At the Heart of the Government’s Begging Bowl is a Lack of

According to a note from South Africa’s Treasury last week, “The government of South Africa and the World Bank have signed a $1.5 billion development policy loan agreement aimed at supporting South Africa’s efforts to achieve inclusive growth by tackling infrastructure constraints, the primary barrier to job creation.”

The loan is the fourth such measure and, according to the government, marks “continued partnership with the World Bank towards addressing South Africa’s pressing economic challenges [and] will help South Africa implement necessary interventions and reforms [as] part of the government’s broader efforts for continued momentum on structural reforms.”

Those are nice words, but the need for the loans only arises because South Africa’s government refuses to pursue the actual structural reforms needed to free up investment and thereby drive higher rates of economic growth. Indebting your economy to the World Bank to fund infrastructure is what banana republics do when they run out of money, and is offensive to the idea of the kind of country South Africa should be.

With its skills and entrepreneurial base, sophisticated infrastructure and technology, and deep financial markets, there should be no need to pass around the begging bowl.

The whole thing comes down to a lack of self-respect.

Freshly out of prison, Nelson Mandela warned his party against exactly this kind of thing, arguing that it would threaten South Africa’s sovereignty and that the country needed instead to attract the investment required to grow its economy in order to secure its own revenues and finances on terms it controlled. Instilling that sentiment into the government was arguably his greatest contribution as South Africa’s president, as it made possible the steep increases in investment, growth, and job creation recorded after 1994, even as government debt levels were halved and the budget deficit tamed. Reconciliation, with which he is typically most credited, rested on that underlying progress.

Borrowing is not a problem when you are doing it on your own terms and when it is backed by strong growth and a strong revenue outlook. But doing so to paper over the cracks is a very different thing.

More and more, past African National Congress leaders have come to lament the state of the country for reasons ranging from corruption to ineptitude and wholly counterproductive policies. To that list they should add a lack of self-respect because that is the foundation that underpins it and it would see a government write up winning handouts from rich Westerners as a sign of national progress.