Article

The past ten years, the political and economic state of South Africa, and my place in it


JOHANNESBURG, SOUTH AFRICA

AS South Africa is in total 21-day-lockdown due to COVID-19 pandemic, I thought I take time to reflect on the past ten years.

Here, I will talk a bit about my professional life, the origins of my socioeconomic philosophy, as well as the political and economic state of South Africa.

It was a decade to remember

The past ten years will be one of the memorable decades for historians around the world.

In 2010, the beginning of the decade, South Africa was the first country in Africa to host the world football tournament. Still remember that?

Three years later, in 2013, our founding father and anti-apartheid icon, Nelson Mandela, died. And at the end of the decade, last year, the Springboks won the rugby world cup for a third time.

These are a few of the events that shaped my native South Africa in the past decade.

In other parts of the world, humanity and nature transformed history too, as superbly covered by America’s Cable News Network (CNN) last December.

How the past decade transformed my professional life

In 2010, I was finishing my undergraduate studies in economics and information systems at Rhodes University in Eastern Cape.

In the year that followed, 2011, I found myself at University of Cape Town (UCT) pursuing my honours degree in information systems, and two electives, which were natural resource economics and game theory both in the economics department.

UCT was the most challenging and stressful episode of my academic history. The institution really did put me through a hard test – that I managed to pass well.

There were achievements, blunders and setbacks in the past ten years. The blunders and setbacks were extremely hard to put behind.

Amongst the things that I could have done better, were my media interviews. Because of a lack of consistency on my performances, some interviews were good, some not so good.

My former media coach, Malcolm Russell, who ran his own media coaching company and worked with SuperSport in Johannesburg, was at some point frustrated by my poor media performances that he gave up on me.

With all that went wrong, I will never forget Malcolm as long as I still walk in this earth. I am grateful to his life-changing contributions to my journey to success. His astute teachings will never be forgotten. I was the luckiest person in the world to have had an opportunity to work with him.

In the past ten years, I visited a few countries – Germany, Belgium, Netherlands, Kenya three times, Nigeria, Palestine, Israel, and United States of America (USA).

Visiting these countries was a remarkable and eye-opening experience. Each trip transformed my philosophical thinking about the world. In some occasions, I was reminded how privileged I am to be a South African citizen.

Only one nation I visited outside of Africa was poor – Palestine. All the others were affluent, advanced, with higher standards of living. Nigeria and Kenya, here in Africa, still face enormous socioeconomic challenges – from low standards of living to lack of infrastructure.

One thing I did well, and relentlessly in the 2010s, was the expansion of my personal network – that is now – global.

And then there was a radio show I hosted at Salaamedia and One Nation FM 88.9 from March 2018 to May 2019. The show was called The State of Africa and aired weekly. Its objective was to put Africa’s current affairs on the spotlight.

Amongst the movers and shakers, I interviewed on my show, were former minister of small businesses Lindiwe Zulu, and former minister of science and technology, Mosibudi Mangena.

Broadcasting was a thrilling experience and something I will continue doing throughout my career.

The decade was also marked by two downturns in my personal life – my career that never went well at Accenture, and a master’s degree I didn’t do well in at the University of the Witwatersrand in Johannesburg. Both of these troughs were due to personal problems – not that I was not smart enough.

I learned so much from these setbacks. Hence, today, I’m on full speed on my way to success.

The origins and evolution of my socioeconomic philosophy

Throughout my undergraduate studies in Grahamstown, now Makhanda, my political thinking was on the left-wing spectrum. This means I believed in a bigger role of government in the economy.

That was my worldview at Rhodes University, and it wasn’t based on any sophistication or intellectual underpinnings. It was, basically my intuitive feeling. It made sense to me.

The elements that, in totality, form this pro-government philosophy, are nationalizations of industries, government price controls, business regulations, high taxes and unconstrained government spending.

I was a member of South African Students Congress (SASCO), a predominantly black left-wing student movement in South Africa’s universities.

I recall a time when my house warden, Matthew Leaver, asked me what I thought of Julius Malema’s call for nationalization at the time.

