Kingdom Report

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Week of 10 October 2026

 

Part 4 : An Economic Template for Southern Africa

 

This is not the time or place for the evangelical church to preach about "miracle money through faith declarations". It is time to apply the Template of Prosperity that God gave Daniel for a prosperous Persian empire where God's people could build the Temple and a new Jerusalem in peace. A place that families can prosper and the Word of God can go out and teach the nations.  The Jerusalem city state that Ezra and Nehemiah built with a wall around it wasa supposed to demonstrate the Jubilee Economy of the Law of Moses. They did not.  But at least Daniel laid a proper foundation for the large multinational empire of Persia on which God's people could build on.

Therefore I give you a challenge of what we can do in the interim as economic policy to lay a prosperous economic foundation for the region we find ourselves in of Southern Africa.  I want you to think of Southern Africa as a potential Persia empire template and we the people of God placed by the Lord in government and business need to steer our subcontinent through the tumultuous time ahead. To do that I am going to suggest what is for many an unthinkable economic example:  The National Government economic policy from 1948 to 1994 when they gave over power to the ANC.  And the reason I recommend this is because their policy was based on the fact that South Africa had no friends in the world and we can look to nobody for economic help we are going to have build the nation with our own skills and own capital. I suggest to you the world of globalization is over. Every region of the world is at economic war with every other region and we need to wake up that Southern Africa is being economically raped and we better start fighting for economic independence harder than wee fought for political independence.  

 The world economy that Southern Africa joined after 1994 is breaking up. The Ukraine war has rearranged energy and grain routes. Conflict in the Middle East and attacks on Red Sea shipping have raised the cost and the risk of the sea lanes on which the region depends. China now supplies a rising share of Africa’s manufactured imports while buying a narrowing basket of minerals and oil. Public debt in much of the continent already absorbs more money than classrooms. In that setting, the Southern African Development Community cannot treat open borders, free capital exit and import dependence as a development strategy. It needs a production strategy.

The post-1994 bet in Southern Africa was that globalisation would do the work. Mines would sell into an open commodity market, manufactures would face competition and improve, capital would come in if property rights were credible, and China would be a customer. Parts of the bet paid. Parts of it have now reversed.

China’s goods trade with Africa is approaching 300 billion dollars a year, on the order of a tenth of African GDP. The imbalance has widened. Chinese exports to Africa rose to about 179 billion dollars in 2024, up sharply from 2020, and rose further in 2025, while Chinese imports from Africa have grown more slowly and remain concentrated in oil, ore and a few metals. Southern Africa is forecast to grow at a fraction of the East African rate. A region that imports the machinery, the vehicles, the steel products, the chemicals and the consumer goods, and exports the ore, is not industrialising. It is the quarry for someone else’s industrialisation.

The political shocks land on the same structure. The Ukraine war re-priced gas, fertilizer and grain and showed how fast a European energy system can be rewired away from a single supplier. Middle East conflict, and the diversion of shipping around the Cape when the Red Sea is unsafe, is a tariff by another name: it raises the cost of every imported turbine, every exported ton of coal, every box of fruit. African sovereign debt is the third clamp. UNCTAD’s vulnerability work finds nearly half of African countries above a 60 per cent debt-to-GDP ratio, many of them spending more on interest than on education. Commodity dependence compounds it: more than half of African countries take at least 60 per cent of export earnings from oil, gas or minerals. Intra-African trade in intermediates remains thin. Inside SADC itself, intra-regional trade was reported at about 20 per cent of the region’s total trade in 2025 — better than the continental average, far short of a production bloc.

Friend-shoring and tariff walls in the United States, Europe and India are the external confirmation. The countries that kept industrial capacity under the previous free-trade order are now being paid to expand it. The countries that dismantled it are being told to import. Southern Africa is in the second group, by choice, and it does not have to stay there.

