Why so few South Africans have so much and so many, so little

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Thank you for the honour of this invitation to the Mail & Guardian’s 2023 200 Young South Africans awards. 

I want to start with a short note on present day inequality. We live in structural inequality, structural poverty and structural violence. According to Norwegian sociologist Johan Galtung, structural violence occurs where some social structure or social institution harms people by preventing them from meeting their basic needs. Institutionalised classism, ethnic discrimination and racism are examples. Structuralism, as discussed by academic  Todd Landman, focuses on structures that constrain social actions so that individuals are not completely free to make their own rational choices. Individuals are embedded in relational structures that shape their identities, interests and interactions. The structures are institutional — they may be the state or private corporations. Because of their political and economic influence, they can disable us from fulfilling our individual desires. 

What then is the “violence”? This occurs when resources are inaccessible despite their availability. As Galtung explains by way of an example, “a life expectancy of 30 years only, during the neolithic period, was not an expression of violence, but the same life-expectancy today … would be seen as violence.” The power of structuralist theory is in pointing us to the importance of both governmental and non-governmental structures that determine our access to resources, and hence constrain or facilitate independent action.

This is not only an exercise in theoretical abstraction. It is also borne out by the available social stratification data. 

In 2018, the World Bank delivered a report on the state of South Africa’s economic “progress” since the ANC took office in 1994. Noting that South Africa is one of the most unequal countries in the world, by any measure the World Bank found that for 76% of the population, poverty is a constant presence and menacing threat to their lives. Thirty percent of the population is chronically poor. An overwhelming number of those classified as non-poor face the risk of slipping into the chronically poor category. Thus 76% of the population are menaced by the threat of becoming poor or chronically poor. 

I should take the analysis further. Race, gender and income disparity explain the depth of South Africa’s inequality. Africans are at the highest risk of being poor. Children, large families and people living in rural areas are especially vulnerable to remaining impoverished for lengthy periods. Poverty is also gendered; the incidence of poverty is higher for African women. Most municipalities in the 20 poorest local municipalities are in the Eastern Cape, Limpopo and KwaZulu-Natal. Of these, the 10 poorest municipalities are in the former homelands, highlighting the enduring legacy of apartheid. 

We have become accustomed to the notion that education will end poverty. The World Bank shows that education can contribute to poverty reduction, but we should also focus on asset distribution, which is a stronger indicator of who is poor and who is not. “For the poor, the financial assets represent 36% of total assets, while among the rich, financial assets represent 75%. Similarly, poor households have a very small share of mortgage in total liabilities (about 7%), while for the rich this share is close to 5%. Ownership of financial assets features prominently among the factors that influence wealth inequality.”

This should hardly surprise us given the lack of access, for instance, to credit that educated black South Africans face on account of lack of security and the persistence of the notion of unemployed graduates.

The future of the 76% is also bleak. That is because wealth and poverty transfer across generations; at least a third of all children born to very poor parents will probably remain poor, while children of rich parents will probably become rich themselves. So wealth calcifies at the top, and doesn’t automatically trickle down. Since we have shown that white people are at the top and African women at the bottom of the economic ladder, calcification means the continuation of white wealth and black poverty, unless there is a fundamental reorganisation that changes the paradigm in favour of poor black South Africans. The incidence of Covid-19 and electricity blackouts have simply made the situation worse for the chronically, resulting in more Africans without income.   

Economic experts also support my hypothesis. In 2022, the Competition Commission produced its study on economic concentration. What it was researching was which industries have greater levels of competition. When there is no competition in a market, the theory is that there will probably be economic practices that are harmful to consumers, by higher prices and a diminution in the quality of services. The findings make some interesting reading because they look at the data for the past 20 years. The industries with high levels of concentration include: farming inputs (seed, storage, fungicides and insecticides, fertiliser); agro-processing (grain processing for human and animal consumption, fisheries, ostrich meat and leather); the “sin industries” (alcohol, gambling); healthcare (medical schemes and administration, pharmacy); communications (fibre to the home); mining and financial services. Agricultural concentration should not come as a surprise given the inability of the state to reform land ownership to enable more black people to participate in the land value chain.  

We are also always told that employment will come from small and medium enterprises (SMEs) and that the state should be focusing on this segment. Yet the analysis of the commission has shown that small and medium enterprises have greater entry and exit rates than larger firms. Of course, it is to be expected that SMEs will have higher rates of exit than large firms. But the point made by the commission is that South Africa’s exit levels of SMEs remain high by comparative standards. This provides evidence of higher barriers to entry in South Africa than in other countries. So we inherited a concentrated economy from apartheid; concentrated by rate, geography and social stratification. We have not been able to open it to make it more competitive, despite reforms in the law, including the passing of the Competition Act itself. 

