The Threat to Mandela's Economic Legacy

Nelson Mandela, who died on Dec. 5, emerged from 27 years in prison in 1990 pledging to seize South Africa’s mines and banks. Instead, his government slashed spending and courted foreign investors, paving the way for the longest period of growth in the country’s history. “Only a Mandela could have realigned the African National Congress’s economic policy from the mindset of the 1950s to the world of the 1990s and beyond,” says Robert Schrire, a politics professor at the University of Cape Town. “He recognized that for the poor to prosper, the rich had to feel they had a future in the country.”

Yet Mandela’s legacy of economic stability is coming under attack as the country struggles. The jobless rate is 24.7 percent, while average earnings for black households are a sixth of those of their white counterparts. The ruling ANC’s youth wing last year waged a campaign to nationalize banks and mines, the very policy ditched by Mandela in 1994, and poor communities have staged a series of protests prompted by a lack of housing and basic services. The rand has fallen 18 percent against the dollar this year, making it the worst performer among 16 major currencies tracked by Bloomberg.