The Apartheid Government Economic Policy: A Lesson for the New Economy

The closest regional precedent is not a European customs union. It is the industrial state built in South Africa between 1948 and 1994. The National Party government treated economic and military non-dependence as a national objective. Capital was discouraged from leaving. Import licences, tariffs and local-content rules pushed substitution. State corporations were used as instruments, not as ornaments: synthetic fuel, steel, electricity, phosphates, arms, shipping, development finance. The political order that accompanied this programme — statutory racial classification, pass laws, the homeland system — is not a model and is not what this essay recommends. The economic instruments are a different matter. They produced the largest industrial economy in Africa, a national power grid, two purpose-built heavy-haul railways, a synthetic-fuel industry that still has no peer, and a set of universities and research institutes that later governments inherited.

Separate development, as economic doctrine rather than as racial law, rested on a blunt assumption. South Africa had coal, iron ore, manganese, chrome and gold, and almost no oil. It sat at the end of long sea routes. From the early 1960s it also faced a tightening arms embargo, and from the mid-1980s financial sanctions and a debt standstill. The policy response was autarky where it could be bought, and selective trade where it could not.

Three instruments did the work. First, exchange control. The commercial rand and, later, the financial rand trapped domestic savings inside the country and raised the cost of taking capital out. Second, import substitution. Consumer goods, then intermediates, then capital goods were pulled behind a tariff and licensing wall, with the Industrial Development Corporation (IDC) as the public banker of last resort. Third, state corporations that private capital would not have built at the required scale or on the required timetable: Sasol, the expanded Iscor, Eskom’s mine-mouth stations, Armscor, and Safmarine after its repatriation in 1959.

The IDC itself predates National Party rule. Parliament created it in 1940, on the van Eck commission’s argument that wartime disruption of European supply required a domestic industrial capacity. Its first loan, in 1941, went to a rusk baker (Ouma's Rusks). Its consequential loans came later: the founding finance for Sasol in 1950, Foskor, the Palabora copper complex, Alusaf, and the 1959 repurchase that returned Safmarine to South African control. The point is institutional continuity. The National Party did not invent the developmental state. It scaled it, under sanctions, for a generation.

Manufacturing value added and GDP both peaked in the first half of the 1960s, with manufacturing growth near 10 per cent a year in 1960–65 and about 8.6 per cent across the decade. From the early 1970s the rate fell in steps: still respectable in the 1970s.

Electricity is the clearest industrial achievement of the period, and the numbers are amazing. And the lowest cost electricity in the world was the result.

Eskom — Escom until the 1987 Act — was founded in 1923. What changed after 1960 was scale. Stations of a few hundred megawatts gave way to six-pack mine-mouth plants of 3,600 MW and more, sited on the eastern Transvaal coalfields so that coal moved by conveyor rather than by rail.

Station	Commercial service	Net capacity (MW)	Type
Komati	1961–1966	906	Coal
Camden	1966–1969	1,520	Coal
Grootvlei	1969–1977	1,130	Coal
Hendrina	1970–1977	1,900	Coal
Arnot	1971–1975	1,980	Coal
Kriel	1976–1979	2,850	Coal
Matla	1979–1983	3,450	Coal
Duvha	1980–1984	3,450	Coal
Koeberg	1984–1985	1,840	Nuclear
Tutuka	1985–1990	3,510	Coal
Lethabo	1985–1990	3,558	Coal
Matimba	1987–1991	3,690	Coal, dry-cooled
Kendal	1988–1993	3,840	Coal, dry-cooled
Majuba (started)	1992–2001	3,843	Coal; completed after 1994

 

That is thirteen large stations with a first unit before 1994, plus Majuba, whose construction began inside the period and whose last unit came in 2001. To them should be added the pumped-storage plants that made a coal system flexible: Drakensberg (1,000 MW, in service 1981) and Palmiet (400 MW, 1988), and the City of Cape Town’s Steenbras scheme (180 MW, from 1979). Hydro at Gariep (360 MW, 1971) and Vanderkloof (240 MW, 1977) sits on the Orange River dams. Gas turbines at Acacia and Port Rex, 171 MW each, were commissioned in 1976 as coastal peaking plant. Older and smaller stations — Ingagane at Newcastle, completed in 1963, among them — fill out a programme of roughly twenty generation sites in a little over thirty years.

The surplus was real. So was the industrial result: South Africa entered the 1990s with the only continental-scale grid in Africa, a 765 kV spine from the coalfields toward the coast, and a nuclear station at Koeberg that still supplies the Western Cape.

