Comparative policy analysis: The ANC’s NGC Economic Framework and the Inclusive Society Institute’s Growth Vision

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JANUARY 2026

Image credit: AI-generated illustration produced with OpenAI (DALL·E), 2026.

by Daryl Swanepoel

Abstract

South Africa’s economy is trapped in a cycle of low growth, high unemployment and fiscal fragility. Competing frameworks, being the African National Congress’s National General Council Base Document (2025) and the Inclusive Society Institute’s National Dialogue Concept Note (2025), propose contrasting paths to renewal. The ANC document advances a redistributive, state-led developmentalism, whereas the ISI offers a growth-first, capability-centred model grounded in fiscal realism and social partnership. This article compares the two, evaluates their coherence against social-democratic criteria, and assesses which approach can realistically deliver a sustainable welfare state. Drawing on comparative evidence from development economics and welfare-state theory, it argues that the ISI framework aligns more closely with both empirical growth dynamics and the philosophical core of modern social democracy. Economic inclusion, it concludes, is not the consequence of redistribution, but its precondition.

Keywords: Inclusive growth, Social democracy, Fiscal realism, Developmental state, Redistribution, State capability, Institutional integrity, Social partnership, Economic sequencing, Sustainable welfare state

Preface

South Africa faces an interlocking crisis of production, distribution and legitimacy. The ANC’s National General Council Base Document reflects the governing party’s attempt to reclaim the developmental momentum through renewed state activism, expanded redistribution and ideological reaffirmation. The Inclusive Society Institute (ISI) approaches the same crisis through a national rather than partisan lens, proposing a disciplined sequence of growth, employment and capability-building as the foundation of inclusive prosperity.

The comparative analysis that follows finds important areas of overlap, such as ethical governance, skills and partnership, but identifies decisive differences in sequencing and execution. The ANC framework prioritises redistribution before production, equating state scale with effectiveness, whereas the ISI model prioritises growth before redistribution, equating credibility with capacity. When assessed through the fiscal, institutional and philosophical standards of social-democratic economics, the ISI’s framework emerges as the only credible pathway to a sustainable welfare state. It offers a Southern adaptation of the Nordic model, namely a phased egalitarianism grounded in productivity, partnership and performance.

1. Introduction

1.1 South Africa’s economic and policy context

Three decades after democracy, South Africa remains caught between moral aspiration and economic constraint. Growth seldom exceeds population increase, the expanded unemployment rate hovers around fourty percent, inequality remains among the highest in the world, and the state’s debt service absorbs more than one-sixth of expenditure. Against this backdrop, both the African National Congress (ANC) and the Inclusive Society Institute (ISI) have articulated frameworks for national renewal.

The ANC’s National General Council (NGC) Base Document (2025) seeks to reinvigorate a developmental state by re-centring the state as the driver of production and redistribution. The ISI’s National Dialogue Concept Note (2025), conversely, defines a capable state as the enabler rather than the monopolist of development. It argues that inclusive growth, not redistribution alone, is the engine of social justice and cohesion.

1.2 Overview of source frameworks

The ANC’s National General Council (NGC) Base Document (2025) is both a political and economic reaffirmation of the party’s developmental-state philosophy. It calls for an expanded state role in production, redistribution and ownership through re-industrialisation, localisation and strategic control of key sectors such as energy, minerals and finance. It emphasises wealth taxes, land reform, public employment and welfare expansion as the primary means to advance equality, and positions the state as the central agent of transformation. The framework therefore marries social justice aims with a renewed faith in state activism, arguing that redistribution and state intervention will unlock growth by stimulating domestic demand and correcting historical distortions.

The Inclusive Society Institute’s (ISI) National Dialogue Concept Note (2025), in contrast, offers a pragmatic, non-partisan roadmap for national renewal centred on a capable, partnership-based state. It defines inclusive growth, rather than redistribution alone, as the precondition for social justice. The ISI framework proposes a phased approach by first restoring fiscal and institutional credibility, then accelerating employment through investment and reform of network industries and finally expanding social protection in step with affordability. It emphasises ethics, competence, evidence-based policy and social dialogue as the instruments of transformation.

