South African cities see rising poverty and unemployment; Cape Town bucks trend

English audio clip attached.

The South African Cities Network’s report on the State of South African Cities in 2021 has demonstrated in clear terms that South Africa’s local government’s are in dire straits, with “unacceptably high” unemployment figures in many metros. However, the City of Cape Town has bucked the trend, and leads the way in several key indicators.

The report, which is published annually, found that Cape Town had the highest life expectancy of South Africa’s cities, with woman living to 71 and men to 65.6 on average. Cape Town also claims the country’s lowest metropolitan unemployment rate, and contributes R287 billion to the national economy. Additionally, the city has a high level of service delivery, with electricity delivered to 98.6% of households, basic water supply to 95.9%, and municipal refuse removal to 89.7%. This is in stark contrast to several other metropolitan districts, with Nelson Mandela Bay claiming the country’s highest unemployment figure – an astonishing 35.7%.

These results come soon after the release of the Auditor General’s municipal audit outcomes for the 2020/2021 financial year, which found that only 41 municipalities in South Africa had received clean audits, with more than half of these being found in the DA-led Western Cape.

Reacting to the report, DA Western Cape Spokesperson on Local Government Derrick America said: “It is heartbreaking to see our country’s municipalities and cities succumbing to a continuous tide of corruption and maladministration. While it is heartening to note that the DA has managed to turn things around in the Western Cape, we are fast approaching a point at which many localities will be unable to render even the most basic of services to their residents. While there is always room for improvement, I urge leaders throughout the country to look to the Western Cape’s example of clean, citizen-orientated governance before it is too late.”

DA welcomes progress on Rooiwal forensic investigation

Please find attached soundbites in English and Afrikaans by Cilliers Brink MP, DA Shadow Minister of Cooperative Governance and Traditional Affairs.

The Democratic Alliance (DA) welcomes the progress that has been made by the Tshwane coalition government in investigating the Rooiwal matter.

Earlier this year Mayor Randall Williams ordered a forensic investigation into the first phase of project to refurbish this waste water treatment plant.

Mayor Williams’ decision was a response to findings by the Auditor-General into the appointment of the contractor on the project.

The investigation is now underway, and Mayor Williams will today ask the municipal council to give forensic investigates six weeks to complete their work.

It is essential that this investigation be completed, and that no further time is wasted in ensuring that the long-standing problems at Rooiwal be resolved.

If any improprieties were committed in the awarding of the Rooiwal contract, this investigation is what will unearth the necessary evidence.

We welcome the example of openness and accountability set by Tshwane and Mayor Williams.

An era of clean, capable government is on the horizon

If you’re feeling hopeless about South Africa’s future, here’s some good news showing that the DA is a proven alternative for South African voters, and we are fighting hard for a real new dawn.

Clean government

Last week, Auditor-General Tsakani Maluleke released the annual municipal audit outcomes. She reported that 73% of municipalities in DA-run Western Cape received clean audits (22 out of 30), while the eight ANC-run provinces averaged just 8% (19 out of 227). DA-run Midvaal in Gauteng received its eighth consecutive clean audit.

Practically, a clean audit means public money is spent on the public, so things work, so people feel confident to invest in the future, so jobs are created.

Yesterday, StatsSA released the 2021 General Household Survey confirming that DA-run Western Cape scores highest on almost all service delivery metrics:

  • 99.4% of households having access to piped or tap water
  • Less than 4.9% of households reporting water interruptions (the national average is 30.8%)
  • 94.5% of households with access to improved sanitation in the country
  • 94.8% of households of households with access to flush toilets
  • the WC having the highest proportion of households that get refuse removal at least once a week
  • 95.1% of households connected to the mains electricity supply
  • the WC having the highest proportion of children in pre-school and grade R
  • 71.2% of WC households deriving their income from salaries (the highest in the country – speaks to the relatively high number of people employed in the province compared to other provinces)

Where things work, people work. So it is no coincidence that the unemployment rate (including those who’ve given up looking for work) is 16.5 percentage points lower in DA-run Western Cape (29%) than the average for South Africa (45.5%), according to StatsSA’s QLFS 2022Q1.

Clean government translates into jobs and a higher quality of life. Where the DA governs, life is far more likely to be easier and get better.

