Black Friday arrived on these shores in triplicate last week.
First there was the chaotic retail therapy which saw smashed shopping mall windows, crashed e-commerce websites and big bargains as South Africans went shopping.
Second there was Robert Mugabe’s inglorious end as the 93-year-old despot gave way to a 75-year-old successor with, to be diplomatic, slender democratic credentials.
Mugabe’s decades of tyranny at least defied the outcome to which Thomas More – nemesis of King Henry VIII – gave voice more than 500 years ago.
Mugabe, like More, is a Catholic, but unlike More, he is no saint. The Zimbabwean dictator disproved More’s prophesy: “Sola mors tyrannicida est” – death is the only way to be rid of tyrants.
The third, and for long-suffering South Africans, perhaps the worst instalment of Black Friday arrived late in the evening when we received our credit downgrade to junk status from S&P Global Ratings.
There is a common thread between all three Black Friday events.
On the Mugabe presidency’s end – and we can only hope his successor is not even worse – there is a direct connection between them and us. Specifically, how and when things started to go pearshaped in our northern neighbour and our own dire current financial straits. Both S&P Global Ratings and another rating agency, Moody’s (who have given us a slight stay of execution), point it out in their ratings reports.
We associate Mugabeism with rigged elections, violence against his opponents and farm invasions. But there is a lesson, perhaps several of them, which points to the connection between his great age and his economic immiseration of a once prosperous country.
During one of my visits to Zimbabwe in the mid-2000s I met, in the company of its opposition leader Morgan Tsvangirai, the then very activist ambassador of Germany. He made a telling point, and this when Mugabe was a mere stripling of 80 years old. The diplomat advised that the way a dictator behaved depended on an actuarial calculation. A young dictator, he suggested, will generally leaven doses of terror with doses of prosperity to stay in power. However, a ruthless tyrant, near the end of his regime, will be unconcerned with the long-term implications of his actions and will hold onto power by any means possible.
Precisely this account was updated in the IMF report on Zimbabwe published last week in the Wall Street Journal. It shows the spectacular decline of the one-time breadbasket of Africa, which in the mid-1990s, in the first chapter of the Mugabe presidential era, was the second-most industrialised nation in sub- Saharan Africa and one of the continent’s only net grain exporters. Then the assault on farms “triggered a collapse in the country’s economic output”. This was aggravated by state-funded payouts to Mugabe’s constituency: war veterans and government workers. In the mid-1990s 10% of the population was employed by the state. Today, government wages and salaries consume 70% of the state budget.
Since there is a contest in South Africa to see, as between Nkosazana Dlamini-Zuma and Julius Malema, who can out-Mugabe the other on confiscating land without compensation, it is worth pausing at the comment Harare economist John Robertson made to the Journal.
He said: “The biggest of the government’s faults is that they took the land off the market. That market value used to support loans and businesses.” The land programme “also tore through bank balance sheets as land held as collateral for loans was rendered largely worthless”.
Radical economic transformation indeed.
The other Friday surprise – or not, since it was much expected – was the hard word from S&P Global Ratings. It cites upfront “a momentous political agenda [which] has overshadowed policy making, despite the deteriorating economy and weakening public finances”.
Broadly decoded, that means ballooning government debt, inflation-plus increases for government workers and reckless populist policies point in a Zimbabwe-style direction.
We certainly haven’t arrived there yet, but the road signs illuminate this cul de sac. Yet the same report also offers a morsel of hope. Looking to the ANC conference next month, it suggests:
“The new leadership could bring confidence and faster implementation of key reforms. Who that leader is . could determine South Africa’s future economic performance.”
So let’s see what the 5000-plus ANC comrades decide next month at Nasrec. Choose the right person to set the economy to rights. Or choose the wrong one, and your bargain buys on Black Friday might be the last of their kind you can afford.
- Leon (@TonyLeonSA), a former leader of the opposition, now chairs Resolve Communications and is a senior adviser to K2 Intelligence of London
- Featured in The Times