Ramaphosa Now Has a Chance to Get SA Back on Track
This week's general elections in SA were the most contested and probably the most difficult to call ever. Coming 25 years after the 1994 elections that ushered in the transition from apartheid to democracy, the election may well be the one that graduates us from an incipient democracy to an established one. As democracy rolled out across Africa over the past six decades, its most obvious characteristic was the clear transition from oppressive colonial rule to liberated democratic societies, albeit with contrasting outcomes.
The true essence of a second transition has remained elusive to define. Incipient democracies have the duty of creating socio-political systems that cater to the diverse and often competing needs of a society previously denied equal access to opportunities.
Underpinning their success is establishing institutions to support the democratic project. As democracy's intersections with capitalism are unavoidable, such states need to actively intervene in enabling their economic potential because there is no "invisible hand" or market force that will unintentionally deliver economic prosperity.
This requires investments in political and economic institutions aimed at injecting the economic promise that would otherwise not materialise. As democracies evolve and become more established, the role of state institutions - political and economic - tends to gradually give way to private enterprise.
Business is able to lift the bar on economic performance and, if you subscribe to the theory of trickle-down effect, also the living standards of a society as a consequence of the technology and innovation it introduces, investment it ploughs in, tax incentives it receives, all the while playing the role of social stakeholder, taxpayer, and much-needed employer. When this occurs, know that the second transition from the incipient to the developed state is now in full effect.
The key enabler of this transition is the existence of robust and functional political economic institutions. For SA, so well endowed in economic resources and goodwill upon its first transition, the shift from incipient to developed democracy should have materialised within the initial 25-year period. Rather, by creating the political economic institutions and then systematically allowing them to be undermined, the government has delayed the country's ability to make this important transition.
Cyril Ramaphosa retains the presidency with what is likely to be a relatively weakened mandate, thanks to the previous administration's failure. Stagnant growth, corruption, broken institutions and a frayed social compact have dominated headlines and undermined the social franchise value of the vote.
The decline in the electoral fortunes of the governing party indicates a society that has long been unhappy with the government's policy paralysis, governance blunders and blatant malfeasance. This is an opportunity for Ramaphosa to pursue a legacy that focuses on re-establishing the institutions that are broken, and he has started well. Should he continue on this path, businesses will come to play their part.
Most important, though, Ramaphosa needs to placate the competing interests in his political world that have failed to exhibit any appreciation of the sheer scale of the reform project that faces him. As a politician first, Ramaphosa will know his own victory in the ANC presidential elections was marginal, and the perception of a weak performance in the election will only embolden those who believe his standing within his party pales in comparison to his stature in broader society and in business.
This is why the president needs to make peace with the fact that his true constituency is now the 58-million South Africans - the majority of whom have placed their trust in his leadership. He needs to champion their hopes and aspirations - everybody else comes second.
This article first appeared in the Business Times section of The Sunday Times on 12 May 2019