The ANC veteran discusses the state of the South African economy, the country’s progress in fighting HIV/AIDS, China’s role on the continent, and the important part that values have to play in the business world.

With the 2010 World Cup set to begin June 11, it is a proud moment for the host country, South Africa. And, as its deputy president, Kgalema Motlanthe, suggests in this interview, it is also an important opportunity to bring the country together 20 years after Nelson Mandela’s release from prison and the unraveling of the apartheid regime. Motlanthe, a former trade unionist, served ten years in prison (1977–87) on Robben Island for violations of South Africa’s Terrorism Act. He was named president of South Africa in September 2008, after President Thabo Mbeki stepped down, and remained in office until the following May, when Jacob Zuma became president following a national election. Motlanthe was subsequently named deputy president. He is also deputy president of the African National Congress, South Africa’s ruling party.

In an interview on April 30 with McKinsey’s Norbert Dörr and David Fine, Motlanthe reflects on the state of South Africa’s economy, the country’s battle against HIV/AIDS, how the world perceives Africa, and China’s role in Africa. He also offers some thoughts about values and business in the aftermath of the financial crisis: “We are struggling ourselves, as a new democracy in South Africa, to restore values,” Motlanthe says. “I’m saying from our own experiences, what we can share with business leaders is that values are never a given. They have got to be worked on and consolidated on an ongoing basis.”

Read the interview below or view portions of it here.


The Quarterly: What does the World Cup mean to South Africa?

Kgalema Motlanthe: The World Cup was really a bonus in the sense that we started investing in the construction of stadiums and expansion of the road network ahead of the economic meltdown. So it served as a countercyclical measure. And of all the sectors of the economy, only the construction sector continued to show growth even during the recession. So it actually served a very useful purpose. But on a broader note, it also offers us an opportunity to consolidate the national cohesion, because we come from a past where we were divided along color lines. And sporting events such as the World Cup always serve to cement the sense of belonging, the sense of being one nation. So that is a very important benefit.


The Quarterly: How would you describe the state of South Africa’s economy, and what are its main attractions to outside investors?

Kgalema Motlanthe: The South African economy is just about coming out of the recession, which was a global phenomenon, and we are now seeing new jobs being created. The automotive sector of the economy, which was adversely affected by the recession, is now beginning to pick up, along with sales of new vehicles. So, we are technically out of the recession.

We have a well-regulated banking system—such that, even with all the toxic products, South African banks were not affected. And we have a stable democracy. There’s predictability; investors can invest in South Africa and use it as a springboard to the rest of the sister countries on the continent.


The Quarterly: When people talk about China and India, you hear a lot about growth opportunities. On the contrary, when Africa is mentioned, you hear about all the problems: poverty, joblessness, poor health. Why is this the case?

Kgalema Motlanthe: The underlying reason for this negative perception about Africa isn’t really the fact that many African countries have had unstable governments. We’ve had coups and so on. [The real reason is] there’s genuine underdevelopment—not enough road networks and railways. It’s very common to find that if you’re in a country such as Cameroon and you want to go to Bangui, the capital of the Central African Republic, you’ve got to fly to Europe. It is those kinds of bottlenecks that give rise to this perception that Africa is just a continent of problems.

But we all know that there’s a new generation of governments and leaders. The African Union has a policy of not recognizing any government that is not elected, so that has brought about stability on the continent. There’s therefore an opportunity to address those problems. All of these problems—infrastructure, education, health—are in fact opportunities to do business. If you look at countries such as India, they invested a lot in education, IT, and ICT¹ and reap the benefits of those investments. That’s what Africa needs to do as well.

To continue reading this article, please visit the McKinsey Quarterly.


¹ Information and communications technologies.

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