Western Cape’s Economic Secessionism: Post-2024 Elections in South Africa Outcomes and Implications

With the parliament’s first sitting imminent on 14 June 2024, the pressure is on the ANC as it strives to deliver on its commitment to form a government of national unity (GNU). It is a foregone conclusion that a broad coalition with no ‘national’ status will comprise the ANC, the DA, and the smaller IFP. This situation presents a critical opportunity for the DA to push for the Western Cape’s economic secessionism, an aspect less discussed than political secessionism.

The discourse around Cape secessionism has predominantly centred on political independence, yet the equally significant notion of economic secessionism remains overlooked. Emerging as the overall winner in the post-2024 elections era, the DA stands poised to leverage the GNU arrangement to actualise this less scrutinised but profoundly influential objective. Unlike its political counterpart, economic secessionism focuses on achieving greater economic autonomy and control over regional resources.

Achieving economic independence from the rest of South Africa is the ultimate goal, reversing the unification goal of the Union of South Africa in 1910 that gave the white settler community over the country’s indigenous population. Interestingly, the union of white tribes occurred at the expense of the landowning and franchise-holding black elites (‘amazemtiti), who then formed the ANC in 1912 to negotiate a seat for them on the table. Just over a hundred years later, black elites have finally achieved this goal, and now their interests are served.

Maybe that is not exactly what Cecil John Rhodes had imagined, but the country’s petit bourgeoisie has secured a seat at the table at the expense of the black majority. However, white interests must still be served in one form or another. This implies that the Western Cape will autonomously manage its economic affairs without reliance on or interference from Pretoria. This encompasses control over fiscal policies, trade regulations, natural resource management and economic development initiatives, allowing the province to tailor its economic strategies to its unique strengths and needs.

To support these assertions, the DA has already outlined key priorities in its negotiations for a coalition government with the ANC, focusing prominently on constitutional protection and decentralising national and provincial powers. It also emphasised safeguarding the Bill of Rights and the independence of the SA Reserve Bank while seeking multiparty input in budgeting processes traditionally controlled by the ANC-led national government.

Additionally, the DA aims to limit the budget deficit, supports economic reforms like Eskom unbundling and land ownership reforms, and pushes for devolution of powers to provinces, including control over the police and passenger rail services in the Western Cape. In March 2024, the DA gained the National Treasury’s tacit support for its Responsible Spending Private Members’ Bill. If passed, the Bill will contribute towards stabilising debt and public spending.

• Political secessionism versus economic secessionism

At a superficial level, there is a view that “only by seceding from the mess in the rest of the country can the Western Cape reach its true potential.” The Western Cape independence movement, known as CapeXit, advocates for the secession of the Western Cape from South Africa. It posits that the Western Cape can only reach its true potential by seceding from the broader South African context, perceived as mismanaged and economically stagnant.

Notwithstanding their clashes in political form, political and economic secessionisms share racist, liberal and economic goals.

Racism often underpins these movements, as some factions within the secessionist discourse advocate for a separation that would ostensibly benefit specific racial or ethnic groups. Economic goals are also at the forefront of both political and economic secessionism. The belief is that gaining control over taxation, budgeting and economic policy could lead to a more prosperous and self-sufficient Western Cape. The GNU is a new pact between the ANC and the Friends of the Natives, riding on the DA’s subliminal racism and denoting both in premise (cause) and outcome (effect).

The GNU is centring the notion of white supremacy: media and other sections of society propagate an extremely troubling narrative that the DA and or whiteness are the primary solution to the country’s economic woes, strategically and fiscally. Therefore, it is not surprising that the liberals insist on having a banker as a finance minister. Most people do not seem to realise that this seemingly harmless suggestion is much weightier since it renders those of the blacker race incapable of charting a macroeconomic and fiscal path for South Africa.

Liberalism, particularly in its classical form, underpins the motives of the DA and political secessions. They argue that breaking away from the national government would create a governance model that prioritises individual liberties, limited government intervention and free-market principles. Although there are questions about the province’s non-white population, this liberal agenda presumably seeks to create a more responsive and accountable political system that can better serve the interests of the Western Cape’s residents.

Martin van Staden, head of policy at the Free Market Foundation, argues that liberals should support Cape independence if it leads to a society characterised by greater individual liberty, limited government, and open commerce. Conversely, they should oppose it if an independent Cape fails to uphold these principles. Van Staden preposterously claims that mainstream Cape independence groups promote non-racialism, aligning with liberal values, but challenges remain regarding border and immigration policies.

