Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth
A FENCE divides the city of Nogales into two parts: Nogales, Arizona (US) on one side and Nogales, Sonora (Mexico) on the other.
The geography and climate are the same in both cities. The people mostly speak the same language, have similar ancestors, eat the same food and listen to the same music.
But the people in Sonora are dramatically worse off than the people of Arizona in terms of life expectancy, infant mortality, healthcare services, education, crime, roads and municipal services.
It is almost like the difference between North and South Korea: they have the same people, culture and language, but one is impoverished, corrupt and closed, while the other is a highly successful industrialised country where people enjoy among the highest living standards in the world.
These examples from books and research on the reasons states fail bring to mind the stark differences between the Western Cape and other provinces in South Africa, and between Cape Town and other metros.
Just like in the two parts of Nogales, there are historical elements at play, but they cannot fully explain the contrasts.
It primarily comes down to political and economic culture and institutions.
These are not just impressions; the statistics confirm it. The auditor-general recently found that only 38 out of 257 municipalities deserve clean audits: “Local government has been characterised by dysfunctional municipalities, financial mismanagement, council and administrative instability and crumbling municipal infrastructure."
Ratings Afrika's latest Municipal Financial Sustainability Index found that the Western Cape is by far the best-managed province, and the only one “whose municipalities are considered to be largely sustainable financially". Cape Town is named the top metro in the country, and the five best municipalities are all governed by the DA: Midvaal, Saldanha, George, Mossel Bay and Swartland.
The contrast, especially between Johannesburg and Tshwane on one side and Cape Town on the other, is shocking.
The appalling decay in these two Gauteng metros led Ferial Haffajee of Daily Maverick to use the term “micro-state failure" this week.
The outgoing national health ombudsman, Prof Malegapuru Makgoba, sharply criticised the political leadership of Gauteng last week, especially regarding healthcare services. “You have your best province run by Mickey Mouse. What can you expect? A service that is in shambles."
Shocking stories of mismanagement and malpractice in state hospitals nationwide regularly make front-page news, while state hospitals in Cape Town, George, Worcester and elsewhere in the Western Cape are mostly highly regarded.
Cape Town's unemployment rate is 16.2 percentage points lower than the national average and has decreased by four percentage points in the past year, while it has risen elsewhere.
The differences between the Western Cape and the rest of the country are undoubtedly a major embarrassment for the ANC.
The labour minister, Thulas Nxesi, recently lost his temper in parliament when questioned about this. “It can actually be argued that the Western Cape achieves much less than it should, given the abundance of resources you have," he said. Table Mountain and the sea are among these resources, he says.
Nxesi also said the Western Cape continues to benefit from apartheid. “It is a historical reality that the human resources of the other provinces, due to the homeland system, forced people in underdeveloped provinces to migrate and seek work in the Western Cape."
The other typical ANC argument is that Cape Town is only a dream city for white people and others in the middle class, but that the poor people, mostly black and coloured, are worse off than elsewhere.
Some of Cape Town's townships and informal settlements are indeed dire, but it is difficult to quantify whether they are worse or better than other metros. Mayor Geordin Hill-Lewis makes a strong case that Cape Town allocates a larger percentage of its budget to poorer neighbourhoods than other cities, and several DA leaders regularly proclaim that even the poorest are better off there than in other metros.
Hundreds of thousands of people have migrated from the struggling Eastern Cape to the Western Cape over the past two decades, a process that continues unabated.
The political instability with coalition governments in the Gauteng metros and Nelson Mandela Bay, in contrast to the stability of a single-party government in Cape Town, is surely a factor, although the decay began when the ANC still had a majority in these metros.
My impression is that Cape Town and the Western Cape are faring so much better because technocrats, rather than political opportunists, are taking the lead. It is the ANC's toxic cocktail of cadre deployment, political infighting, tolerance of tender manipulation and jobs for buddies that has tripped it up.
The election of two incompetent, inexperienced mayors for Johannesburg, first Thapelo Amad and now Kabelo Gwamanda, both from the minuscule Al Jamah-ah, shows that political considerations are more important to the ANC than governance.
I would define the politicians in control of South Africa's metropolitan authorities as classic political rent-seekers.
Hill-Lewis, Western Cape premier Alan Winde, and their teams are simply more management-oriented, purposeful and visionary than their ANC counterparts, focused on making the metro and the province as efficient, competitive and attractive as possible for investors.
Investment in infrastructure is a good example. Cape Town has budgeted R11bn for capital expenditure on infrastructure in its latest budget. Over the next three years, the city will spend more on infrastructure than Johannesburg and Durban combined. This is part of a larger plan to allocate R120bn to infrastructure expansion over the next decade.
The finance and economic opportunities MEC in the Western Cape, Mireille Wenger, recently presented an ambitious “growth for jobs" strategy which foresees a growth rate of between 4% and 6%.
Cape Town is also ahead of the rest of the country with its plans to become independent of Eskom.
The local election in 2026 may bring a bigger shock to the ANC than next year's general election.
♦ VWB ♦
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