Pro-poor government

The DA-run Western Cape also comes out tops by far on delivery to indigent households, being  households that qualify and are registered for poverty relief in the form of a basket of free basic services. According to StatsSA’s Non-Financial Census of Municipalities 2019:

  • Overall service delivery to indigent households is 96.8% for Western Cape against a national average of 53.1%
  • Water: 97.4% compared to SA average of 74.4%
  • Electricity: 97.9% compared to SA average of 63.2%
  • Solid waste management: 96.6% compared with SA average of 68.8%

Capable government

The DA difference springs from merit-based public appointments. Ability to serve the public is the sole criterion that DA governments use for selecting public officials. This tends to build a clean, capable state that delivers to all.

By contrast, the ANC’s policy of deploying politically loyal cadres systemically destroys the public service, producing a corrupt, incapable, captured state that enriches those in the ANC’s patronage network at the expense of the rest.

I cannot emphasize this enough: the difference between merit-based appointment versus cadre deployment is between keeping the taps running during the Cape Town drought and the taps running dry during the NMB drought; between safe roads in good condition and dangerous potholed roads; between keeping the lights on and being regularly load-shed; between affordable rail transport and a collapsed rail system; between having a job and being unemployed.

This week, the DA released a mini documentary showing how ANC cadre deployment is the root cause of corruption and state capture.

DA vindicated

Also this week, the DA’s decades-long fight against cadre deployment was fully vindicated when Chief Justice Zondo released the final instalment of his State Capture Report, confirming that cadre deployment was the mechanism whereby ANC cronies captured the state.

The report states: “it is unlawful and unconstitutional for a President of this country or any other government official to take into account recommendations of the ANC Deployment Committee.”

The Zondo Report personally implicates President Ramaphosa as being deeply complicit in state capture. “It must be noted that President Ramaphosa was the Chairperson of the Deployment Committee for a period of five years, between December 2012 and December 2017, and that many of these appointments (and indeed the worst excess of State Capture) occurred during this period.”

DA action

The DA has fought cadre deployment relentlessly. By exposing it at every opportunity, by making critical submissions to the Zondo Commission, through our End Cadre Deployment Bill in parliament, and through our ongoing court challenge to outlaw this destructive policy, we are rewriting the history of South Africa.

We are also pursuing every avenue to hold President Ramaphosa to account for his alleged actions in the 2020 theft at his Phala Phala game farm and for the central role he played in state capture. We do so to uphold the principle of equality before the law and to defend South Africa. The entire ANC, from the head down, is a criminal syndicate that must go.

Conclusion

With ANC support having fallen below 50% in 2021, the era of extractive, incompetent, corrupt government is drawing to a close. The DA has shown South Africa that we have what it takes to build an honest, skilled state that delivers to all the people of South Africa. Progress is faster where we govern outright, but we have shown we can manage complex coalitions that make steady, if slower progress. A real new dawn is on the horizon.

Declare a state of disaster now to save NMB from Day Zero

Please find attached soundbites in English and Afrikaans by Cilliers Brink, MP.

The DA is calling on the Eastern Cape government to declare a provincial state of disaster specifically for the drought-stricken Nelson Mandela Bay.

Day Zero will hit Nelson Mandela Bay within a matter of days and this will leave 40% of the city’s residents without water.

It is unthinkable that the provincial government has not seen the urgency of declaring a drought disaster in the Eastern Cape, specifically as Nelson Mandela Bay is set to become the first metropolitan municipality in the world to run out of water.

We believe a state of disaster will create the sense of urgency needed to deal with the situation. This will also enable the metro to ask for the urgent assistance of the South African National Defense Force (SANDF) in respect of ensuring public safety at communal taps, to help with logistics at these water collection points, and possible water rationing.

I will be writing to the provincial MEC for Cooperative Governance and Traditional Affairs (CoGTA), Xolile Nqatha, imploring him to declare a provincial drought disaster with all urgency. I will also copy the national minister of CoGTA, Nkosazana Dlamini-Zuma, in this communication. If the provincial government is unwilling to act, national government must take charge and declare a state of disaster.

A state of disaster declaration will also unlock other government resources that can be used to mitigate the impact of the water crisis.

I have been informed that by the end of this month the KwaNobuhle pump station will be fully upgraded and will have the functionality to draw water from the Nooitgedacht Low-Level Scheme, that can be integrated into the water reticulation system.