My response to Leaver was that Malema’s proposals ought to be explored. Fast forward to today, I see Malema’s views a serious threat to South Africa’s young democracy.

It was in Cape Town that I eventually renounced socialism. My great friend Dr. Stephen Taylor – an education economist and a researcher then at University of Stellenbosch – introduced me to Milton Friedman’s classic book Capitalism and Freedom.

Taylor was my housemate in the beautiful suburbs of Kenilworth at the time. A remarkable human being who saw potential in me – and would later play an invaluable role in the editing of my earlier opinion articles on politics and economics.

Subsequent to being introduced to Friedman’s book – I went to the internet to learn about this sensible dead economist. I was hooked!

Milton’s videos on YouTube were moving, intelligent and brimmed with clarity. The television series of the early 1980s – Free To Choose – was one of the most important pieces of intellectual material I had ever discovered. It introduced me to the likes of Thomas Sowell and Walter E. Williams – black economists who were, and still are to this day, passionate evangelists of individual liberty.

Since that formative year at UCT, I have been a staunch champion of maximum individual liberty. It has been fulfilling.

It’s government that is wounding South Africa’s economy

In the midst of the current spread of COVID19 that is ravaging economies around the world, Moody’s, one of the global credit rating agencies, downgraded South Africa’s sovereign credit rating to junk with a negative outlook last week.

Moody’s cited continued deterioration in government’s fiscal strength and weak economic growth as reasons for the downgrade.

It was the only global agency that had not junked South Africa. Its rivals Fitch and S&P junked us back in 2017.

Moody’s decision was not surprising. South Africa’s dire economic situation has been around for a while.

Last February’s national budget speech by finance minister, Tito Mboweni, failed to inspire confidence in South Africa’s economy.

Government debt and budget deficit keep rising. State-owned enterprises are consuming billions of taxpayers’ money. Unemployment levels are at astounding levels.

This deterioration in the economy has been accompanied by a continuous decline in South Africa’s ranking in Fraser Institute’s Index of Economic Freedom over the past years.

The past fifteen years under the governing ANC were characterized by government’s overreach in its role on the economy. The interventions were done with the intent to improve the state of the economy, yet, paradoxically, stagnation worsened.

The facts I have laid out above indicate the blockade to reviving South Africa’s economy is government and its bad policy.

Effective, long-lasting economic turnaround requires robust privatization, relaxation of labour regulations, substantial tax cuts and pro-choice education.

Labor unions run amok in South Africa and have held the country to ransom. They wield a huge influence that is detrimental to the economy. They must be confronted with might and be deprived of the capability to sway public policy into their favor.

I hold Margaret Thatcher’s free-market philosophy on economics – famously known as Thatcherism – with high regard.

Thatcher was Prime Minister of Britain from 1979, till her resignation in November of 1990. One of the 20th century’s most principled and prominent advocates of human freedom.

South Africa under Cyril Ramaphosa has an opportunity to take the Thatcherism path. We need a wave of pro-market reforms that would improve the state of the economy and reduce the high levels of unemployment.

Thatcherism would require strong, resolute and courageous leadership – which is something this country lacks.

Ramaphosa projects inexplicable weakness and indecisiveness as President of South Africa.

Because of his indecisiveness, this country will be mired in an economic quagmire for a long while.

South Africa’s political future is terrifying

The state of our politics is concerning. Twenty-five years into a democratic South Africa, opposition parties remain weak. Though the ANC has been declining over the past twenty years, the party still dwarfs the opposition on electoral support. That is not a desirable situation, in my view.

As I argued in my News24 column recently, without a stronger opposition, South Africa’s democracy is doomed. A vibrant, enduring democracy needs stronger opposition that will challenge whichever party in governance.

We haven’t seen such a setting in our post-1994 politics, and because of that unfortunate situation, the ANC has repeatedly and repeatedly abused its power, undermining our democracy.The biggest opposition party, the Democratic Alliance has been struggling to increase its support. It is still seen as a white party by many black South Africans.

