South Africa: Zuma Blames 'White Control' For Economic Woes, While Bidding For Second Term

Speaking at the opening of a policy conference of the ruling African National Congress Party (ANC) on Tuesday, Zuma declared that the government needs to undertake radical measures to transfer more of the nation’s wealth to the black majority.

“The structure of the apartheid-era economy has remained largely intact,” Zuma told a large crowd of ANC delegates.

“The ownership of the economy is still primarily in the hands of white males as it has always been.”

He also warned that despite some gains made over the past 18 years, the deep-seated problems of poverty, unemployment and inequality posed long-term risks for South Africa.

Among other measures, Zuma’s ruling party has proposed that the nation’s key mining sector pay more in taxes to finance social spending and also wants to encourage state-owned enterprises to create more jobs.

“The time has come to do something more drastic toward economic transformation and freedom,” Zuma said.

Some in the ANC have long demanded that South Africa’s mining companies be nationalized, but there is disagreement within the party over this issue.

While some radical party members, like former Youth League leader Julius Malema, believe that state ownership of mines would ease high unemployment among black people, a research paper produced by the party itself earlier this year warned that nationalization of mines would bankrupt the state.

Other youth members of ANC have called for the state to confiscate white-owned farms, echoing language heard in the past in neighboring Zimbabwe, which led to violent seizures of white-owned land there by the government of Robert Mugabe.

There is indeed a deep racial economic chasm in South Africa that democracy has failed to fix. One half of the overall population (which is 80 percent black) remains trapped in poverty.

According to Statistics South Africa, the unemployment rate for blacks (29 percent) is almost six times the rate for whites (5.9 percent). On the whole, about one in four South Africans is jobless.

The London-based economic consulting firm IHS Global Insight estimates that whites in South Africa have an average income seven times larger than that of blacks.

Indeed, with the exception of Cyril Ramaphosa, the executive chairman of private holding company Shanduka Group and prominent mining executive Patrice Motsepe, almost all of the dominant business leaders in South Africa are white -- including Marius Kloppers, the chief of BHP Billiton, the world’s largest mining company; Brian Joffe, the boss of the Bidvest Group conglomerate; Jacko Maree, CEO of Standard Bank Group, Africa’s largest financial services conglomerate; Raymond Ackerman, the founder of retail giant Pick n Pay; and Nicky Oppenheimer, chairman of the mining giant De Beers Group and the wealthiest man in the country.

However, while Zuma may be partially correct in his assertion that the white minority exerts a disproportionate influence on the economy, he may be seeking to curry favor with the black population ahead of an election for ANC party leadership later this year. Whoever is the ANC leader is virtually guaranteed to win the next presidential election in 2014. A victory in that poll would keep Zuma in power until 2019.

“My initial impression is that President Zuma’s opening speech was primarily political – designed to win a second term – and mollify critics on the left – and the poor,” said Pat Thacker, Africa Analyst for the Economist Intelligence Unit in London. “It’s also convenient to still blame apartheid for the government’s failings -- although that position is getting a little dated now.”

Thacker adds, however, that while the issue of nationalizing the mining sector will not be addressed by the government, it may seek to impose higher taxes on mine companies and also speed up efforts at land reform.