The politics - and economics - of patronage

John Kane-Berman says the ANC govt has created system where key constituencies are financially beholden to it

Amazing what the African National Congress (ANC) gets away with, and how brazenly too. On Thursday last week the National Treasury published a "people's guide" to the 2016 budget proclaiming that faster economic growth depended on "higher levels of confidence and investment within the private sector". On Tuesday last week the National Assembly passed an expropriation bill that will undermine both confidence and investment. The minister of public works, Thulas Nxesi, says the bill is needed to speed up land reform and acquire land for the state. 

Yet although the bill provides for expropriation without compensation in certain circumstances, business has been largely silent about it - no doubt for fear of upsetting the new-found toenadering between itself and the government. But perhaps business has not woken up to the fact that the bill threatens all forms of property rights, not just those of white farmers. 

Apart from giving the government the power to speed up land reform, the bill will extend the ANC's powers of patronage. The construction of a patronage machine with a long list of clients has been one of the organisation's key achievements since it came to power 22 years ago.

Among its clients are not only traditional leaders, but also the millions of people on land under their control. Between two and three million of these are subsistence farmers with little chance of acquiring title to their land. Their livelihoods, and those of their families, depend on the goodwill of traditional leaders. Beneficiaries of land reform in commercial farming areas no longer acquire title to the land, but may only lease it from the state. They too will be dependent on the goodwill of the government and ruling party.

The government says it plans to create between 200 000 and 300 000 new smallholder black farmers on leased land. Under the guise of land reform the ANC government is in fact taking more and more private land into state ownership and creating a new class of tenant farmers beholden to itself and trapped in poverty because they cannot own their land.

Other clients of official patronage are public servants, municipal officials, employees of 700 state-owned entities backed by R467 billion in government guarantees, organised labour, and urban households who often pay nothing for water and electricity. Yet others are more than nine million children in no-fee schools.

They may not vote, but their parents do. Recipients of social grants - nearly 17 million of them - are other beneficiaries of the state. Most recipients are children who have no vote, but their grants are paid to parents who do vote. Social grants also contribute half the income of people on communal land, so that such people are reliant not only on the goodwill of traditional leaders but also on that of the government.  

As for the middle class, their fealty is secured by affirmative action, preferential procurement, and black economic empowerment (BEE). Among other beneficiaries of the ANC's racial policies are lawyers, accounting firms, and banks who make millions out of putting together BEE deals.

Opposition parties in the municipal elections later this year will make as much capital as they can out of President Jacob Zuma's disastrous behaviour. The ANC will play the race card and bruit forth its liberation credentials. Hidden in the background, also weighing in its favour, will be its patronage network. In due course, however, the damage the ANC continues inflicting upon the economy will undermine its ability to finance its patronage.  

* John Kane-Berman is a policy fellow at the South African Institute of Race Relations, a think-tank promoting political and economic freedom.