The news that communications minister Mondli Gungubele has extended the Post Office’s monopoly over small items – a monopoly that is widely ignored – shows once again that the ANC is bereft of ideas and is tired of governing South Africa.
Gungubele on Monday extended the exclusivity period the Post Office nominally enjoys over the delivery of sub-1kg parcels for another year – to 1 April 2025. There’s just one intractable problem: the monopoly is unenforceable. It will do nothing to save the Post Office.
The Post Office, like South African Airways and so many other state-owned enterprises, is broken. It cannot be saved in its current form. Like so many other zombified SOEs that have been driven into the ground over the past 15 years of corruption and mismanagement under successive ANC administrations, the Post Office has been hollowed out and destroyed. It can’t be saved without (yet another) multibillion-rand bailout, which the overstretched national fiscus cannot afford. There is no money left in the kitty.
So, two days before a crucial election in which the ANC is likely to lose its majority for the first time (and deservedly so), what is the minister of communications, a career ANC politician, to do about the bankrupt Post Office? Announce it will be privatised? Call in the help of private investors? Of course not. Instead, Gungubele doubles down on what demonstrably does not work – and will not work.
There’s a toxic ideology to blame as well, of course: the ANC is a socialist party, schooled in the sort of Soviet-era ideology that only ever leads to economic failure and misery. It distrusts business to its very core. It believes it can fix the country – and the mess it’s made of the economy – if only it could build a “capable state”, a concept that seems to forever elude it. With a capable state, anything is possible, including the smart cities and bullet trains that President Cyril Ramaphosa is so fond of droning on about in his state of the nation speeches.
The ANC thinks a state-led approach to economic development, rather than unleashing the power of free markets, is what will deliver economic growth. It won’t, and never will, even if the ANC suddenly proved itself to be a competent steward of SOEs.
The Eskom example
State-owned companies will simply never be as effective as private enterprises operating in competitive markets in delivering products and services efficiently and at the right price.
Yet ANC cabinet ministers, led by public enterprises minister Pravin Gordhan (now thankfully retiring), have spent years trying to prop up failing SOEs on the expectation that the vast damage that has been inflicted on them can simply be reversed.
South Africa is in a dreadful state leading into Wednesday’s election. The ANC has caused enormous damage to SOEs, and the only way out for many of them may be to privatise them – by stealth, if necessary. That’s what’s happening at Eskom: the energy sector is being liberalised because the ANC has (begrudgingly) come to realise that it can’t fix the energy disaster it created. In time, Eskom will become a shadow of its former self as private capital muscles it out of the way. In the process, and assuming these liberalisation efforts aren’t allowed to stall, South Africa’s long-running energy crisis may actually be solved.
Read: State extends Post Office monopoly that’s already widely ignored
Maybe that will convince the ANC – assuming it is able to form the next administration – to expand these market liberalisation efforts to other sectors. I wouldn’t hold my breath, though. The modest victories that have been achieved have been through work done in President Ramaphosa’s office; these could too easily be reversed if the ANC removes the president from office following a poor electoral showing this week. And these energy reforms – and more like them – should have happened in the 1990s already, before load shedding was allowed to become a full-blown national crisis.
The postal services sector has already effectively been liberalised, despite the government’s nonsensical efforts to shore up the Post Office’s monopoly. The horse has long bolted: the delivery of all parcels, regardless of size, is capably handled by private companies. Any attempt to enforce the Post Office’s monopoly is misguided, would severely damage the economy – including the rapidly growing e-commerce industry – and should be fiercely resisted. It’s bad legislation: bad for the economy, bad for consumers and ultimately bad for job creation.
The Post Office, like so many other SOEs, has failed. Attempting to resuscitate it through taxpayer-funded bailouts will only do more damage to the country in the long term.
Gungubele and his cabinet colleagues ought to hang their heads in shame over this state of affairs. One hopes voters will use the ballot box on Wednesday to teach them a lesson they won’t easily forget. — (c) 2024 NewsCentral Media
- Duncan McLeod is editor of TechCentral. Follow him on X