Together these documents capture South Africa’s policy crossroads with one vision that seeks equality through expanded redistribution, and the other that seeks it through productive inclusion and capability. The analysis that follows evaluates their respective strengths, weaknesses and implications for a sustainable welfare state.

1.3 Purpose and method of comparison

This paper compares the two frameworks not as rival manifestos, but as competing theories of change for a struggling middle-income democracy. It identifies areas of alignment, exposes growth-inhibiting contradictions in the NGC framework, and considers how the ANC’s moral and historical mission could be reconciled with the ISI’s empirical realism. The analysis proceeds through ten sections, which are conceptual divergence, areas of alignment, structural contradictions, pathways for synthesis, implications for governance, the social-democratic character of the ISI model, fiscal realism as a pathway to social democracy, and, finally, a comparative evaluation of which model can deliver a sustainable welfare state.

1.4 Theoretical context

The comparative analysis contained herein contributes to a broader conversation about how developing democracies ought to reconcile equity with capability. Emerging literature on developmental and post-redistributive states argue that durable welfare outcomes depend less on ideology than on institutional performance and productive capacity; and if such holds true, then the ISI’s growth-first model aligns with this insight, because it proposes that fiscal realism and competence are not technocratic substitutes for justice, but its enablers. In this sense, the paper advances a Southern interpretation of social democracy, being one that balances moral purpose with empirical realism and adapts the developmental-state tradition to South Africa’s constitutional framework.

Analytical note: A shared destination, divergent pathways

Both the ANC’s National General Council (NGC) Base Document (2025) and the Inclusive Society Institute’s National Dialogue Concept Note (2025) pursue the same normative destination, being a social-democratic and national-democratic dispensation grounded in equality, inclusion and participatory governance. Empirically, this is evident in their shared objectives, namely the eradication of poverty, the reduction of inequality, the pursuit of full employment and the construction of a capable, ethical and developmental state. Each envisions a society in which political freedom is matched by socioeconomic justice, the moral core of South Africa’s democratic project.

Their divergence lies not in ends, but in means, because where the ANC positions redistribution and state direction as the catalysts of growth and legitimacy, believing that justice must precede efficiency, the ISI reverses this sequence, holding that growth and institutional capability are the preconditions for justice, implying that efficiency must finance equity. In effect, both frameworks interpret the same social-democratic creed through different causal logics in that where the ANC seeks equality to generate prosperity, the ISI seeks prosperity to sustain equality.

From a typological perspective, both belong within the broad

family of social democracy, but occupy distinct variants. The ANC represents a form of social-democratic populism, which is moral-activist, redistributive and state-driven in nature, drawing its legitimacy from liberation ideals and the politics of moral urgency. This variant of left-populist social democracy, as described by Ward and Guglielmo (2024) and March (2007), combines egalitarian aspiration with political mobilisation of the historically excluded. The ISI, by contrast, embodies social-democratic developmentalism, which is pragmatic, capability-centred and partnership-based in nature, aligning with the model of the social-democratic developmental state advanced by Van Eck (2010) and Kieh Jr (2015). It derives legitimacy from institutional performance, fiscal realism and fiscal discipline, rather than emotive mobilisation.

The contrast is therefore not ideological opposition, but a difference in temperament and sequencing, where the one asserts justice through redistribution, the other achieves it through competence and fiscal discipline.

The comparison that follows evaluates which pathway better reconciles moral aspiration with economic realism.

While the distinction between redistribution-first and growth-first paradigms is economic in form, it is ultimately philosophical in substance. Both the ANC and the ISI are heirs to South Africa’s constitutional promise of a society based on democratic values, social justice and fundamental human rights. Section 195 of the Constitution commits public administration to efficiency, accountability and developmental purpose, which affirms that competence itself is a moral duty. The ISI’s framework, therefore, can be read not only as an economic strategy, but as a constitutional interpretation of social justice and one that gives operational meaning to the moral obligations of the state.