In addition, Van Staden emphasises that the desirability of Cape independence should precede considerations of its practicality. Liberals should prioritise whether Cape independence would promote liberty better than the current South African state. If an independent Cape can demonstrably enhance individual freedoms, economic opportunities, and limited governance, liberals should support it.

• Secession from an economic perspective

In Secession from an Economic Perspective: What is Living and What is Dead in Economic Interpretations of Secessionism?, Lydia Cox argues that regions seeking independence must demonstrate their ability to sustain themselves economically, covering essential expenses such as public services, infrastructure, and social welfare. She adds that the outdated assumption that smaller regions cannot thrive economically has been challenged by successful examples of small states thriving in the global economy through trade and specialisation.

The DA’s interest in the GNU is the ‘secession of the rich’ not just in the Western Cape but also across the country. Secession by a wealthy province like the Western Cape stands to cripple social programmes for poorer areas. While some see this as a violation of solidarity, arguments for distributive justice fail to prevent it. Separatists feel they do not owe special duties to their compatriots, but a fair separation requires them to share some of the public debt.

In July 2023, Daily Maverick’s Velani Ludidi reported that the DA in the Western Cape is forging ahead with its plans to push for federal autonomy in the province. Fiscal autonomy would grant the Western Cape the power to collect and allocate its taxes and independently determine public spending priorities. This includes establishing its own financial regulations, banking systems and currency policies, separate from national directives.

During its congress in April 2023, the party resolved to advance its Provincial Powers Bill, aiming to empower provincial and local governments by devolving national powers to them. At the same time, the DA said the Powers Bill “will not separate the Western Cape from the rest of South Africa but from an ANC failed state.” With the GNU in place, the ANC appears to be aligning itself with a toxic partner with questionable motives.

The DA reported that it would seek comments on the Bill from the national government, municipalities and any other affected state organ. In return, the National Treasury offered to work with the DA on fiscal anchors, suggesting it already exerts some serious influence in the GNU household. An era of serious austerities is in the reckoning that could cause long-term damage to people and the economy. However, evidence from the UK suggests that austerity has failed to reduce the debt-to-GDP ratio.

• Economics for an enclave

Furthermore, the DA detailed how it wants full control of the following national competencies: policing, public transport and rail, energy, trade and harbours. Alan Winde announced that the Western Cape will be the first province to be load-shedding-free in South Africa, aiming to generate 5,700 MW by 2035. In addition, he said that there were also “numerous renewable energy projects across the province, which are helping us to reduce our reliance on Eskom.”

Trade and investment policies are another critical aspect of economic independence. The DA wants to drive the Western Cape to negotiate and enter into trade agreements with other countries or regions, fostering international trade relationships that benefit the local economy. For example, the US Consulate General in Cape Town and the Western Cape government launched a collaborative Trade and Investment Promotion Partnership in 2021.

The DA wants a separate dispensation of labour laws and policies in the Western Cape. It believes labour regulations should support job creation by democratising labour negotiations, improving hiring processes through changes to the Labour Relations Act, adapting to temporary work realities, and reducing regulatory burdens on small businesses. The aim is to challenge large unions, streamline hiring, support job creation potential in temporary work and ease constraints on small businesses.

Additionally, the DA supports shifting the responsibility for passenger rail and policing functions, both currently managed by the national government. In 2022, then-Community Safety and Police Oversight MEC Reagen Allen stated that the national government had failed communities in its management of SAPS and demanded that the province be allowed to run its police department outside of SAPS. Similarly, the City of Cape Town sought to take over the passenger rail service from PRASA.

However, the national government has repeatedly rejected the DA-run Western Cape government’s requests for more control over the police and rail sectors. This situation could now easily change with the formation of the GNU.

• Possible challenges?

Significant challenges could arise in the DA’s pursuit of Western Cape’s economic independence, along with its sponsors. The DA’s version of federalism entails taking charge of foreign and trade policies, which countries like the US treat as sacrosanct national competencies. This implies that navigating new trade agreements and diplomatic relationships within Africa and internationally would be crucial. The Western Cape would need to forge separate diplomatic ties and ensure continued cooperation with the rest of South Africa.

The creation of a not-so-national GNU involving the ANC, the DA and the smaller IFP could have severe ramifications for the country’s marginalised black majority, whose votes and hopes could now boomerang back and hurt their chances of freedom, prosperity and justice. Any form of economic or political secession should be opposed at all costs.

Dubul’ inyanga!!