Sasol is the purest case of the doctrine. Founded in 1950 with IDC capital, it commissioned Sasol 1 at Sasolburg in 1955 on Fischer–Tropsch coal-to-liquids technology. After the 1973 oil shock the government authorised Sasol 2, on stream at Secunda in 1980, and Sasol 3, on stream in 1982. Secunda remains the largest coal-to-liquids complex in the world. At the height of the embargo years synthetic fuel covered a large minority of inland liquid-fuel demand. The plants were expensive, dirty, and justified in strategic rather than commercial terms. They also meant that an oil cutoff could not stop the railways, the farms or the army.

Iscor, created in 1928, was the steel half of the same idea: domestic plate, sections and flat products for mines, railways and construction, later for a motor industry assembled behind local-content rules. It was privatised in 1989, late in the period, which is a useful reminder that the National Party was not doctrinaire about ownership once a plant existed. Armscor, formalised in the sanctions decade, built a domestic weapons industry under a UN embargo; in April 1992 its factories, with more than 15,000 employees, were grouped into Denel

The period founded Sasol, Foskor, Safmarine-under-IDC, Armscor, Soekor, the Atomic Energy Board’s operating arm, the HSRC and the DBSA, and it multiplied Eskom, Iscor, the CSIR and the railways into institutions an order larger than the ones inherited in 1948. Homeland development corporations — in Transkei, Bophuthatswana, Venda, Ciskei and the self-governing territories — add another tier of public capital vehicles, perhaps a dozen, capitalised to support the growth-point policy for national dispersal if industries.

Institutions that received university status or were founded between 1948 and 1994 include the following. The University of Natal, a college since 1909, became a full university in 1949. The University of the Orange Free State gained university status in 1950. Rhodes University was chartered in 1951, as was the Potchefstroom University for Christian Higher Education. Stellenbosch opened a medical faculty at Tygerberg in the mid-1950s; the Free State medical faculty dates from 1969. New foundations then came in a cluster: the University College of the Western Cape (1959, later a university), the University of the North at Turfloop (1959), the University College of Zululand (1960), the University College for Indians, later Durban-Westville (opened 1961, university 1971), the University of Port Elizabeth (1964–65), and the Rand Afrikaans University (act of 1966, teaching from 1967). A second wave followed the homeland policy: the Medical University of Southern Africa at Ga-Rankuwa (1976), the University of Transkei (1976), the University of Bophuthatswana (around 1979–80), Vista University with its urban campuses (1981), and the University of Venda (1982). The CSIR dates from 1945 and was the state’s industrial laboratory through the whole National Party period, including a large defence programme. The Human Sciences Research Council was established in 1969. The Atomic Energy Board, created in 1948, grew into the nuclear-fuel organisation that supported Koeberg. Mintek’s predecessors in minerals technology were expanded. The South African Bureau of Standards, Onderstepoort veterinary research and the agricultural research stations are older, but their budgets and mandates grew with the drive for self-sufficiency in food, vaccines and industrial norms.

We had our own shipping fleet. Safmarine. The 1960s fleet programme, paid for on the back of that repurchase of Safmarine by the state, is the one that matters. It added six refrigerated ships, eight fast dry-cargo vessels and four bulk carriers, and it gave the company nearly thirty South African-flagged ships and about 2,000 seafarers. In 1970 Safmarine alone had 23 foreign-going commercial ships under the South African flag; the coastal operator Unicorn had 25 more. From 1966 Safmarine also managed an IDC-owned tanker fleet that grew to eight vessels, including three very large crude carriers. Passenger service came by purchase rather than by building: the mailships S.A. Vaal and S.A. Oranje, formerly Union-Castle, plus the cargo-passenger mailships on the Cape run, and a brief cruise-ship episode with Astor in the mid-1980s.

The strategic point is not nostalgia for a flag on the stern. It is that a mineral exporter which does not control a slice of its own lifting pays someone else for the right to sell. Safmarine was how the industrial state kept that slice.

A Southern African Economy

A protected Southern African economy is not a wall around sixteen countries. It is a common external tariff on the goods the region intends to make, free movement of those goods inside the region, a rule on capital, and a short list of projects too large for any one treasury. The National Party list — fuel, steel, power, heavy rail, phosphates, a shipping slice, a development bank — maps onto the regional list with little translation.

