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Mar 30, 2017

Bloomberg View - March 30, 2017: South Africa's Patience is Running Out:

The Editors

South Africa’s ruling African National Congress has a choice: It can help President Jacob Zuma, or it can help the country. Its survival as a respected national force depends on doing the latter.
Support for the ANC has fallen amid charges of corruption and incompetence. Now Zuma is embroiled in a struggle with his finance minister, Pravin Gordhan, and other cabinet members, claiming that Gordhan and his allies are seeking to undermine him. Zuma’s possible firing of Gordhan rattled investors, sparking talk of a downgrade of South African bonds to junk status -- a setback that would raise the country’s debt burden and deter badly needed foreign investment.
Underlying this recent volatility is a deeper malaise. Economic growth under Zuma has been anemic -- less than 1 percent last year -- and South Africa’s already high levels of unemployment have risen from 23.6 percent in 2009, when he was elected, to nearly 27 percent today. The national debt has doubled. State companies and agencies are in disarray. Business confidence has fallen, and the country has slumped in global rankings of competitiveness.
QuickTake South Africa
Lately, the plume of scandal that has followed Zuma from his first days in office has billowed into an all-encompassing cloud. Last year, for instance, South Africa’s top court ruled that his failure to repay taxpayer funds spent on upgrading his home violated the constitution. South Africa’s former graft ombudsman reported Zuma may have dispensed favors and sweetheart contracts to friends who do business with his son. Still to come is a possible judicial reinstatement of 783 charges of corruption, racketeering, fraud and money laundering.
Zuma’s response has been to fire up supporters with a toxic brew of populist proposals -- everything from strengthening the power of the president and banning foreigners from buying agricultural land to outright expropriation.
South Africa doesn’t need a stronger president. It needs to safeguard the integrity and effectiveness of its institutions -- its parliament, judiciary, and central bank. It needs to dismantle the patronage networks that sap its economic strength. It needs to tackle a dysfunctional educational system that puts unqualified teachers ahead of struggling students. It needs to reform labor regulations that make it harder to hire workers, and that privileges well-connected unions. It needs to maintain its free press and nourish a vibrant civil society that holds politicians to account.
Almost eight years of misrule suggest that neither Zuma nor anyone close to him is up to it. Voters may be coming round to the same idea: They delivered a warning in municipal elections last summer, rewarding the opposition with unprecedented gains. The government had better pay attention before their patience, not before time, is exhausted.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at