The unbelievable cost of South Africa’s bloated public sector

South Africa would be significantly more economically viable if it did not have to carry a civil service sector that far exceeds the country’s needs in numerical terms. This is one of the many things one learns from R.W. Johnson’s candid, if sometimes completely disconcerting recent book, How Long Will South Africa Survive? The Looming Crisis (Jonathan Ball Publishers, 2015). Separated by his earlier book with the same title (except for the second part) by almost forty years – where the first one assessed the country’s increasingly grim prospects under the apartheid regime – the present text was provoked by similar considerations, given the intimation of manifold factors impinging (mostly negatively) on its likelihood to “survive”.

Johnson contrasts the historical context of his first book on South Africa’s survival with the present context and devotes significant space to the reconstruction of Jacob Zuma’s “world”, KwaZulu Natal, as well as on the ANC under Zuma’s leadership, the “ethnic” coup at Mangaung, the new class structure that has emerged in the country, the (perhaps surprising) fact of the “repression” of economic activity by the state and on various alternatives facing South Africa. The book is too densely packed with information and analysis to discuss cogently in the limited space of a blog post, which is why I want to concentrate here on one of the most serious threats to a stable South African future, namely the degree to which a top-heavy public sector drains the fiscal coffers in more than one way.

Johnson’s discussion of what he calls the “astonishing public sector” forms part of the chapter on “The new class structure”, which is pretty disturbing in its entirety, given the author’s exposé of what all South Africans (outside of the “culture” at stake) intuitively, with more or less information at their disposal, know to be “the ruling culture of theft” (Johnson’s phrase, which calls a spade a spade, instead of referring rather euphemistically to “corruption”). Johnson quotes Mamphela Ramphele (p. 111) who sums things up aptly in her remark: “We don’t have leaders, instead we have thieves. The corruption starts at national level with a President who builds himself a palace and doesn’t declare his wealth to the people”.

The choice of adjective to describe the public sector, namely “astonishing”, is well chosen – as one reads further in this section, your eyes literally widen with sheer astonishment at the information that this tireless historian and erstwhile Oxford don has unearthed – and this despite the fact that one has always been aware that there is something rotten in the state of South Africa. It is the extent of the rot that is astounding, and the brazenness on the part of the people who are implicated in it, without any sign of letting-up. By the time you reach the end of the chapter, you are actually astounded by something else – that, this bewilderingly destructive set of anti-social economic practices notwithstanding, South Africa is still chugging along. Well, sort of.

It is within this context that Johnson elaborates on the public sector, which the ANC has considerably expanded with a view to providing highly paid jobs to its “cadres”. Here I must quote Johnson (p. 113): “The figures are breathtaking. Take, for example, the top level of the elite. In 1973 [under the Nationalist apartheid regime] there were 18 ministers, 6 deputy ministers and 18 directors-general. By May 2014 there were 35 ministers, 38 deputy ministers, 159 directors-general and an additional 2501 chief directors and 7782 directors, posts for which there was no exact equivalent in 1973. Moreover, all of these posts are now far more highly paid, not just in nominal but in real terms. A similar and startling inflation has taken place at provincial and municipal levels where the elected members and officials and their staff enjoy salaries undreamt of by their predecessors – and there are now nine provinces in place of four. In addition, between 2008 and 2011 national and local governments spent R102 billion on consultants, many of whom were hired to do civil servants’ jobs for them”.

I would have been tempted to preface the last sentence with “To add insult to injury…” – something that might have crossed Johnson’s mind, but was probably omitted out of kindness. Doesn’t it beggar the imagination to think that the very government which has the gall to inflate civil servants’ ranks in such a completely unsustainable manner flaunts its disregard for the legitimate social and economic needs of other citizens by hiring additional people to do their jobs for them? (No prizes for guessing why – read the book if you are not sure.)

Johnson does not pull his punches when it comes to uncovering the sorry mess in which this country finds itself, including the reasons behind the ostensibly unstoppable growth of public sector organisations, which entails an accompanying growth in salary expenditure. However, he is not blind to the enormous pressure exerted on the leadership of these organisations (and government in general) for higher salaries and additional positions for friends and family. The result is unavoidably that many redundant people draw salaries while doing precious little work.

In the process, many underqualified people, who commit plagiarism to inflate their (falsified) CVs are appointed – Johnson mentions several high profile individuals among these by name (p. 113), including the SABC Chief Operating Officer, Hlaudi Motsoeneng, who was found to lack a matric, despite which he increased his own salary thrice in one year. He also lists the chairperson of the SABC board, Ellen Tshabalala, who lied about having a degree, and the similarly unqualified Dudu Myeni, chairperson of SAA. And, as a good historian, Johnson backs up his claims with documentary evidence.

The result of all this overspending on the civil service is that areas that require highly skilled personnel and specialised resources within state departments tend to be neglected (Johnson mentions the forensic department of the police) to accommodate the salaries of the growing “black bureaucratic bourgeoisie” (p. 114). Another example of this says it all: In 2014 DA-run Cape Town employed 54 financial managers and 348 engineers, while ANC-run Johannesburg employed 713 financial managers (exceeding 13 times the number in Cape Town) and 211 engineers. Johnson’s explanation is politically incorrect (one is not supposed to say these things!), but to the point: “Engineers are mostly white, highly qualified and hard to fake. Financial management is, however, a far looser category and almost anyone who has basic clerical skills might qualify” (p. 114).

Nevertheless, despite the increasing pressure on state resources (tax money contributed by SA citizens), the hiring of civil servants has continued unabated in the guise of “creating jobs”. Johnson elaborates (p. 114): “Thus in the first quarter of 2013 an additional 44000 public servants were recruited, bringing the total to 3.07 million or 22.6 per cent of the total labour force. In all, 250000 extra personnel have been added to the government payroll since 2005. At the same time, the number of private sector jobs has been shrinking, so in effect a declining but productive private sector is being more heavily taxed in order to swell an unproductive public sector. This is the economics of the madhouse”.

To confirm this insanity, consider that, by 2009, the public sector’s salaries amounted to almost 40% of government expenditure, and by 2010 these salaries were nearly 45% higher than comparable private sector salaries (p. 115). Although, for a variety of reasons, I am no friend of capitalism, anyone alive today should know that, because we live in a capitalist world, you have to acquaint yourself with the way neoliberal economies operate, if you want to survive (simultaneously observing the ecological conditions for such survival). Clearly, this is not the case with the South African government – even if some people in the ANC, like Trevor Manuel and Pravin Gordhan, have displayed such knowledge, the government juggernaut seems to be hell bent on running ship South Africa on the rocks of economic ruin. Johnson appears to be right, then, that “South Africa can either choose to have an ANC government or it can have a modern industrial economy. It cannot have both” (p. 243).