This reframing transforms efficiency from a technocratic pursuit into an ethical principle and the means through which dignity is made affordable. In this sense, fiscal discipline and institutional integrity are not opposites of compassion, but its instruments. The capable and partnership-based state as is envisioned by the ISI is thus an expression of constitutional morality in which good governance becomes the daily practice of justice.

Figure 1: Two pathways to a just economy

(Source: Author, 2025)

2. Conceptual divergence: State as driver versus state as enabler

The NGC document articulates a post-neoliberal vision in which the state reclaims directive authority over the economy. It envisages a revitalised public sector expanding ownership, managing strategic industries and distributing resources to achieve equity. Economic justice is conceived primarily as a function of redistribution.

The ISI, by contrast, defines development as a partnership between state, market and society. The capable state, in this conception, is not measured by size, but by focus, and its legitimacy arises from competence, predictability and moral authority. Growth is the means through which social justice becomes sustainable, and redistribution is the result, not the driver.

The philosophical divergence can be summarised as one of causality. The ANC’s paradigm holds that equity will produce growth by stimulating domestic demand and correcting historical distortions. The ISI maintains that growth will produce equity by broadening the tax base, creating employment and enabling progressive redistribution. Both seek legitimacy through justice, but they differ on how justice is financed.

3. Areas of alignment

Despite ideological contrasts, there are striking overlaps once the party-political lens is removed. Both frameworks acknowledge that the crisis of governance has become the crisis of development. The professionalisation of the public service, merit-based appointments and ethical leadership are common pillars. Each calls for a skills revolution in areas such as curricula reform, vocational training and digital literacy to prepare citizens for a transformed labour market.

Equally, both recognise that social partnership is indispensable. The NGC’s appeal for renewed compacts between business, labour and government echoes the ISI’s structured National Dialogue process. Both perceive cohesion not merely as cultural harmony, but as an economic asset that reduces transaction costs and underwrites trust.

Furthermore, both diagnose the persistence of a dual economy, that is, an advanced corporate sector coexisting with a marginalised informal economy. Structural transformation, be it in spatial, racial or sectoral terms, is viewed as necessary to complete the democratic project. The difference lies in tone and mechanism. The ANC frames transformation as an ideological imperative requiring distributive assertion, whereas the ISI frames it as an economic necessity requiring productivity and competitiveness.

4. Where the ANC NGC framework undermines growth

The NGC’s aspiration to justice is unambiguous, yet its economic mechanics undermine the very growth that would make that justice achievable.

Redistribution before production. The document proposes wealth taxes, expanded grants, accelerated land redistribution and direct job creation through the state. These measures are morally compelling, but fiscally premature. In an economy where growth barely exceeds one percent, redistribution without new production risks eroding the tax base and precipitating debt distress.

State expansion without rationalisation. The call for insourcing and expanded state-owned enterprises assumes capacity that manifestly does not exist. When efficiency is low, increasing scope multiplies dysfunction. The capable state is built through focus, not sprawl.

Ambivalence toward markets. Repeated denunciations of “monopoly capital” coexist uneasily with appeals for investment. This dualism signals policy risk to both domestic and foreign investors, deterring the long-term capital formation that employment requires.

Macro ambiguity. The NGC’s resistance to fiscal consolidation as “austerity” and its hints at more directive monetary policy erode confidence in macroeconomic stewardship. Credibility once lost raises risk premia, crowds out productive spending, and ultimately reduces the very social expenditure the policy seeks to protect.

Regulatory overload and competitiveness gaps. Multiple, overlapping empowerment codes, licensing bottlenecks and localisation mandates that ignore cost competitiveness drive up transaction costs. The failure to stabilise logistics, energy and local government finances further constrains production.

Labour-market rigidity. Well-intentioned, but inflexible wage and hiring rules, unaccompanied by productivity incentives or youth-entry schemes, discourage job creation in the very sectors capable of absorbing low- and semi-skilled workers.

