Neglecting existing infrastructure generates higher long-term costs.
South Africa’s industrial decline is accelerating. State-owned enterprises that once drove economic transformation now epitomise institutional failure. Eskom’s power cuts cripple manufacturing. Transnet’s rail network deteriorates while ports struggle with backlogs. The Industrial Development Corporation, established to finance industrialisation, limps along with a compromised balance sheet.
This infrastructure was built on the vision of Jan Smuts, prime minister from 1919 to 1924 and 1939 to 1948. While his commitment to racial segregation was morally reprehensible, his approach to economic development offers lessons for today’s policymakers grappling with sluggish growth and persistent inequality.
Smuts understood that South Africa needed to transcend its role as a commodity supplier to Britain’s industrial economy. His developmental state model, combining strategic state investment, international partnerships and technocratic competence, transformed the country from a mining enclave into Africa’s most sophisticated industrial economy.
The foundations he laid endured for decades. The Electricity Supply Commission (later Eskom) provided cheap power that enabled large-scale manufacturing. The Iron and Steel Corporation (Iscor) supplied essential inputs for further industrialisation. His successors built on these foundations, establishing Sasol for synthetic fuels and the Council for Scientific and Industrial Research.
Today, these institutions are shadows of their former selves. More troubling, the country appears to have lost the capacity for the long-term thinking that created them.
South Africa’s economic performance tells a sobering story. Growth has averaged just 0.8% annually over the past five years, well below the rate needed to reduce unemployment or meaningfully tackle poverty. The Gini coefficient, measuring income inequality, has remained stubbornly at 0.66 since the 1990s, making South Africa one of the world’s most unequal societies.
The benefits of black economic empowerment (BEE) policies have accrued primarily to political and economic elites, while the rest remain excluded from meaningful economic participation. The debate over the benefits of BEE has resurfaced, particularly concerning its mechanisms for wealth distribution. This has been highlighted by the recent scepticism surrounding the potential introduction of Starlink to South Africa, with concerns about exceptions to BEE compliance.
Nonetheless, it is undisputed that, as a result of transformative policies, South Africa’s black middle class has surpassed the white middle class. This shift is not accidental but rather a product of deliberate post-1994 policy design. But the mechanisms of BEE need to be revisited to broaden its pool of beneficiaries.
Moreover, the state capture scandal, where politically connected individuals systematically looted public resources, represents the nadir of this failure, which has been accounted for by the collapse of Transnet and Eskom, the consequences of which are signified by inefficiencies thereafter. Despite the Zondo state capture commission spending more than R1 billion investigating the theft, many implicated figures retain positions of influence.
Why do voters continue to elect leaders who have demonstrably failed them? The answer lies in how persistent unemployment, poverty and inequality make populations vulnerable to manipulation by the very politicians who created these conditions.
The contrast with Smuts’s approach is stark. He prioritised competence over patronage, choosing Hendrik Johannes van der Bijl, a German-educated engineer with US business experience to integrate the country’s fragmented electricity supply. Van der Bijl’s technical expertise, combined with political backing, enabled the creation of a power system that underpinned decades of industrial growth.
Today’s leaders talk about infrastructure development but have forgotten a crucial lesson: maintenance matters more than new construction. Neglecting existing infrastructure generates higher long-term costs than building new capacity. Johannesburg’s collapsing central business district exemplifies this short-sightedness. Years of deferred maintenance have created a crisis that will cost far more to resolve than it would have cost to prevent.
The rot runs deeper than poor maintenance. It reflects a broader failure of vision and leadership. Where Smuts aligned South Africa with international partners to attract investment and expertise, contemporary leaders often prioritise political survival over economic transformation.
South Africa does not need to resurrect Smuts’s racial ideology; his vision of white supremacy was both morally bankrupt and economically counterproductive. But it needs his approach to state-led development, clear vision, international partnerships, infrastructure investment and, above all, competence in execution.
The formation of a government of national unity after the 2024 elections suggests political leaders recognise the scale of the crisis. The question is whether they possess the vision and competence to address it.
As Smuts understood, South Africa’s prosperity depends on reliable electricity, efficient transport and industrial capacity. These foundations are crumbling. Without urgent action to rebuild them, the country risks becoming a case study in how great institutions can be destroyed by poor leadership.
The blueprint for revival exists in South Africa’s own history. The question is whether anyone has the courage to follow it.
Ashley Nyiko Mabasa holds master’s in economic and labour sociology focused on energy policies and master’s in public policy and governance focused on data governance, and is co-chairperson of the Brics Youth Council.