That will be crucial in order to partly prevent the southern and western parts of the city from running out of water. We need further commitment from the metro’s political leadership that they are willing to complete all projects that will integrate Nelson Mandela Bay’s water reticulation in a bid to give all communities fair access to water.

Today, 22 June 2022, I conducted an oversight inspection at a site in St George’s Park in Nelson Mandela Bay where four boreholes have been sunk. (see pictures here, here and here)

Boreholes have also been drilled across the metro, but due to delays with the construction of filtration plants and booster pumps, these water sources have not been integrated into the reticulation system.

There is no time to waste and plans must now be made in regards to how the metro can make use of this water immediately. There are safety issues regarding unpurified water, but once a state of disaster is declared, we can draw from the knowledge of experts on how the usage of this water can be expedited.

The ANC-led coalition government has proved incapable of dealing with this crisis.

The DA will do all it can to assist residents during this unprecedented drought, drawing from the best practice that our governments have already shown in drought disaster management.

NMB Day Zero is almost upon us: Letter from DA Leader, John Steenhuisen

Dear Nelson Mandela Bay Resident,

The day we have all feared has arrived.

Nelson Mandela Bay (NMB) is South Africa’s first major city to run out of water, leaving hundreds of thousands of residents high and dry. It is a terrifying fact that 40% of NMB will soon be without water while some parts of the city have already started to run dry.

What is most infuriating about this situation is that it could have been avoided almost entirely or, at the very least, we could have pushed Day Zero out by months. There are some who will have you believe that this is strictly a drought issue. While there is indeed a pervasive drought in the region, the reality is that we have run out of water due to mismanagement, incompetence and greed. The defunding of critical projects, the lack of skills, political disruption, poor communication, failure to rapidly repair leaks… and the list goes on.

On taking office in 2016, the Democratic Alliance (DA) immediately implemented water restrictions. In so doing, within a couple of months we brought water consumption down from 300 megalitres to 250 megalitres per day. A drought mitigation plan was drafted, funding was secured, and a contractor appointed to implement this plan. In the 2018/19 financial year, while the DA-led coalition was in government, we secured R750 million in long-term loan funding of which most was earmarked for water infrastructure projects. This funding was to be used to expedite the integration of the City’s water infrastructure with the Nooitgedacht Low-Level Scheme – this project has now been abandoned by the ANC.

The DA had a plan and that plan was on track to deliver water security for all of the residents of NMB. When the DA was unceremoniously removed from government in 2018 these projects ground to a halt and, at best, to a slow trickle.

When the ANC coalition of corruption took over in 2018, many of these drought mitigation projects were put on hold or were simply not implemented by the ANC government. Funding was redirected to projects where money could be easily stolen, and the rest is history. The ongoing mismanagement, political interference and disruption to funding of critical projects is what has brought us to where we are today.

When we returned to government in NMB at the end of 2020 the DA and our coalition partners immediately embarked on reviving these projects and allocating additional funding to ensure water security. Sadly we did not get back into government after the 2021 local government elections and little to nothing has happened since then under the ANC and their coalition partners.

Throughout all of this, the DA has not sat back and watched from the side lines. We have worked hard to create awareness and offer solutions through council, parliament and our communities. 

We have:

  • held dozens of town hall meetings – both in person and online,
  • launched a website to keep residents informed,
  • run regular social media campaigns to reduce demand and delay Day Zero,
  • tabled detailed plans to the authorities,
  • lobbied national government to intervene in NMB,
  • exposed NMB’s contaminated water earlier this year,
  • raised the alarm that NMB was overdrawing from the dams thus expediting Day Zero, and
  • identified unused dams that can be reconnected to augment supply.

Many projects commissioned during the period when the DA was in government have never been completed, or even got off the ground, which has left 40% of residents now facing the inevitability of no water for many months ahead.

We are committed to establishing the state of all planned projects to integrate the Nooitgedacht system. The NMB Metropolitan Municipality (the Metro) has been unable to come clean as to which of these projects have been completed, are still in the planning phase, or have even fallen by the wayside due to insufficient budget.

The DA will now launch a Promotion of Access to Information Act (PAIA) application to force the Metro to provide this information.