Hold the capital in

SADC already has a development bank, a regional central-bank conversation, and sixteen national exchange controls of varying seriousness. What it does not have is a rule that long-term savings raised on the back of regional mineral rents are invested in regional plant before they are invested in foreign portfolios. A regional capital-retention regime need not be the financial rand. It can be a requirement that pension funds, sovereign funds and mineral-royalty funds hold a rising share of infrastructure and industrial paper issued inside SADC, with a phased cap on portfolio exit during the build-out. The IDC model is the institutional one: a balance sheet that takes the first loss on a Sasol-scale plant, then sells down.

Substitute where scale exists

The region has iron ore, coal, manganese, chrome, copper, phosphates, timber, cotton, hides, and a large food surplus in some seasons. It imports rebar, rail, fertiliser, refined fuels, pharmaceuticals, transmission equipment, wagons and most clothing. A common external tariff, temporary and declining, on a published list of these goods — tied to regional content, not to national flag — is the import-substitution instrument. The failure mode to design against is the South African one of the 1970s: a tariff that never falls, behind which a single high-cost plant sells to a captive market. Sunset clauses and a second regional supplier should be conditions of the protection.

Build the few systems that change the structure

Four projects correspond to the heavy-haul lines and the mine-mouth stations. First, a rehabilitated and electrified north–south railway from the Copperbelt and the Katanga mines through Botswana or Zimbabwe to the South African and Namibian ports, with one operating standard and one axle load. Second, a finished east–west link that makes Beira, Nacala, Maputo, Durban, Walvis Bay and Lobito alternatives rather than bottlenecks. Third, transmission interconnection large enough that a surplus in one country covers a deficit in another, which is the regional version of the 765 kV spine. Fourth, a fuels and fertiliser complex — gas where it exists in Mozambique and Namibia, coal-to-liquids or biomass-to-liquids only where the feedstock and the water are real — so that a distant war cannot stop a planting season. A regional shipping company, with a small owned fleet on the mineral and container trades and cabotage rights between SADC ports, is the Safmarine equivalent. It does not need fifty ships on day one. It needed three in 1947.

Put the factories on the infrastructure

The SADC should designate a short list of industrial zones that already sit on power, water, a port or a heavy-haul railway: Richards Bay, Maputo, Beira, Walvis Bay, the Gauteng–Durban corridor, the Copperbelt, and one or two inland nodes on the ore line. Incentives should be paid against output and retained employment, for a fixed number of years, and withdrawn on schedule. Homeland-style points chosen to balance a political map should not be repeated under a new name.

Train the people who will run the plant

The university count of 1948–1994 matters less than the technikon count. A regional industrial policy that funds fifteen new universities and no artisan pipeline will produce papers, not turbines. The practical instrument is a SADC technical-college network aligned to the projects above such as — linesmen, fitters, process controllers, marine engineers — with degrees reserved for the research institutes that support them. The CSIR and Mintek model, a public laboratory tied to a public plant, is the right shape for a regional minerals-processing and fuels institute.

The National Party government of 1948 to 1994 did not build the South African economy from an empty map. Railways, Eskom, Iscor and the IDC were already there. What it did was refuse to leave the next stage to imports and to foreign capital. It kept savings at home, built Sasol because the oil was not there, doubled the power system, laid two heavy-haul lines to two new ports, chartered a wave of universities and technical colleges, ordered a national-flag fleet, and scattered — with mixed results — close to two hundred industrial points across and beside the homelands. The political system wrapped around that programme was unjust, and it failed on its own terms. The economic instruments did a job that is still visible in the grid, the ore line, Secunda and the port layout.

Southern Africa now faces a harder version of the same constraint, without the option of a closed racial state and without the gold revenues that once paid for mistakes. Shipping is less safe, energy is a weapon, China sets the price of manufactured imports, and debt service is crowding out the capital budget. Intra-SADC trade at a fifth of the total is not a production bloc. A production bloc would keep regional savings inside regional plant, protect a short list of goods for a short number of years, build the corridors and the interconnector and the fuels complex, put factories only where the infrastructure already is, and train the technicians before the ribbon is cut. That is

 

 

 

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