1995 and 2023, marking a staggering 295% increase in unemployed people. The reality is that the unemployment crisis predates the establishment of democracy and has been compounded by a stagnating economy that has expanded at a 0.8% annual rate since 2012.

So far, I have not heard any political party put out a sensible plan to stimulate the economy and achieve targeted growth rates. So, a monumental challenge exists for whichever party eventually wins on May 29; creating millions of jobs for a despondent population is no easy task.

Velemseni Mthiyane is a Specialist Researcher, Business & Economics