Foreign-policy ambiguity. The NGC’s anti-imperialist rhetoric risks alienating key trading partners and investors, substituting solidarity for strategy. A credible non-aligned diplomacy that prizes access to technology and markets would better serve inclusive growth.

These contradictions do not invalidate the NGC’s moral intent; they demonstrate that intent without sequencing undermines feasibility. Equity requires production and production requires confidence.

4.1 Empirical snapshot: Fiscal and structural constraints

The theoretical divergence between redistribution-first and growth-first sequencing becomes clearer when tested against South Africa’s macroeconomic data. Over the past decade, output growth has remained chronically below both potential and population growth, while unemployment and debt have accelerated. Table 1 summarises key fiscal and structural indicators that reveal the constraints within which any developmental strategy must operate.

Table 1: South Africa’s structural economic indicators (2015–2024)

Indicator	2015	2019	2024	Trend
Real GDP growth (%)	1.3	0.8	1.2	Persistently below population growth (≈ 1.5 %)
Unemployment (narrow definition, %)	25.4	29.1	32.1	Rising
Unemployment (expanded definition, %)	35.6	38.5	41.2	Rising
Gini coefficient	0.63	0.63	0.64	Static at extreme levels
Public debt-to-GDP ratio (%)	50.7	63.5	74.0	Rising sharply
Debt-service costs (% of budget expenditure)	11.2	13.6	16.8	Crowding out social investment
Public sector wage bill (% of total expenditure)	34.5	36.0	36.8	Upward rigidity
Gross fixed capital formation (% of GDP)	20.5	18.2	15.3	Declining
Private investment confidence (index, 2015 = 100)	100	92	84	Eroded by uncertainty

(Sources: Reserve Bank Quarterly Bulletin; National Treasury Budget Review, 2024; Stats SA, 2024)

The data reveal a pattern of fiscal compression and investment stagnation that constrains redistributive elasticity. With debt service now absorbing nearly one-sixth of expenditure and private investment at its lowest share of GDP in two decades, the state’s fiscal multiplier has weakened considerably. Under such conditions, front-loaded redistribution is not possible, because it cannot generate sustainable welfare gains, since it lacks a productive base to support it.

The empirical evidence therefore validates the sequencing logic being advanced by the ISI, namely that macroeconomic credibility must precede expansive redistribution. Growth elasticity of revenue has averaged only 0.8 since 2015, meaning that each percentage point of GDP growth yields less than a proportional increase in tax receipts (National Treasury, 2024). This underscores that fiscal consolidation is far from being “austerity”; instead, it is the prerequisite for reinvestment in education, infrastructure and human capability. As Figure 2 later illustrates, credibility → investment → jobs → revenue → redistribution remains not an ideological preference, but an empirical necessity.

5. A reconciliation path: Toward a developmental partnership state

The gap between the ANC’s redistributive ambition and the ISI’s growth pragmatism can be bridged through disciplined sequencing, rather than ideological retreat. A developmental partnership state would lead by credibility, not command, and it would transform the energy of moral aspiration into the discipline of economic realism.

Such a state would first restore macroeconomic credibility. Fiscal consolidation must be redefined not as austerity, but as social investment, where every rand saved in interest payments is a rand released for infrastructure and education. The independence of the South African Reserve Bank anchors expectations and lowers borrowing costs, and fiscal anchors enforce honesty about trade-offs.

Second, the state’s institutional architecture must be rationalised around capability, not capacity. Functions should be prioritised around the retention and professionalisation of core sovereign duties, such as justice, policing, revenue and regulation. Non-core delivery, such as housing construction, logistics, digital infrastructure, should be contracted competitively under transparent, performance-based frameworks. It should be a question of competence, and not ideology, that decides who does the work.

Third, the growth compact must be formalised, where government guarantees policy stability and reforms network industries, where business commits to domestic investment targets and job creation, and where labour moderates wage demands in exchange for training, equity participation and social protection. Tripartite compacts must be contractual, time-bound and published to restore accountability.