The net result is that large firms are growing both locally and domestically. They are declaring generous dividends to their shareholders. The directors and executives are also rewarded handsomely. Take, for instance, Neal Froneman, the chief executive of Sibanye, who was paid R300 million in 2021 and R189 million in 2022. Or Mike Brown, the managing director of Nedbank, who was paid R43 million in 2022 and R53 million the year before. Or take the dividends paid to the shareholders of Thungela, which was previously part of Anglo American — in 2022 the firm paid R14 billion to its shareholders. Some South African firms are also doing well in global terms. Thungela is reported to have bought a coal mine in Australia at a value of R4 billion. In telecommunications, MTN and Vodacom have long penetrated the African continent. 

This is not a point of criticism. Robust firms, resilient firms, globally competitive firms, profitable firms are good signs for any economy. But it also does show that the economy is producing winners and losers. 

Who are the losers? Wages of workers have been rapidly declining, adding to the pressures of inflation, load-shedding and absence of reliable state services that they face. The standard of living for the many is going down. Many workers have lost their jobs. So the system works for some, but not for the many. My point is merely to reflect the debilitating effects of structural violence. This analysis shows that there are enough resources for all of us. Yet so few have so much and so many, so little. Structuralism as a method of analysis shows that this is not a design by God. God did not allocate resources in the world. We made the choices of who gets what and how much. 

So why is this the case? Why do so few have so much, yet so many have so little? This takes me to my second point. It is about the past or history. And it explains — even if tentatively — the social and economic structure we live in. There are many vantage points from which to speak about the past. Maybe we are unable to speak about the past. William Faulkner once wrote in one of his novels: “The past is never dead. It’s not even past.” We are now 50 years since the United Nations General Assembly adopted the Convention on Apartheid in 1973, which declared apartheid as a “crime against humanity”. It is perhaps the best encapsulation of the elements of apartheid, which have rendered it so enduring, despite all the changes in South Africa since 1994. The declaration is one of the few documents that address apartheid structurally and without falling into the trap of its pettiness. 

The convention’s definition of the crime begins by rejecting the notion that a crime is necessarily committed by an individual against the state. It recognised apartheid as a “systematic crime” committed by the apartheid state against black people. It set out six elements of the crime of apartheid. First, the deliberate imposition on a racial group of living conditions calculated to cause its physical destruction in whole or in part. Second, laws calculated to prevent a racial group from participating in the political, social, economic and cultural life of the country. Third, the deliberate creation of conditions preventing the full development of a racial group, by denying them freedoms such as education, nationality, freedom of movement. Fourth, the creation of “separate reserves and ghettos”. Fifth, “the expropriation of land and property belonging to a racial group or groups or to members thereof”.  Finally, the exploitation of labour of the members of a racial group, in particular by submitting them to forced labour.  

The convention thus captured the essence of apartheid; it was a crime intended to benefit a racial group as a whole. Hence culpability for apartheid must extend to all those who derived the economic advantages from the system.   

It exposed the façade of “separate development” by recognising that there were no different races, each developing separately and alongside each other. The development of the white race was achieved at the expense of the black race. Black people lived alongside white people, but in a relationship of racial subordination. 

And this was the whole point of the democratic breakthrough of 1994: to end apartheid, to end it now and to end it for all times. Just like the famed lines in the song by British miners, reflecting the confluence and contradiction of racial capitalism: 

“In a city on a corner stands a house that’s mighty grandWhere in glory and in splendour dwell the magnates of the RandWhat a system! What a crime!We can’t mend it, we must end itEnd it now and for all times …” 

If we return to the 1973 Convention on Apartheid, ending apartheid means returning the land, ending racism, ending inequality, ending sexism. It means paying material and financial reparations to the victims of apartheid. It is not enough to end legal apartheid, but to leave the economic and structural features to persist in different forms. We must end the ongoing racialised economic power. This is a sine qua non for the construction of a new non-racialism. By a new non-racialism, I mean  a focus on the economic dimensions of racial reconciliation. 

We should ask why it has been difficult to address structural apartheid. This takes me to my third point. And your generation has been asking society this question since the days of #RhodesMustFall and #FeesMustFall, namely, why was this not resolved when we got our freedom in 1994? You have been asking why your generation has been burdened with this force of history. One way of looking at this is to recall the writings of Professor Sampie Terreblanche, who has commented on the forces at play during the transition from apartheid to democracy, noting the decisive influence of the “mineral energy complex” in the process. He writes that the 1986 state of emergency of PW Botha convinced the global capitalist class with financial interests in South Africa that the “crisis of accumulation” was real. If they did not intervene, there would be an implosion. The concern of capital was the “socialist orientation of the ANC”. They began having secret meetings and discussions with selected leaders of the ANC and separately with Botha’s government.

