Mandela’s Economic Lesson To African Leaders

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Few days ago the world celebrated Nelson Mandela, a man whose life personalises the tireless struggle against and victorious defeat of racial discrimination and inequality. Born 96 years ago, Madiba by his historic defeat of oppression and hatred, and legendary institution of reconciliation and unity, came to be the Father of a nation, a continent… of the world.

Albeit regretful of our inability to publish this piece yesterday- the official Mandela day, no piece on him can come too late or early; he is A Man For all Seasons.

In celebrating Mandela, the battle against Apartheid’s socio-economic and political oppression- epitomized by his three decades in detention -rightly dominates his legacy, but there is another component- the economic policies of his presidency.

Nelson Mandela’s economic policy, though less-talked about, was very crucial for the success of the Rainbow nation that South Africa has become. Mandela’s economics, though not bereft of shortcomings, transformed Apartheid-wrecked and isolated South Africa to a land greatly admired and reckoned as an example of peaceful and progressive multi-racial African democracy.

When Nelson Mandela became the president of South Africa in 1994, alongside the walls of racial disaffection that needed to be pulled down and bridges of national unity that had to be built were huge potholes of economic inequality desperate for patch-ups, large pits of poverty crying to be filled, and a gigantic mountain of national economic development that needed to be climbed. And similar to how he faced the apartheid system that enslaved him and his people, Mandela faced South Africa’s economic crises head-on with courage, integrity and most importantly the interest of not just his fellow blacks but the whole country.

While many black South Africans expected Nelson Mandela to, with the new power he and his party now possessed, sieze and nationalize the country’s lands, mines and financial institutions and redistribute them to people of his long-suffering race, Mandela towed a different line. He did not force the white entrepreneurs out, had he done that, South Africa may have looked like the Zimbabwe of today. Bill Keller Wrote in the New yYork Times; ” As President, from 1994 to 1999, he (Mandela) devoted much energy to moderating the bitterness of his black electorate and to reassuring whites with fears of vengeance. this is a rarity in Africa where most leaders stoke the fires ethnic conflicts often for selfish political gains. Mandela’s move was not only one of forgiveness, but economically savvy.

In 2013, John Cassidy wrote of Mandela’s government in the New Yorker; “The new government took over an economy that had been hard hit by foreign sanctions and an international disinvestment campaign. In embarking on a moderate and gradualist path, Mandela and his economic advisers insured that a multiracial and democratic South Africa would receive much-needed economic aid from the World Bank and the I.M.F., as well as individual countries like Britain and the United States. (It is now the ninth-biggest recipient of U.S. aid, receiving about seven hundred and fifty million dollars a year.) In leaving the existing economic structure largely intact, the new government was also able to rely on steadily rising tax revenues, which financed spending on new houses, schools, and electricity and water systems—most of them located in non-white areas. Steady growth paid for a big expansion in welfare programs, too”.

Mandela’s policies created what Mike Cohen in Bloomberg’s Business Week described as the “longest period of growth in the country’s history”. He added that “Mandela’s policies helped the economy, whose biggest sectors are mining (it’s the top global producer of platinum), manufacturing, banking, and telecommunications, to expand for 15 years. Rising tax receipts enabled the government to extend welfare payments to about 16 million people and give more than 85 percent of households access to electricity, up from 45 percent in 1996”.

Perhaps the most interesting part of Cohen’s piece is his quote of Robert Schrire’s quip. Of Mandela, the South African Professor said; “He recognized that for the poor to prosper, the rich had to feel they had a future in the country”.

Mandela proved that capitalism and the white man are not curses to Africa, instead that a proper and effective government oversight of and participation with private sector investment could be a profound gift to the equitable development of a country, especially the masses.

Mandela’s economic legacy turned around South Africa’s Sanction-battered economy from a state of near bankruptcy becoming to a strong economic growth that saw the Rainbow Nation invited in 2010 to join the BRIC bloc, four powerful emerging countries—Brazil, Russia, India, and China. According to a December 2013 BBC report “South Africa’s economy has “essentially doubled in real terms” since the fall of apartheid, growing at an average of 3.2% a year since 1994, as opposed to only 1.6% per annum for the 18 years prior to the end of white minority rule”. South Africans living under $2 a day has, since 1996, fallen from 12% to 5% in 2010.