Fourth, industrial policy must shift from aspiration to execution. In renewable energy, agro-processing, automotive components and the digital economy, government should publish bankable sector deals with clear incentive matrices, regulatory timelines and exit conditions.

Fifth, network-industry reform, for example in energy and logistics, is the fastest route to productivity gains. Unbundle electricity transmission into an independent operator, open rail and ports to concessioning and enforce transparent tariff regulation. These are not neoliberal acts; they are acts of governance.

Sixth, labour-market reform must reconcile dignity with dynamism. Introduce youth-entry contracts with portable benefits, training vouchers and productivity-linked wage progression. Equity demands inclusion, not rigidity.

Seventh, local-government renewal is indispensable. Fiscal ring-fencing of service revenues, transparent dashboards and merit-protected technical appointments can restore delivery. Municipal collapse is a hidden tax on growth.

Finally, anti-corruption must be systematised, through for example, full e-procurement, beneficial-ownership disclosure and automated anomaly detection in public accounts. Integrity must become an operating system, not a slogan.

Through these measures, South Africa can build the virtuous sequence the ISI describes: credibility → investment → jobs → revenue → redistribution. Moral aspiration remains the same, the order of operations changes.

 Figure 2: The virtuous sequence

(Source: Author, 2025)

6. Governance and evaluative implications

When the preceding synthesis is tested against the efficiency-equity logic of mainstream economics, it passes both tests. A credible fiscal anchor reduces sovereign-risk premiums and lowers the cost of capital. Reformed network industries, such as energy, transport and logistics, compress economy-wide input costs, raising competitiveness. Predictable regulation and streamlined permitting improve investor confidence, while a meritocratic civil service raises the return on public spending. Redistribution then scales with real resources rather than with debt.

This sequencing also restores political legitimacy. In a context where liberation memory no longer guarantees obedience, legitimacy must derive from performance. Citizens tolerate constraint when they perceive that institutions deliver. A capable state that does fewer things well, generates a moral dividend, which is trust. In the ISI model, governance credibility becomes an economic variable, reinforcing growth through confidence.

Conversely, when the state over-promises and under-delivers, citizens retreat into self-help, elites seek rents and capital flees. The result is a vicious circle, where weak growth erodes revenue, fiscal pressure drives populism and populism erodes growth. Breaking this cycle requires a state that earns consent through competence, which is precisely the ideal that the ISI’s framework operationalises.

7. The social-democratic character of the ISI pathway

The ISI framework is recognisably social-democratic in spirit and structure. It insists on democratic pluralism, civic participation and a mixed economy regulated for fairness. It values markets as instruments, not ends, and views taxation as the ethical mechanism through which prosperity funds solidarity.

Yet it departs from European orthodoxy in one crucial respect: sequence. The Nordic and Continental welfare states emerged only after decades of industrial expansion and institutional consolidation. Productivity growth financed redistribution, and  universalism followed capability. South Africa, by contrast, inherited expectations of Scandinavian equity with the fiscal base of a developing country. Attempting to copy the European model wholesale would be fiscally catastrophic.

The ISI’s approach therefore represents phased egalitarianism, being a pragmatic adaptation of social democracy to developmental realities. It proposes to rebuild state capability, stimulate inclusive growth, and then expand the welfare net in step with affordability. This is not ideological compromise, but historical fidelity and it mirrors the trajectory through which Europe itself achieved social democracy. Justice achieved through competence is more durable than justice asserted through decree.

Box 1: Comparative Pathways – Lessons from Finland and Mauritius

Finland: Capability before welfare

Finland’s transition from a peripheral agrarian society to a high-trust welfare democracy illustrates that social democracy was built after productivity and state capability were established. Between 1950 and 1970, the Finnish state invested heavily in universal education, meritocratic administration and export competitiveness before expanding its welfare commitments. According to Kosonen (2014), “the Nordic welfare state grew out of an efficiency consensus, where distribution followed production”. Productivity-led equality thus financed welfare universalism, aligning with the ISI’s sequence of credibility → growth → redistribution.