The DA has also now written to the speaker of parliament to convene a joint sitting to address the unfolding water crisis in NMB. Bulk water supply is the responsibility of the national government, and the residents demand answers as to how this was allowed to happen and why the rudderless ANC-led coalition government has put almost no plans in place to mitigate this humanitarian crisis.

Day Zero will prove to have disastrous consequences for the people of NMB, as very few alternative plans to provide water to at least a third of the city have been communicated.The DA will continue to do all we can to assist residents during this unprecedented drought, drawing from the best practice that our governments have already shown in drought disaster management.

DA announces plan to force NMB’s ANC-led government to take Day Zero action

Day Zero is set to hit Nelson Mandela Bay within a matter of days as the second of the Metro’s two main supply dams is running dry. The Churchill Dam will in the coming days run out of water, while the Impofu Dam has already been decommissioned.

This will leave 40% of the residents of Nelson Mandela Bay without water leaving them to queue at hastily constructed water collection points to receive their allocation of 50 liters per person per day.

Today, 20 June 2022, I conducted oversight inspections in Port Elizabeth to assess the municipality’s readiness for Day Zero and was very concerned to see the state of communal taps at a water collection point in Buffelsfontein Road.

There are only 48 communal taps – a clear indication that there has been minimal logistics planning.  It is difficult to foresee how thousands of residents will manage to be serviced at this site. It is a recipe for conflict and chaos. (see pictures here and here)

I also conducted an oversight inspection to the Churchill pipeline near Schoenmakerskop, where it was clear that leakages have been a problem. (see pictures here and here)

This looming humanitarian crisis could have been avoided if it wasn’t for the inability of the ANC-led coalition government to plan  for this disaster and lead the City through it.

In the 2018/19 financial year, while the DA-led coalition was in government, we secured R750 million in long-term loan funding of which most was earmarked for water infrastructure projects. This funding was to be used to expedite the integration of the City’s water infrastructure with the Nooitgedacht Low-Level Scheme.

Under the ANC, many of these projects were never completed, or even got off the ground.

We need to establish the state of all planned projects to integrate the system. The Metro has been unable to come clean as to which of these projects have been completed, are still in the planning phase, or have even fallen by the wayside due to insufficient budget.

The DA will now launch a Promotion of Access to Information Act (PAIA) application to force the Metro to provide this information.

We will also submit an urgent motion to council for the establishment of a Section 79 committee that will run parallel to the disaster management team. This committee will be able to monitor the municipality’s performance in managing the water crisis on a daily basis and make recommendations to council. This committee must consist of civil society, business people, water engineers and experts, and councillors.

You need coordination in a state of disaster. Everyone must be on the same page and be willing to work together. Everybody must know what their role is.

The DA will do all it can to assist residents during this unprecedented drought, drawing from the best practice that our governments have already shown in drought disaster management.

Our historic opportunity to dismantle cadre deployment

Things are falling apart in South Africa because twenty five years ago, a very damaging piece of code got into the ANC’s operating system, inevitably infecting and destroying almost every institution of state.

Ultimately fatal

The Zondo reports and the ANC deployment committee minutes have confirmed what the DA has been saying for decades. That by erasing the separation between party and state, the ANC’s policy of cadre deployment is the foundation of state capture, grand corruption, institutional breakdown, and service delivery collapse.

The policy says that public sector appointments should be based on loyalty to the party rather than on ability to deliver to the public. This has undermined the capacity of state institutions to deliver on their mandate. By enabling the ANC to control most levers of power, it has also undermined the principle of separation of powers, the essential prerequisite for a functional democracy.

Formally adopted by the ANC at their 1997 Mafikeng conference, cadre deployment tied the party into an ultimately fatal parasitic relationship with the South African state.

Full effects

With cadre deployment in its endgame, its full effects are now bombarding South Africa from every angle, creating a perfect storm of human suffering.

It is the root cause of SAPS’s inability to enforce law and order, which has led to 6083 murders in the first three months of this year, 306 of children under the age of 17, an increase of 22% in the murder rate compared with the same period last year.

It is the root cause of municipal collapse, as reported by Ratings Afrika, this week. According to its Municipal Financial Sustainability Index, most municipalities in South Africa are on the verge of collapse financially – except in the DA-run Western Cape.

It is the root cause of state capture and the grand corruption it enabled that saw R1.5 trillion stolen from the public purse.

The root cause of the load-shedding and soaring electricity prices and collapsed rail system that are crippling our economy.

