Article

The ANC must go

JOHANNESBURG, SOUTH AFRICA

PRESIDENT Cyril Ramaphosa’s State of the Nation Address (SONA) last month was a huge disappointment. I had expected new and fresh ideas from Ramaphosa as leader of the new coalition government. It was the first SONA under the coalition government.

Yet Ramaphosa’s speech had nothing new. It was as if there was no coalition and the ANC still dominated the legislature with a majority. There was zero commitment to limited government. No movement to the center on government’s agenda. More race-based programs like the Transformation Fund.

No fresh thinking at all! And that’s disheartening, as South Africa needs new ideas to reboot its economy that grew by only 0.6% last year.

There was no talk of an AI strategy by President Ramaphosa. As AI’s capabilities advance rapidly in the technology arena, the President is supposed to be working on and communicating an AI national policy strategy that will shore up South Africa’s economy in the upcoming decades.

As usual, the President touted his welfare programs, characterised them as a success. Well, Mr. President, increasing government dependency is no success. It’s a complete failure. Failure of you and your party the African National Congress (ANC). We need a new vision, Mr. President.

Godongwana’s anti-growth budget

And then came the national budget tabled by Finance Minister Enoch Godongwana this past week. The Value Added Tax (VAT) is a bad idea. It’s anti-poor.

I’m glad to see political parties like the Democratic Alliance (DA) and others opposing the VAT increase.

My position as expressed in my posts on X over the past weeks, is that there should be no tax increases of any kind in South Africa at this time.

Actually, taxes should be cut. South Africa has one of the highest tax burdens in the emerging markets. Both personal income and corporate tax rates are very high. South Africans are overtaxed. This should be reversed.

Aggressive government spending cuts are also needed, since government spending is the source of the problem.

Late Nobel economist Milton Friedman once said, “Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax.”

And there is historian and economist Thomas Sowell who said, “The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.”

South Africa needs a robust program to drastically reduce government spending that is very expansive to taxpayers. It should not be just procurement or the size of the cabinet that are cut. I want to see government departments shut down. President Javier Milei is doing it in Argentina. He’s doing what must be done to address Argentina’s fiscal problems.

We have not embraced a culture of government spending cuts over the past 30 years of our democracy. It’s time we do! Because we have no money and spend beyond our means, as shown by the budget deficit.

Godongwana projects 1.9% annual economic growth this year, and 1.7% annual economic growth next year. I struggle to see how this leap from last year’s 0.6% to 1.9% growth will be achieved. This ANC-led coalition is not dialling back on the very policies that kept South Africa in economic stagnation over the past decade.

Government debt remains a problem. The debt to GDP ratio may not look too bad in contrast to South Africa’s peers – but debt service costs are concerning. “Debt-service costs will amount to R389.6 billion in the current financial year. This translates to 22 cents of every rand we raise in revenue.”, Minister Godongwana said during his tabling of the budget.

Both the International Monetary Fund (IMF) and World Bank have written that South Africa’s regulatory environment is anti-growth. Something I have been saying for years.

It’s time for the ANC to go

With Ramaphosa’s disappointing SONA, and Godongwana’s anti-growth budget, the ANC has demonstrated yet again, that it has no plan to achieve stronger economic growth.

Moeletsi Mbeki, South Africa’s author and political economist, once said that all the ANC knows is redistribution. It does not understand the importance of economic growth. I think he had a point.

The ANC must go now. They’ve done enough damage to South Africa.

South Africans must remove the ANC from power in the upcoming elections. If this isn’t done, we will end up with President Fikile Mbalula or Panyaza Lesufi. Both these men would be a disaster for South Africa.

The party has lost its way. With it still in governance, we will not see meaningful change in South Africa. Both on domestic and foreign policy.

All the ANC knows is spending taxpayers’ money. They love big programs and government spending and redistribution. They have become a liability to South Africa – governing over staggering murder rates and unemployment. They don’t deserve to be in power at this point, in any opinion.

I hope that South African voters hold the ANC to account at the ballot box. The sooner the voters do this, the better. PM

This article was first published on Politicsweb.co.za. Buy Phumlani’s book Lessons from Past Heroes here, and subscribe to his YouTube channel here.

© PHUMLANI M. MAJOZI