Mauritius: Inclusion through competitiveness

Mauritius presents an African variant of the same logic. Following independence, the state focused on export diversification, education and macroeconomic stability before introducing broad social programmes. Subramanian and Roy (2003) found that its inclusive institutions, transparent fiscal management and export-orientated strategy generated fiscal space for redistributive policies without destabilising growth. Mauritius therefore demonstrates that developmental sequencing, that is, building growth capacity first, can deliver both cohesion and equity within an African context.

Synthesis

Both cases affirm that welfare sustainability depends on capability and growth preceding redistribution. They illustrate that sequenced egalitarianism, which is the ISI’s central proposition, is not a theoretical construct, but a historical constant across successful developmental democracies.

8. Fiscal realism and the South African pathway to social democracy

South Africa’s structural conditions of low employment absorption, a narrow tax base, and elevated debt, render an immediate European-style welfare state unaffordable. Implementing one prematurely would precipitate macroeconomic instability that would ultimately destroy social spending. The ISI recognises this constraint and sequences reform accordingly.

Phase One emphasises stabilisation and capability restoration, where fiscal discipline and efficient administration rebuild credibility, infrastructure reform lowers costs, education and health investment restore human capital. Phase Two focuses on inclusive growth, by crowding-in private investment, expanding exports and accelerating employment. Phase Three then scales redistribution as the economy’s resource envelope widens.

This progression is consistent with comparative evidence. Azulai et al. (2014) demonstrate that effective states precede sustainable welfare and here “state capability is the missing link between policy intent and developmental outcomes”. Andrews et al. (2017) similarly argue that governments must “build capability before expanding ambition”. Hirvilammi (2020) finds that welfare systems divorced from productivity soon face fiscal and political exhaustion. The ISI’s model thus embodies the lesson that growth and governance are the preconditions of generosity.

The ANC’s NGC framework, by contrast, inverts this logic. Its redistributive front-loading presupposes a fiscal elasticity that South Africa no longer possesses. Expanding transfers without first raising productivity widens debt, discourages investment and ultimately undermines the very redistribution it seeks to achieve. As Zeidy (N.d.) notes, “fiscal sustainability is a prerequisite for inclusive growth; without stability, equity cannot endure”.

Fiscal realism is not the enemy of social justice, but its guarantor. The ISI’s pathway offers a developmental road to social democracy that acknowledges constraint, yet preserves aspiration, in other words, a welfare state built on growth, not instead of it.

Figure 3: Phased Egalitarianism – The South African Road to Social Democracy

(Source: Author, 2025)

9. Comparative evaluation: Which model can deliver a sustainable welfare state?

Applying the five criteria of social-democratic economics, which are fiscal sustainability, productive capacity, institutional capability, equity and legitimacy, reveals a decisive pattern.

Fiscal sustainability. The ANC’s redistributive acceleration burdens an already fragile fiscus, by expanding entitlements without enlarging the revenue base, which is a risk to debt stability. In turn, the ISI’s growth-first sequencing widens revenue before obligation, which aligns with international evidence that suggests that stable fiscal frameworks serve to underpin social spending (Zeidy, N.d.).

Productive capacity. The ANC’s state-controlled tendencies deter investment by heightening uncertainty and politicising enterprise. The ISI’s partnership model fosters capital formation, technology diffusion and employment, which are all preconditions for a self-financing welfare state.

Institutional capability. The ANC recognises ethical decay, but leaves cadre deployment largely intact, perpetuating politicised administration. The ISI’s emphasis on merit, accountability and transparency directly targets the bureaucratic weaknesses that comparative research identifies as binding constraints on growth (Azulai et al., 2014; Andrews et al., 2017).

Equity and inclusion. Both seek equity, but through different instruments. Where the ANC offers redistribution through transfer, the ISI offers it through participation, and where the former alleviates poverty, the latter eradicates its causes.

Legitimacy. The ANC’s political legitimacy is historical and emotive, whereas the ISI’s would be performance-based and deliberative. Sustained legitimacy in mature democracies derives from delivery, not identity.