The root cause of the factionalism, the fierce internal competition for access to state resources, that saw ANC politics spill onto the streets of KZN in July last year, destroying hundreds of lives, thousands of jobs, and billions of rands of property.

And of our broken education system that has so stunted the life prospects of millions of South African children, with six out of nine provincial departments of education having been captured by SADTU, the ANC-affiliated teacher’s union.

To save South Africa we need to jettison the policy or the parasite, preferably both.

Evidence

With all the evidence that has been exposed by the Zondo Commission and the DA, we now have a historic opportunity to fundamentally uproot it.

Thanks to sustained DA pressure, the minutes since 2018 of the ANC’s Deployment Committee were made public, giving South Africans insight into the mechanism by which cadre deployment destroys the state.

The DA is still in court to obtain the minutes from 2013 to 2018, when then Deputy President Cyril Ramaphosa was chairperson of the Deployment Committee, the period when the worst state capture appointments were made – such as of Brian Molefe to head up Eskom and Tom Moyane SARS.

But the good news is that there is now widespread agreement in the media and in civil society at large that cadre deployment is the root of the problem and needs to go.

The DA is taking two major action steps this week that could bring it to a decisive end.

End Cadre Deployment Bill

Today, Leon Schreiber is presenting the DA’s End Cadre Deployment Bill to parliament’s committee on public service and administration. The bill would: make it illegal for politicians to work in the civil service; enhance the independence and powers of the Public Service Commission; and make it a crime for anyone to appoint a public servant on the basis of political considerations other than merit. It would also give the PSC power to enforce merit-based appointments and take remedial action against anyone not following its directives. So it is a very comprehensive reform bill.

Despite President Ramaphosa’s repeated defense of cadre deployment and his request to DC Justice Zondo not to rule that it be scrapped, the first Zondo report makes it clear that an independent, empowered PSC is necessary, concluding:

  • 418. When regard is had to all of the above, it is quite clear that the appointment of members of Boards of Directors of SOEs as well as senior executives such as CEOs and CFOs can no longer be left solely in the hands of politicians because in the main they have failed dismally to give these SOEs members of Boards and CEOs and CFOs who have integrity and who have what it would take to lead these institutions successfully. They are all going down one by one and, quite often, they depend on bail outs.
  • 419. It is therefore necessary that a body be established which will be tasked with the identification, recruitment and selection of the right kind of people who will be considered for appointment as members of Boards of SOEs and those who will be appointed as CEOs and CFOs at these SOEs.

Coming soon

On Friday, the DA will announce another unprecedented and historic intervention to force the government and the ANC to scrap cadre deployment and ensure it never sneaks in again going forward.

The DA will continue to lead the fight against cadre deployment and for a capable, honest state able to deliver on its constitutional mandate, with institutions that check and balance power, and thereby prevent the abuse of political power that has infiltrated our body politic, from the President down.

Fuel Price Hike: ‘We will not let this go’

Kindly find soundbite here, and relevant photos here, here, here and here

Today, DA activists got together on street corners across Cape Town, picketing against the ANC government’s exorbitant fuel prices.

Joining DA activists in Parow, DA Provincial Leader, Tertuis Simmers said “we will not let this go. We simply cannot pay this absurd amount of almost R25 per litre for fuel. The ANC government is driving South Africans deeper and deeper into poverty.”

“We are standing here this morning and raising our voices in support of poor communities. The ANC has forgotten about the poor. From stashing millions of dollars under matrasses in their mansions, to taxing our people into poverty, the ANC simply does not care about the people of our country anymore”.

Mr Simmers held that, “As a caring party, the DA will continue to pressure the ANC, forcing them to slash their heartless policies that are crippling our people.”

Parliament has agreed to urgently debate the DA’s demand for the ANC government to slash fuel prices, by cutting the 33% tax on fuel.

We will use this debate in Parliament, on Wednesday next week, to formally table our workable, and practical solutions which will cut more than R6 on levies from every litre of fuel.

New municipal law a victory and precedent against cadre deployment

If last year’s local government election signalled the end of the ANC’s political predominance, it also sounded a warning for public servants – the folks who are meant to serve whatever government comes to power after an election. If your career prospects rely mainly on the ANC’s patronage, you might be in trouble.

