The madness before the fall

RW Johnson says that faced by an existential crisis the ANC has retreated into the realm of fantasy

Ulysses Grant, who led the North to victory in the US Civil War, after serving two terms as President made a world tour. In Berlin he met the Iron Chancellor, Bismarck, who commiserated with Grant that the Civil War had been so terrible – in terms of casualties, the worst the world then had ever seen. “It had to be terrible”, Grant replied. “There had to be an end to slavery. We were fighting an enemy with whom we could not make peace. We had to destroy him. No treaty was possible – only destruction.”

In 1945 this example was cited by General Eisenhower, the Supreme Allied Commander. It was vital that no one was left in doubt that Nazi Germany had been absolutely defeated. The armistice which had ended the First World War had allowed Hitler to propagate the myth that Germany had only been beaten by a “stab in the back” by the Jews. This time there could be no place for such poisonous nonsense, nor for any nostalgia for the Hitler regime.

Grant and Eisenhower understood the power of their enemies' myths. In the South there was the romance of southern belles living in Romanesque mansions on vast plantations, being wooed by dashing young Confederate officers, the soul of southern honour. This myth, the glory of the South, was only possible thanks to the legions of slaves who worked the plantations and served the belles and their beaux. In Hitler's myth the East was to be resettled, once the Slavs and the Jews had been disposed of, by legions of young Aryan supermen, usually blonde SS officers, who would build the Thousand Year Reich. In the end those myths had to be completely extirpated in order to allow a new beginning.

Independent Africa has also seen numerous cases in which crazy ideas have led to dire results. Sekou Toure's dream of currency autonomy led Guinea to leave the Franc zone. This produced a worthless currency, hyperinflation and the forced emigration of over a million Guineans. Mugabe and Mnangagwa were equally deluded and produced the same results. Julius Nyerere's ujamaa policy involved the use of forced removals similar to those seen under apartheid, resulting in an economic and humanitarian disaster.

In Nigeria the careful regional balance bequeathed by the British was soon upset by a Northern power grab, producing an Eastern secession. These dreams of Muslim northern dominance and an independent Biafra produced a war in which millions died. In Ethiopia Mengistu's Stalinist socialism produced a genocide in which over two million died. In Rwanda crazed Hutu conspiracy theories provided the rationale for the Tutsi genocide in which at least 800,000 died. It is perhaps no accident that Rwanda and Ethiopia now have two of Africa's most successful governments. After what they have been through they are concerned mainly with what works.

All of which is by explanation of why it is so worrying that, faced by an existential crisis so severe that financial analysts are now quite openly predicting a failed South African state, our leaders are playing around with all manner of fantastical proposals. Some of the craziest come from Ramaphosa – the new “smart” city near Lenasia, bullet-trains linking our cities (this at a time when Prasa has collapsed and when theft and vandalism of rolling stock, cables and even stations is rampant), and NHI – a hugely expensive new health system way beyond the state's financial or operating capacity.

But we also have suicidal proposals for EWC. plans for a state bank, a state shipping line, a state pharmaceutical company, a sovereign wealth fund, a programme for the “green” refurbishing of thousands of government buildings, a basic income grant costing R197 billion a year, a special grant for women costing R140 billion a year, a special bank for taxi bosses and regular subsidies for the taxi industry (both the product of Fikile Mbablula's fevered mind), capital controls, prescribed assets, Modern Monetary Theory (ie. just print all the money we need) and, not least, the R2 trillion stimulus programme proposed by Cosatu.

Evaluating these proposals is pointless. None are as noxious as slavery or nazism but almost all of them require large amounts of new money and those who propose them have no idea where that is to come from. In fact, since the state is already so heavily in deficit, the money could only come from borrowing. Just imagine how that would work. The usual financial roadshow goes to London to suggest to foreign investors that they might like to lend further colossal sums to Pretoria at 8%-9%. The first question is “And what do you want that money for?” To which the reply is, “Well, we thought it would be nice to give it away – to women, taxi bosses or just to people in general.” To which the only possible answer is John McEnroe's famous retort to his tennis umpire: “You cannot be serious.”

For investors want to be sure of getting their money back, so they want to hear that you will use it for productive purposes which will help repay them. They know that just giving money away doesn't do that and they also know that South Africa is full of bankrupt SOEs, so why would you want to create more uncompetitive SOEs in banking, shipping and pharmaceuticals? And by the way, if you want to scare off foreign investors completely, just mention MMT, capital controls, prescribed assets or EWC. This is all obvious. Except, of course, to the ANC leaders who are clearly smoking something very powerful.

This plethora of crazy ideas in the face of the existential crisis of the state is a sign of the government's intellectual bankruptcy. The ANC has had 26 years in power, has run through the money and is now running through its remaining ideas. Almost none of them work. What this really ought to tell them is that the game is up. The government is way over-committed and lacks the means to carry out its existing roles, let alone all these new ones which it is madly keen to take on. The warnings in the market of a complete collapse of governance should be taken extremely seriously.

If the ANC was thinking straight it would realise that the only way for an ANC government to survive is for it shrink its role to the bare minimum – a small civil service, the police and the armed forces so the state just keeps order and protects the frontiers. Everything else – health, education, the railways, ports, airports and SOEs – will need to be privatized, wholly or in part. If the state keeps trying to do lots of things that it cannot do, it will collapse.

Indeed, it's already happening: SAA, SA Express and Denel are all collapsing as are the railways, many municipalities, the hospitals in the Eastern Cape, the water supply, the electricity supply etc. This process will accelerate as the full effects of the slowdown are felt. The very worst thing the government can do is to listen to Enoch Godongwana's Economic Transformation Committee and try actually to expand the role of the state.

The fact that Godongwana’s committee, which ought to know better, is giving precisely the wrong advice illustrates what is meant by intellectual bankruptcy. As we have seen, bad ideas in Africa often disappear only thanks to a bloodbath. There is no need for us to go through the fearful suffering wrought by a collapse of governance but if we are to avoid it the ANC needs to realise that such a collapse is not only possible but that we are heading straight towards it. And that Ramaphosa’s latest mantra - “building state capacity” - is just another pipedream.

R.W. Johnson

This article first appeared in Afrikaans in Rapport newspaper.