This article was first published by News24 / CityPress on 26 October 2025
Central planning and the fatal conceit
The ANC’s recently announced Ten-Point Economic Action Plan repeats the same error that has guided policy for thirty years: the belief that economic growth can be planned and controlled by government. It offers little that will change South Africa’s direction. It will not generate the growth needed to lift incomes, reduce unemployment, or attract investment, because it extends the reach of the state instead of removing the obstacles that hold back the economy.
Friedrich A. Hayek, awarded the 1974 Nobel Prize in Economic Sciences, called this faith in planning the fatal conceit: the illusion that officials can direct an economy better than the people who work, trade, and invest in it every day. That conceit lies at the heart of the ANC’s economic policy and explains why, after three decades in power, the government still cannot achieve sustained growth or employment.
Energy and the destruction of market discipline
The first of the plan’s promises, to “use electricity tariffs and investment to drive economic activity”, rests on the mistaken belief that growth can be directed by planners. It proposes that government should channel energy and investment to chosen sectors of the economy, as if it can foresee where success will occur. That conceit has failed wherever it has been tried. From Soviet steel targets to Mao’s Great Leap Forward, such schemes turned resources away from productive use and left economies weaker. South Africa’s own experience is no different. Eskom’s monopoly and political interference have already undermined efficiency, leaving households and businesses with unreliable and costly power. The purpose of energy policy is not to decide who should receive electricity, but to ensure that all consumers have access to power at competitive, cost-reflective prices; only privatisation and open competition can deliver that.
Transport, freight, and logistics
The promise to “accelerate the recovery of our freight and logistics sector” reveals the same misunderstanding. The collapse of rail and ports is the direct result of the state’s monopoly and the absence of commercial discipline. Recovery will follow only when rail and ports are privatised and operated competitively.
Industrial policy, development, and SMMEs
Promises to “rebuild industries”, “stimulate local development”, and “expand SMME support” rest on the illusion that enterprise can be created by directing funds. In practice, this means channelling money through agencies insulated from loss, leading to waste, favouritism, and corruption. Real business growth rests on secure property rights, reliable courts, and freedom to start and close businesses without political interference.
Labour activation and public employment
The section on “labour activation” and “public employment” repeats the discredited belief that government can create jobs. Experience has shown that only businesses, responding to demand, can do so on the scale the country requires. If employment could be created by decree, South Africa would not have one of the highest jobless rates in the world. Labour laws that raise the cost and risk of hiring deter employers from taking on new workers. Until these laws are changed, no amount of public spending will reduce unemployment.
State capacity and public administration
The promise to “improve the capacity of the state” simply ignores the scale of government failure. South Africa already carries a swollen and unaffordable civil service: the public-service wage bill absorbs 10.4 per cent of GDP, while only 16 per cent of municipalities achieved clean audits in 2023/24. A state that struggles to provide water, electricity, and policing will not perform better by multiplying departments. The solution is to privatise what the state cannot run, withdraw from the functions it performs badly, and remove the red tape that prevents people from working and trading freely.
Fiscal and monetary discipline
The call for “budget and macroeconomic coordination” rests on the assumption that stability can be achieved through direction from the centre; in practice, this has produced the opposite. Officials cannot manage the millions of decisions that determine production, saving, and investment. When they try, political priorities replace economic discipline, producing deficits, debt, and a weakening currency. Fiscal stability requires that government limit spending to what taxpayers can sustain, and that monetary policy protect the value of money instead of serving ideology.
Trade and regional integration
The promise of “trade and regional integration” will fail for the same reason as the rest of the plan: it begins at the wrong end. No country can trade successfully abroad while throttling enterprise at home. South Africa’s exporters face ports that do not function, roads that crumble, and regulations that constantly shift. No treaty or regional agreement can offset unreliable logistics, insecure property rights, and arbitrary control. Competitiveness is not created by negotiation but by economic freedom: the freedom to produce, invest, and trade without state obstruction.
The central control delusion
Across all ten points runs the same illusion: the belief that state control can create prosperity. Hayek warned that once governments attempt to substitute control for voluntary cooperation, they destroy the very information that makes a thriving economy possible. South Africa’s stagnation is a clear example of this fatal conceit. When politicians try to steer the economy, they override the knowledge that only individuals, acting in their own circumstances, can possess. Decisions about production and investment are shifted from those who face risk to those who face elections. The consequence is always waste, corruption, and poverty. This Ten-Point Plan will not produce the results the ANC is touting. Prosperity can only be created when government gets out of the way, and people are free to use their own judgement to work, trade, and invest without political interference.
