Exclusive Interview with Mthuli Ncube, professor of Public Policy at the University of Oxford and former chief economist and vice president of AfDB (African Development Bank Group)

Conducted in 7/27/2016 7 am PST via Skype by Jennifer Kwon 

Property of Franklin Templeton Investments

 

IMF projects SA (GDP) growth rate to be 0.1 percent in 2016-17. What do you think are the biggest obstacles to a slow economic growth of SA?

There are four main factors that I suspect to be the problem.

  • The overall anti-cooperative environment of the government, unions, workers, and firms hinders development and repels foreign investors.
  • There’s little room to expand employment opportunities. There’s little business opportunities for companies to expand and therefore it’s hard for them to employ more workers. The unions are also hindering the expansion of workers.
  • The government focuses more on redistribution than an accumulation of wealth.
  • Market volatility due to political instability under the questionable leadership of President Zuma (i.e., firing a reputable finance minister) has made foreign and domestic investors be more skeptical and hesitant.

What is the role of labor unions in SA labor market? Do you think they are improving the quality of life among workers?

I actually don’t think they improved workers’ conditions. If anything, they worsened the unemployment issues. The labor unions in SA are very powerful and have strong ties with the ruling ANC party. Union participation has been weakening and declining over the years, but their power would not go away anytime soon. What SA need is more jobs, but unions are hindering that process. More flexible labor policies can come from ANC later, but they are pretty adamant right now.

DA has been gaining more power at the local level. Do you think there’s a chance that DA or other parties would overrule the ANC in 2019 national elections?

The ANC party is most likely to win the 2019 national election and even later on because they are a broad, inclusive party with many alliances so it’s very hard to break in. But since ANC party is dominating on the national level, it can be more complacent at a local level, giving DA a chance to rule in some regions. DA party is likely to receive more votes on a provincial level and because it’s local and more intimate, DA is likely to deliver better. But the party is too small to dominate national elections.

I read articles on conflicts within ANC, particularly due to numerous corruption charges on Zuma. Is there any possibility of internal party breakages and would that affect ANC’s power?

The party breakages either during or after Zuma is very possible – it’s most likely to be labor unions breaking away and instead of joining other smaller parties. (It has happened in Zimbabwe and Zambia before) The unions are most likely to go to Economic Freedom Fighters (EFF). EFF has most favorable, radical leftist policies to attract unions, and the party has the potential to grow the most if they could attract unions and more black middle class from DA. Then, EFF might become powerful.

Would having Mmusi Maimane, the first black DA party leader, attract more black voters?

Certainly, having Maimane leading the DA helps in attracting black voters. Only the opposition calls him a sellout, which is expected.

Advertisements