Just ask the political staffers in Joburg, whose fixed-term contracts the ANC unlawfully converted into permanent jobs just before the election. The decision was duly reversed by the city’s new council, this time under the leadership of DA mayor Mpho Phalatse. Despite a vicious fightback by the ANC aligned SA Municipal Workers Union (SAMWU), the Phalatse administration was vindicated in the Labour Court.

Even more remarkable than this victory is a concession recently made by the ANC in Parliament. Last month MPs voted unanimously to pass the Municipal Systems Amendment Bill of 2019, the closest Parliament has ever come to acknowledging and counteracting the practice of cadre deployment.

If President Cyril Ramaphosa signs the Bill into law, all municipal officials, from the municipal manager to general workers, will have a grace period of one year to resign from any elected or appointed position held in a political party. This includes chairpersons, deputy chairpersons, secretaries, and even co-opted members of party committees.

The previous Municipal Systems Amendment Act contained a similar provision, but it was limited to the municipal manager and his or her direct reports. That Act was invalidated by the Constitutional Court in 2018, after SAMWU challenged the constitutionality of the political office ban. But the Court didn’t consider SAMWU’s substantive arguments. Its decision was based on a fatal procedural flaw that Parliament had made in 2011 when the Act was passed.

And so, the SA Local Government Association (SALGA) used the opportunity of a replacement law to propose that the political office ban be extended to all municipal employees. This was a proposal that DA members on the cooperative governance committee were happy to endorse. And, thanks in no small part to the capable and even-handed chairmanship of Faith Muthambi, the DA’s formulation of the definition of ‘political office’ was taken up in the Bill.

To appreciate the significance of any law that draws a line between party and state, you have to understand that cadre deployment is not just a glitch in the ANC’s system. It is a formal policy adopted at the party’s 1997 national conference in Mafikeng, and discussed at length in the months leading up to the conference.

If those ANC discussion documents are to be believed, the party’s ambitions aren’t limited to winning elections and governing well. They extend to permanent control of all ‘levers of power’ in society, including the public service, the army, and the judiciary.

Cadre deployment was the ANC’s way of overriding the constitutional separation between party and state by assigning party agents, or ‘cadres’, to public service and constitutional positions that formally require political impartiality. Thud a disastrous train of events was set in motion, including the loss of skills and expertise in the public sector, the decay of service infrastructure, and the capture of state institutions.

The political office ban contained in the new Amendment Bill won’t bring a conclusive end to cadre deployment in municipalities, but it can stifle its implementation. Here’s one example, provided to the portfolio committee by SALGA.

A mid-level official in a rural municipality also happens to be the regional chairperson of the ANC. The mid-level official is meant to answer to the municipal manager, but in the ANC’s political pecking order the power relationship is reversed. And so, the formal authority of the municipal manager, the lesser cadre, is subordinated to that of the political boss, comrade middle-manager. This extends to appointments, tenders and other decisions legally reserved for a municipality’s ‘accounting officer’.

Under the Amendment Bill, both the comrade municipal manager and comrade middle-manager will have to choose between a party position and a municipal job. If the political boss then still tries to dictate the municipal manager’s decisions, at least he’ll be doing so from outside the institution, and without a taxpayer-funded salary.

The next logical step for Parliament will be to extend the political office ban to public servants who work in other spheres of government, which is exactly what the DA’s End Cadre Deployment Bill will seek to do. If municipal officials should not serve on the decision-making committees of political parties, why should public servants in national and provincial government be exempt from this rule?

The End Cadre Deployment Bill will serve before the public service portfolio committee on 8 June. In addition to a political office ban for public servants, the Bill will enhance the independence and the powers of the Public Service Commission to make merit-based appointments. This is not only a response to the revelations of the Zondo Commission, it’s a bold attempt to repair the damage done to state institutions by decades of one party rule.

Section 197 of the Constitution is clear about the need for a professional and politically impartial public service. It is time we bring national legislation in line with this constitutional principle, the hallmark of a capable state. The Municipal Systems Amendment Bill was the first step in that direction, and the End Cadre Deployment Bill will be the next.

Replace failed BBBEE with DA’s Economic Justice policy

On Monday, in his weekly newsletter, President Ramaphosa came out guns blazing for BBBEE, the ANC’s approach to redressing the injustices of South Africa’s Apartheid and colonial past, saying it is “a must for growth”.