Mandela’s underlying principle was delivering, at least in part, the promises of the ANC’s 1950 Freedom Charter. This saw not just the extensive provision of basic amenities like roads, electricity, water, schools et cetera, but also a framework where all South Africans have the right to pursue their economic dreams. He did not just deliver rhetoric of liberation and freedom, he knew the importance of economic empowerment in liberating his people, and he focused on this.

Often African leaders make so much noise of serving and defending their people but end up only ruling to enrich themselves, Mandela was not such. It was the relatively corruption-clean and people-driven government he led that saw South Africa blossom in its early years after apartheid. The rise of corruption and cronyism to the centre-stage of South Africa’s governance after Mandela’s departure from power has caused the country’s development stutter.

Unemployment Rate in South Africa increased to 25.20 percent in the first quarter of 2014, according to data from Trading Economics. The inequality gap has soared too, with the United Nations regularly ranking South Africa’s cities amongst the most unequal in the world. In 2013, Matthew Davies of the BBC described inequality as greater, by some measures, than it was under apartheid. “Under the commonly-used Gini coefficient for measuring inequality, South Africa scored 0.63 in 2009. Under the coefficient, 0 is the most equal and 1 is the least equal. Back in 1993, the country’s rating was 0.59, which has led many to the conclusion that the gap between the rich and poor is actually getting bigger”, his report said.

Economic problems have turned South Africa to a land of strikes and protests, the most disastrous in 2012 at Lonmin’s Marikana platinum mine in Rustenburg saw 34 miners shot dead. These economic problems lead some to criticize Mandela’s negotiation with the white minority who control much of South Africa’s business. But a look at the success (or lack of) of the ANC’s Black Economic Empowerment (BEE) programme fetters that criticism. The BEE sought to give black South Africans a stake in the nation’s industries, and although it helped create a fast growing black middle class, it largely did not improve the lot of the majority, only succeeding in creating cronyism with the benefactors being politically well-connected elite.Equitable wealth creation is not guaranteed by “sharing the money”, this only festers corruption.

South Africa in recent years have seen unions fighting not just the managements but each other too, a clear reflection of how self-enriching much of their motives are. Corruption now pervades not just the Government, but also the corporate sphere and even the organized labour. This personal greed is fast replacing the revolutionary spirit that gave birth to the Rainbow nation. Nothing is fast killing this spirit than the falling standards of integrity and patriotism-driven leadership, attributes that Mandela possessed in abundance, qualities that African leaders really need to acquire.

The ANC, Mandela’s vehicle to transforming South Africa, is fast losing the confidence of even its staunch black support base, because of its ineffective creation of economic development. The booing of President Jacob Zuma at Mandela’s funeral last year best portrays this growing disaffection. South African Journalist R.W. Johnson’s scathing critique In South Africa, the reality is debt and corruption highlights how tribalism is growing in domination at the ANC. Part of his article reads;

“The country has become utterly corrupt under A.N.C. rule. After all, Zuma’s palace at Nkandla tells one how the President behaves. Civil servants, teachers, and the police are all massively corrupt. Community riots against poor service delivery occur once every two days. Mandela may join the A.N.C. up in heaven—but the party down below seems hell-bent”.

Nelson Mandela never had such grand allegations of corruption levied against him or his presidency; perhaps his greatest criticism in this regard is his silence, after he left power, to the problems of the succeeding leaderships. Those leadership problems- prevalent across Africa -also show that African leaders are in dearth of and desperately need to practice Madiba’s politics, which made Bill Keller of the New York Times remark him as a “capable statesman, comfortable with compromise and impatient with the doctrinaire”.

Africa needs leaders with Mandela’s integrity, patriotic focus, and most importantly his economic intelligence not built on personal gains but service to the people- all of the people (majority and minority), not some segments.

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