Its followers tend to dismiss this race notion – and they also tend to disregard the fact that race matters in South Africa’s politics.

I believe the DA should also play the race card like other major parties do. It should unashamedly acknowledge racial inequalities and propose free market solutions to reduce those racial inequalities. After all, it is only free markets that can uplift the lives of the poor. I wish they would explore such an approach and see what comes out of it.

The dangerous, radical, left-wing Economic Freedom Fighters (EFF) helmed by Julius Malema, has seen rapid growth over the past six years – doubling their vote in last year’s election. And that to me has been unsettling.

The EFF promotes a deadly ideology that has been responsible for millions of deaths over the past hundred years – socialism. They are violent and have threatened minorities.

If the DA does not pull up its socks, I foresee a coalition between the ANC and the EFF in the years to come. If that happens, we will see economic catastrophe in our society.

Foreign policy must be viewed in the lens of history

There are two very important points I want to share on foreign policy.

Firstly, I tend to see foreign policy as more complex, in contrast to the usual domestic politics of the day. As a result, I often clash with my libertarian friends in America – and South Africa – who believe in the philosophy of noninterventionism.

I vehemently oppose noninterventionism – on the grounds that I see individual liberty as universal – not national. We should not and must not sit back and watch despots brutalizing and repressing their nations. Some form of interventions in countries whose leaders commit gross human rights abuses must take place.

Secondly, history is an effective device in conducting sensible and optimal foreign policy.

The American former Secretary of State, Dr. Henry A. Kissinger, once said “History is to nations what character is to individuals.” That was a powerful and precise assertion by Kissinger.

You won’t comprehend Vladimir Putin’s geopolitical practices if you are short of Russian history.

When nations engage the international system – their approach is determined by their histories.

Hence, it is an imperative that when South Africa engages other nations, it does so with an understanding of their histories. It’s the best way to practice successful diplomacy in a challenged world we live in.

Where am I now, and whereto from here?

At the time of this writing, my professional obligations are with a few organizations. These organizations, I am about to mention, have done wonders in my professional life.

Currently, Sasfin based in Johannesburg, and Greenmantle LLC headquartered in New York City, are my major employers. At Sasfin, my role involves the implementation of technological initiatives, and research contribution on global markets under a division Sasfin Wealth.

At Greenmantle LLC, I’m a macroeconomics and politics advisor on Africa’s financial markets. Working at this company opened new worlds for me – and I will forever treasure being part of it.

Both roles in these two companies require me to keep up with the ever-changing dynamics of international politics and economics – which I find exciting and energizing.

I’m also a participant in a number of NGOs. At the present moment, I sit on the board of two influential and prominent organizations: Free Market Foundation South Africa and Organization Undoing Tax Abuse (OUTA). The South African Institute of Race Relations remains dear to my heart and having been re-elected to its Council this year – I must say – I’m honored.

I’m in the process of writing a book that will be published in September 2021. This project will not be easy – and I know the book will undergo a rigorous editing process. I’m comfortable with that, because whatever ends up in bookstores needs to be of high quality.

I am clueless on how my future will evolve in the next decade – I will just work hard and hope for the best. For I strongly believe a commitment to hard, disciplined work, does produce success. PM

© PHUMLANI M. MAJOZI


2 Comments

  • Glenda McCleary <span>June 19, 2020 at 12:39 am</span>

    I enjoy your tweets and thoughtful comments. Oh my gosh if we only had more educated and thinking young people as yourself in this country, it might well have a more exciting, vibrant future. You are a refreshing balanced social commentator in a South Africa that we perceive is “gone”. Sadly, millions have had no education which in turn would naturally have evolved into questioning and thinking out of the box without which they become dumbed down followers, receivers of food parcels and a t-shirt and put their tick in the ANC box at election time, following perfectly the desired designed political outcome.

    Reply
    • Phumlani Majozi <span>June 22, 2020 at 11:57 pm</span>

      Dear Glenda,

      Thank you very much for your kind words. We’ll keep at it. Hopefully one day more people will hear us.

      Reply

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