When Nelson Mandela was released from prison in 1990, these business interests intensified in their attempts to influence the policy direction of the country. Mandela himself was party to some of these discussions in his capacity as ANC president. These discussions would reach their climax in October 1993. The National Party under FW de Klerk formally surrendered power. De Klerk promulgated the Transitional Executive Council Act of 1993, which allowed the ANC to nominate an equal number of representatives together with the government to make all crucial political decisions until the election was held in April 1994. When the Transitional Executive Council (TEC) ran out of money, it asked the International Monetary Fund (IMF) for assistance. The IMF agreed to help, but as a condition the TEC was required to sign an undertaking on South Africa’s future economic policy. Terreblanche says that, in effect, this was an agreement to a neoliberal economic policy. There are, of course, other theories. Professor Steven Friedman, for instance, has introduced into the discourse of the transition the idea of “path dependence” — a concept designed to explain why past decisions and events constrain change. For Friedman the transition to democracy was constrained by the larger economic forces created in colonial and apartheid times. Some in the ANC were not necessarily interested in tearing down these structures, but in embedding themselves within them. 

My own view is that we should not overstate the influence of white economic power as the primary driving force during the transition to democracy. We should look at the endogenous policy dynamics inside the ANC. The fact is that when the ANC was in exile it had witnessed Africa’s disappointment with independence after 1960. Rather than setting Africa free from colonial rule, independence was characterised by poverty, structural adjustment programmes, corrupt regimes, military dictatorships and fraudulent elections. In its 30 years of exile, the ANC was careful not to repeat the mistakes of other African states. But it had also seen the reorganisation of the world order in favour of Western capitalism. It would have been naïve adventurism to create a new economic order that ignores the global system of capitalism.  

The evolution of the ANC’s policy-thinking is best captured in an exchange that took place on 29 October 1985 at the Foreign Affairs Committee of the British parliament. Oliver Tambo had appeared there to lobby parliamentarians against the apartheid government. Norman St John-Stevas, a British conservative politician, taxed Tambo on the ANC’s political philosophy beyond the end of apartheid: “For instance, the Freedom Charter has some definite views about nationalisation and land redistribution. Could you say something more about the attitude of the ANC to these matters?” Tambo at first refused to commit to a fixed ideological position: “[T]he Freedom Charter is not formulated on the basis of any ideological positions. The Freedom Charter simply looks at our situation in which there is great wealth — immense wealth — concentrated in the hands of a few while the vast majority of people are living in desperate poverty, and we say ‘how do we adjust this position?’” When asked directly whether the ANC’s intention was “to destroy the capitalist system as such, or to reform it”, Tambo was clear that the destruction of private capital was not ANC policy: “[W]e do not want to destroy it. The Freedom Charter does not even purport to want to destroy the capitalist system. All that the Freedom Charter does is to envisage a mixed economy in which part of the economy, some of the industries, would be controlled, owned, by the state … and the rest by private ownership — a mixed economy.” The ANC’s policy blueprint reflected the combined experiences of many countries and observations of failed economic policies, rather than a mere capitulation to the “mineral energy complex”.

The apartheid government had left the ANC with a crippling debt crisis. Tito Mboweni, former governor of the South African Reserve Bank, has alluded to this crisis in a speech given in 2004. He explained the “crisis” faced by South Africa that resulted in then finance minister Derek Keys approaching the IMF for funding: “One of the problems/constraints facing the economy at that time was that the country only had foreign reserves to cover for plus/minus three weeks of imports.” The result was that the government approached the IMF for funding, to be channelled through the Compensatory and Contingency Financing Facility. Mboweni concedes that the IMF required the TEC to sign a statement on economic policy which was no more than a commitment to follow a “prudent” macro­economic strategy. Yet the core of Terreblanche’s argument is that ANC policy should be seen in the context of the global forces at play. And this need not be viewed as a bad thing, simply as an explanation for the agree­ments reached in the transition. The IMF statement on economic policy committed the ANC to “neoliberalism and market fundamentalism”.

I want to move to my fourth point. I have been trying to show how the apartheid structure of the economy has constrained the possibility of individual and collective freedom. I have been doing so in pessimistic terms. But the possibility of individual action in favour of freedom has not always been constrained by structural externalities. On 8 January 1912, in Bloemfontein, a conference was opened with this Methodist song, which for reasons of space, I must shorten:

“Lizalis idinga lakhoThixo nkosi yenyanisoZonki’intlanga, zonki’izizweMazizuze usindiso…

Amadolo kweli lizweMawa gobe phambi kwakhoZide zithi zonk’ilwimiZiluxel’udumo lwakho”

This was the founding meeting of the ANC. Among its founders were Pixley ka Isaka Seme, George Montsioa, Alfred Mangena. A year later, they would be joined by Richard Msimang. Seme was 31. Montsioa was 27. Mangena was 33.  Msimang was 29. The ANC would dominate all political discourses for most of the 20th century. Regional in its reach, the ANC influenced the formation of similar nationalist movements across Africa, demanding their freedom from European domination. 