In sum, while the ANC’s model delivers moral urgency, it risks economic fragility. The ISI’s framework couples compassion with capability, sequencing equity after growth. Empirical evidence suggests that only this order of operations can yield a welfare system that survives political cycles. Growth-funded redistribution endures, whereas debt-funded redistribution decays.

10. Conclusion

Both frameworks share a moral horizon of a just, inclusive and cohesive South Africa. Yet their routes diverge sharply. The ANC’s NGC document treats redistribution as the engine of justice, whereas the ISI treats it as the dividend of justice achieved through growth. The former relies on political mobilisation, and the latter on institutional credibility.

The comparative evidence and economic reasoning converge on one conclusion. In an economy as constrained as South Africa’s, social justice cannot precede productivity. Growth is not a technocratic obsession; it is the means by which dignity becomes affordable. The ISI’s approach therefore represents not a rejection of the welfare ideal, but its only viable foundation.

Measured against the standards of modern social democracy, being fiscal realism, institutional integrity and productive inclusion (ISI, N.d.; 2020; 2024), the ISI’s framework stands out as the credible pathway to a sustainable welfare state. It transforms compassion into capacity and rhetoric into results. The ANC’s redistributive vision may inspire, but the ISI’s sequenced realism can deliver.

Ultimately, the task before South Africa is not to choose between justice and growth, but to recognise that justice requires growth. The capable, partnership-based state envisaged by the ISI embodies that recognition. It offers a model of social democracy suited to the nation’s realities. It is a disciplined, inclusive and sustainable route to deliver a republic where prosperity funds fairness and competence restores hope.

10.1 Policy implications for the medium term

The comparative analysis offers not only theoretical insight, but actionable direction for South Africa’s economic governance. The core lesson contained herein is that fiscal realism, institutional integrity and social partnership are not ideological concessions, instead they are prerequisites for an equitable society. Translating the ISI’s framework into policy practice will require deliberate sequencing and political will to sustain reform beyond electoral cycles, which, admittedly, is difficult, but still, necessary.

First, macroeconomic credibility must be reclaimed as a social investment, where fiscal consolidation is reframed as the moral discipline through which the state protects its developmental mandate. The reduction of debt-service costs will, for example, release resources for infrastructure, education and innovation, while a predictable fiscal anchor will rebuild trust with investors and citizens alike. The test of a progressive fiscal policy is not its expansiveness, but its sustainability.

Second, industrial and network-industry reform must shift from declaratory ambition to execution. Policy stability in energy, transport and digital infrastructure is the fastest route to restoring competitiveness and employment. The state should publish time-bound sector deals with clear metrics and transparent performance reviews. This would demonstrate that South Africa can plan, implement and deliver, thereby transforming credibility into confidence.

Third, social partnership must be institutionalised rather than episodic. A renewed compact between government, business and labour should be contractual, transparent and measurable, linking wage moderation and investment commitments to shared developmental outcomes. Dialogue must evolve from consultation to co-responsibility.

Fourth, capability restoration within the state must become a national project. Public administration reform, merit-based recruitment and performance-linked accountability are not bureaucratic details but moral imperatives of social justice. A capable state is the social policy.

Finally, political leadership must communicate a new developmental narrative, and one that reconciles growth with justice, and anchors hope in performance. South Africa’s democratic legitimacy now depends less on historical memory than on delivery. The capable, partnership-based state proposed by the ISI thus offers a reform pathway that is both ethically grounded and economically credible. It is a model of social democracy in which prosperity funds fairness and competence restores trust.

Epilogue

The choice before South Africa is not between growth and justice, but between illusion and endurance. Prosperity without fairness corrupts, fairness without productivity collapses. The task of our time is to make them one by building a state that delivers justice through capability and a nation where compassion is measured in competence.

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This report has been published by the Inclusive Society Institute

The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals.

Email: info@inclusivesociety.org.za

Phone: +27 (0) 21 201 1589

Web: www.inclusivesociety.org.za