This is not just a president living in fantasyland. This is a president actively deceiving a nation. And he knows it. But he does it anyway, because BBBEE is the glue that keeps his faction-riven party from falling apart.

A radically different approach

After 19 years, it’s time to admit that BBBEE has failed and needs replacing with the DA’s Economic Justice policy, or something similar.

The DA’s Economic Justice policy differs from BBBEE in three important respects.

First, it targets the poor black majority for redress, rather than a small, connected elite. It does so by directly addressing the key drivers of inequality of opportunity rather than relying on “trickle down redress”.

Second, it prioritises cost and competence in government procurement where BBBEE allocates state contracts at inflated tender prices to companies often unable to deliver.

Third, it promotes rather than undermines economic growth by attracting rather than deterring investment.

BBBEE has failed

According to the government’s website, “the fundamental objective of the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, is to enhance the economic participation of black people in the South African economy”.

On Tuesday, the latest Quarterly Labour Force Survey revealed that the official broad unemployment rate amongst black South Africans in Q1 of 2022 is 50%, up from 36% in Q1 of 2008.

This equates to a doubling of the number of unemployed black South Africans from 5,7 million to 11,3 million during the past 14 years. (2008 is the earliest year that StatsSA gives employment data for.)

The fact is, after 19 years of so-called “broad-based” BEE, inequality and black poverty are at record highs and there are more black people locked out of the economy than ever before.

Of course, the black unemployment rate and the black poverty rate are not the only measures of black economic participation. But they are surely the most important.

BBBEE has so obviously failed in its fundamental objective of achieving broad economic inclusion for the black majority.

Profound harm

Worse still, it has profoundly harmed this group.

Nineteen years down the line, it is now clear that BBBEE has enriched a small number of politically connected individuals – of all races – at the expense of the black majority.

It has done so by giving connected individuals/companies preferential access to lucrative government contracts at inflated tender prices, and without sufficient regard for whether these individuals/companies are able to deliver.

This actively and disproportionately harms the poor black majority who most suffer the consequences of inefficient and ineffective state spending, since they are most dependent on the state.

The DA is resolute that cost and competence must take priority in government procurement. Over-priced and unfulfilled or badly delivered contracts hurt the poor black majority because that is the group most reliant on government services.

BBBEE, operating in tandem with cadre deployment, is the mechanism whereby R1.5 trillion was lost to state capture and R14 billion to covid-related PPE theft, and whereby R238 000 was paid for a wooden mop, as Eskom reported last year. Inflated tender prices are not the exception; they are the norm.

Hence, not only has economic disadvantage been perpetuated for the black majority, but the gap has widened.

BBBEE has also harmed the black majority by deterring investment.

A must for growth?

The only thing that grows an economy is investment in productive enterprises. BBBEE is a major obstacle to this, not only because compliance is difficult and costly, but because it has engendered a corrupt, patronage-driven, incapable state.

In 2016, the EU Chamber of Commerce in South Africa indicated BBBEE legislation as its top legislative impediment, and top three challenge overall to doing business in South Africa.

The DA’s Economic Justice policy, on the other hand, bases preferential government procurement on the globally recognised Sustainable Development Goals model, choosing competent companies that make a positive socioeconomic contribution to the poor black majority.

This model promotes investment, because investors, shareholders, and analysts look for companies with strong SDG awareness and commitments. Rather than being deterred by the BBBEE model, investors are attracted by the SDG model.

Broad-based transformation requires growth

As President Ramaphosa correctly pointed out in his newsletter on Monday: Economic transformation and economic growth are intertwined. There cannot be one without the other.

Growth is essential for two things:

  • Job creation on a massive scale to bring millions of black people into the South African economy; and
  • Growing access to opportunities (education, health, housing, transport, electricity, safety, communication, grants, title deeds) for the poor black majority by spending growing tax revenues disproportionately on this group. These are the opportunities which enable people to participate in the economy.

Whereas BBBEE is anti-growth and exclusive, the DA’s Economic Justice policy is pro-growth and inclusive.

Conclusion

South Africa desperately needs a radically different approach to redress and inclusion. We can win the fight against our deeply unequal, unjust past. But the only way to do it is to ensure economic opportunities are available to all, not just the elite. The DA’s Economic Justice policy does that. Our approach to broad-based transformation will succeed where BBBEE has failed.