The 2024 elections and beyond: Sakeliga’s strategy and what we will do next    

Dear Funders and Friends of Sakeliga,

I am writing about the recent political developments, what they mean for Sakeliga’s strategy, and what we plan to do next.

The national election has ushered in more fluid and competitive political dynamics. Most analysis is currently focussed on how this may lead to better government and state administration, but at Sakeliga we also ask how it affects our long-term strategic aim. In the increasing political complexity, we see opportunities not only to improve the government’s impact on the business environment but also to ultimately redefine the state’s role in the economy.

Because elections emphasise short-term political matters, it is easy to forget that the role of the state itself can, and at times must, be changed. Throughout its history, the state has both expanded and been rolled back, depending on the strength and authority of other organised sections of society able to think well beyond five-year election cycles.

At Sakeliga, we consider the coming decade of increasing political complexity an opportunity to reform governance, yes, but also to fundamentally renegotiate the state-business relationship. We will:

• **undertake government-directed and business-directed outreach,**establishing workable communication lines with select ministers and political parties, in the short-term participating in the proposed “National Dialogue” where conducive to our mission, and co-ordinating with other business and civil society organisations for greater combined impact;
• intensify our litigation to roll back or reform legislation and regulation on matters such as BEE, infrastructure, and security in an environment where united cabinet opposition is more difficult; and
• continue our projects to set up alternative structures for local chambers of commerce, international trade relations, and public security, because their success remains crucial for diminishing the dependence of the economy – and communities – on the state.

The formation of the new government is no reason to relax. On the contrary, businesspeople should intensify efforts to leverage its strong and its weak aspects to bring about faster changes that can have profound economic and social benefits for decades to come.

The new political landscape: opportunities for reform

With the ANC having lost its majority, the new government and parliament enter a more fluid and competitive stage. This shift offers scope for greater mutual checks and balances within the executive, between the executive and parliament, and between national, provincial, and local governments. Moreover, there are now parties represented in the cabinet who want constructive, market-orientated reforms.

Sakeliga sees this as an opportunity to drive reform efforts where possible and take advantage of the divisions within government where necessary.

ANC-opposition ministers and deputy ministers are surrounded by ANC-loyal ministers, DGs and staff, but if they can learn the ropes, obstruct or refrain from adhering to the most detrimental policies like BEE, streamline public administration, and be a voice for more market-friendly reforms, they would be providing an important restraining function on executive overreach.

The current cabinet is one of the world’s largest. Nearly one in five members of the national assembly are now ministers or deputy ministers. Such a large and politically fragmented body lacks cohesive executive authority – even productive and regular meetings will be a challenge. This feature can be leveraged to exert pressure on the cabinet from outside, such as through multiple comprehensive court cases.

For the foreseeable future, therefore, South Africa has a government that

• could potentially govern more effectively in certain areas,
• includes parties strongly opposed to much harmful ANC policy and ideology, and
• is less cohesive and more fluid.

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Opportunities abound for business communities acting in the public interest, contingent on the degree of external pressure they can apply.

The new political landscape: threats from ongoing state failure

Along with opportunities for reform under the new governing accord, we must also confront several important threats from ongoing state failure.

The new government, and certainly the state at large, still overwhelmingly reflects ANC influence and its business-unfriendly policies.

The ANC remains heavily dominant across the cabinet, holding the presidency and most key ministries. Out of 32 ministers and 43 deputy ministers, together with the president and deputy president, the ANC holds 75% of positions (the DA 15%, and other parties 10%). ANC deputy ministers and ANC-loyal directors general are present in all non-ANC-run departments. Meanwhile, 1.2 million entrenched government employees still bear the indelible mark of the ANC’s three-decade tenure.

Moreover, irrespective of party affiliation, ministers and deputies are fairly tightly limited to operating within existing — often harmful — legislative frameworks. Non-ANC ministers will undoubtedly seek to test these limits and obstruct clear policy harm but will have to tread cautiously or risk being ejected from cabinet.

Another constraint on pushing for concrete reforms is risking breakdown of the multiparty government. The ANC, who won only 40% of the vote, is likely to feel incessant and vociferous pressure from inside and outside of parliament not to allow influence from the likes of the DA and FF+. After all, two-thirds of voters on May 29th backed some variant of the ANC, and its most vocal factions will keep loudly reminding the government that they did not vote for business-friendly reforms.

As for legislation, the problem is that the country’s economic crisis stems not from what the ANC still plans to do, but from harmful laws piled up over the course of thirty years. The need to sustain the multiparty arrangement in the executive should serve as a welcome brake on the ANC’s legislative ambitions, but also frustrates urgently needed efforts to amend or repeal existing harmful laws.

These realities underscore the likelihood of persistent state failure and harmful interventionism in some very key areas. They necessitate comprehensive public-interest litigation – utilising the judicial branch of the state as best as possible to enable reform – and building alternatives to failing state, municipal, security, and diplomatic structures where necessary.

What this means for Sakeliga’s strategy

A glaring problem in South Africa is that the state wants to have a say over every aspect of the economy.

 There are clearly matters about which the state should ordinarily not be saying anything at all, like who to partner with, employ, or have as customers and suppliers. In areas covering trade regulation, property protection, infrastructure, and security, the state should either not be involved or at least stop monopolising.

For solving problems like these, elections are usually not enough. They distribute power within the state; they should not be relied upon to change the role of the state.

This is why a sound strategy for a good business environment must involve not only trying to make government better, but also redefining the state’s role where necessary, as has often been done in history. We should aspire to ensuring that the state stays out of business where it has no business, and to secure for businesspeople the long-neglected freedom to provide for themselves and the communities they serve, without having to ask the permission of state bureaucrats.

In the coming decade, Sakeliga will:

• undertake government-directed and business-directed outreach,
• intensify our litigation to roll back or reform legislation and regulation, and
• continue our projects to set up alternative structures for diminishing the dependence of the economy – and communities – on the state.

This mission transcends electoral shifts, demanding consistent, organised efforts to negotiate the state-business relationship for a thriving economy in the public interest. You and your fellow funding partners and friends of Sakeliga play an indispensable role in this effort. Your support is a worthy and vital investment in securing a prosperous future in the place we love.

Sincerely,

Piet le Roux

CEO

Sakeliga