Private business is the ANC’s biggest enemy – Thabo Mbeki

South Africa’s government refuses to collaborate with the private sector to solve the country’s problems because the ANC’s main ideological enemy is private business. 

This is the view of former President Thabo Mbeki, who explained the ANC’s entrenched anti-capitalism stance in a recent presentation at the National Democratic Revolution (NDR) Seminar. 

Mbeki’s high-level positions within the ANC at the end of apartheid and the early 2000s gave him significant insight into the party’s relations with private business. 

Historically, the ANC has seen private business as a key enabler of the apartheid regime and deliberately took a socialist stance to signal its opposition to private capital. 

The party has used heavily socialist, anti-capitalist, and anti-imperialist rhetoric to explain its policy positions and inform its view of the economy. 

This comes back to its official economic blueprint, which is the theory known as the National Democratic Revolution. 

Formulated alongside the South African Communist Party, the theory outlined the two-stage revolution model that underpins the ANC’s policies:

• Stage 1 (The National Democratic Revolution): The immediate goal is to eliminate the legacy of apartheid, achieve racial equality, and deracialise the economy. In this stage, the ANC believes it must actually foster a “patriotic black bourgeoisie” to break the monopoly of white-owned capital.
• Stage 2 (Socialism): The ultimate, long-term goal is the transition to a socialist society once racial economic dominance is dismantled.

Currently, the ANC says South Africa is still in Stage 1, which justifiies it working within a capitalist framework to create a black middle class. 

The embrace of capitalism and free markets was championed by Nelson Mandela and Mbeki in the late 1990s and 2000s. 

This was seen as necessary to avoid South Africa going bankrupt and to drive economic growth to fund the ANC’s Reconstruction and Development Plan. 

The period was immensely successful, with the government’s financial health steadily improving and economic growth accelerating. 

By the end of Mbeki’s tenure, South Africa had posted its first budget surplus in 2008/09 and had experienced consecutive years of economic growth above 4%. 

However, the ANC’s ideological roots still lie within socialism and the NDR, with Mbeki’s period being seen as a stepping stone towards the second stage of the revolution. 

Thabo Mbeki on private capital

Mbeki explained that the ANC’s rigid anti-capitalist stance has made it extremely difficult for the government to work with the private sector. 

Companies in South Africa distrust the ANC government because of its socialist, anti-capitalist rhetoric, which undermines collaboration. 

Mbeki faced his party’s anti-capitalist anger when he was president and was implementing his famous Growth, Employment, and Redistribution (GEAR) policy. 

This plan aimed to deregulate the economy, shrink the state, and create an environment friendly to private investment and capital. 

The ANC’s alliance partners, such as the Communist Party and the trade unions, were strongly opposed to this policy plan, along with senior members of the party. 

“When we went into this matter, we found out there was an ideological fixation, and they were claiming that it comes from Luthuli House that the enemy of the NDR is private capital,” Mbeki explained. 

“Therefore, we were told that we can’t tell people that in order to achieve these objectives, you must cooperate with these people. The enemy of the NDR is private capital.”

According to ANC theory, the opposition to Mbeki was not wrong, as the NDR was explicitly anti-capital. 

“We were told that if you remove the state and weaken the state, you guarantee the perpetuation of the legacy of apartheid,” Mbeki said. 

“A strong, powerful, capable, ethical state is critical. It’s critical to the achievement of the objectives of the NDR. Without it, we are not coming to achieve those objectives.”

However, the NDR also noted that it will be necessary to collaborate with private businesses for a period to create a black middle class that is supportive of the ANC. This would then create the conditions for a socialist revolution. 

Mbeki said the ANC has been inspired by the Chinese Communist Party in how it has managed to leverage private capital to drive economic growth while maintaining socialist political control. 

“There are huge volumes of capital which are in private hands here in the rest of the world. Capital in the rest of the world globally is in private hands,” Mbeki said. 

“And I’m saying the Chinese Communist Party understood this and said we need that capital to grow our economy and create conditions where socialists can remain in control.”

Mbeki said the same should happen in South Africa, with the government proving over the past 15 years that it cannot drive economic growth. 

“We’re not going to get the sort of growth rates that we need and therefore the investment levels we need if you say only the state can do things,” Mbeki said. 

“I’m saying that the government has no possibility to generate the resources, the volumes of capital that we need, and therefore, when we talk about NDR, the question arises, what’s the relationship between the democratic state and capital.”