The influence of these men began to wane in the decade of apartheid, in 1948. By 1944 there was a new generation, impatient with petitions, deputations, telegrams and delegations.  They wanted confrontation. The moving spirit behind this new generation was Anton Lembede, a scholar, a philosopher, an activist who was 30 at the time. In the 1960s, the leaders of the ANC including Nelson Mandela, Oliver Tambo and Walter Sisulu, who was 33 years at the time, were persecuted by the state.  Tambo was forced into exile in Europe. Mandela, Sisulu and many others were sentenced after a sham political trial to life in prison. Mandela’s incarceration, ironically, also inspired even more people in the world to see the injustices of apartheid. 

When the struggle against apartheid began, it had seemed impossible. There was much domination to see the other end of struggle. Yet, young people, driven by their own history, their own desires and their conditions decided to wage the struggle nevertheless. Their concerns then were about racial injustice, which still haunt us today.  Those struggles thrust Mandela to the role for which he is known today — the most formidable opponent of apartheid and a great revolutionary of the 20th century. 

Of course, Mandela is no more. And so is Charlotte Maxeke. WEB du Bois, who had taught Maxeke, once posited that the reconstruction of black America from the ravages of slavery would be the responsibility of a “talented tenth”. This a tenth of black society, comprised of black men with exceptional merit and advanced education. The idea sounds tempting and members of this strata — like most of us present here — might wish to appropriate it for themselves. But I am afraid that the idea has suffered from its inherent black exceptionalism and elitism. We only entrench inequality if we assume the knowledge of the problems and challenges of the poor. We cannot find solutions for them, without them. This means we cannot rely on the intellectual strength of Du Bois too. What we need is thinking collectively and expansively about where we are, how we got here and how we move towards the future or futures. Much like the past, it is by no means clear where we are going. We may not know the full extent of where we are going, but we can agree on what South Africa needs to do to overcome the multiple legacies of apartheid. It is easy to point to the evidence produced by witnesses at the Zondo commission of inquiry into state capture and then to conclude that if only we could prevent the recurrence of corruption, we could finally achieve Mandela’s utopia of the “new South Africa”. But I think that this is not possible. Corruption is not necessarily the sole and exclusive cause of inequality; in fact it may be its inevitable by-product. 

Let me return to where we began. What was the point of the vote in 1994? The new political order of 1994 was intended to provide a platform for a radical and decisive break from the past. But it has been constrained by political crisis. And here I need to look no further than the Zondo commission report to know the nature of political crisis: a state unable to govern; captured by a kleptocratic elite; failed promises. The report has painted a picture of a failed revolution. Chief Justice Rayomond Zondo points to an ANC that is an enabler of capture, indifferent to capture and a beneficiary of capture. Its leaders have fared no better. They come out of the pages of the Zondo commission report as a dithering class, unable to make the crucial interventions when needed, intent at protecting their own positions in the party and the position of the party in government. Surely, a political crisis of governance is upon us. Surely, we have entered political stagnation and regression. In his Prison Notebooks Antonio Gramsci called this a crisis of hegemony: where the old is dying, but the new cannot be born.   

So how do we give birth to the new? And this is my final point. And it is about optimism — a topic Mr Ron Derby in fact invited me to talk about tonight. I borrow from Paul Landau in his new book, Spear, speaking of Nelson Mandela’s turn to revolution. Looking back at what Mandela could achieve in his lifetime, it is far easier to believe that things worked out as they were destined to. Yet Mandela was always filled with doubt. He did not believe that he had abandoned a lucrative legal career in a sacrificial ritual to bring us freedom in 1994. He did not know that he would contribute to the collapse of the apartheid system. Nor did he know that his example would inspire many across the world to dream for their own freedom. At each stage of his life, each crucial moment of his decision, he was always in doubt. He doubted that Mandela, the accused, would not be hanged. He doubted his own decision to start an arm struggle. Always in trepidation, always unsure, always in two minds. He doubted thatMK — Umkhonto weSizwe — would turn out the way it did; he doubted its viability. He did not know the future. Many people cast doubt upon it; filled him with uncertainty and fear. 

So it turns out that to have an effect, we don’t need to know the future. We don’t need to be free of doubt. We don’t need to be sure that we are supported by others, only that we believe in the idea. What turned Mandela the man into Mandela the idea; Mandela the icon; Mandela the figurehead is that he tried. He tried to make the future of his dreams. We also can. 

Congratulations to all of the winners tonight.      

Tembeka Ngcukaitobi is a lawyer, public speaker, author and political activist. He is a member of the South African Law Reform Commission.