How will SA’s encroaching sovereign debt crisis play out in the ANC? One way to answer this question is to look at previous crises in other countries.

In November 1976, when debt default loomed for Britain, and a group of grey IMF men arrived in London, then prime minister Jim Callaghan secretly negotiated terms with them, including a whopping £2.5bn cut in state spending. Then he took the matter to his cabinet, most of whom were oblivious to the agreement he had made.

Over several gruelling sessions, the cabinet fought it out. Callaghan remained quiet almost until the end, leaving the grubby work of sparring and punching to his chancellor, Denis Healey. Pitted against Healey was Tony Benn, lodestar of the Labour party’s left-wing, and Tony Crosland, the foreign secretary. The argument was bitter and seemingly interminable. At the last hour, Callaghan finally spoke, coming down on his Healey’s side and clinching the debate. Britain would get an IMF bailout in exchange for the harsh austerity programme to which Callaghan had already agreed.

In years to come, the Labour party’s left-wing bitterly regretted having succumbed to Healy and Callaghan. A retrospective orthodoxy on what had happened took hold. The treasury, which had always wanted deep cuts, had vastly exaggerated the extent of the debt crisis, it was said, manufacturing inflated public sector borrowing forecasts to get its way.

“I remember a treasury friend said to me,” senior Labour figure Bernard Donoughue would tell an interviewer decades later, “that what you need is a crisis that frightens ministers into accepting your ideas. The bigger the crisis, the more you can frighten ministers. It’s what we call the treasury bounce.”

There is little doubt that a fight of this nature will play out in SA. The difference, though, is that the impasse will come before a consensus in government is reached, not years later. President Cyril Ramaphosa and Tito Mboweni probably do not have the moral authority to win the debate on austerity; the Treasury is no longer the hegemonic institution it was a decade ago.

Instead, one imagines, the ruling party and its government will fail to agree over the most basic definitional questions, such as whether there is a debt crisis at all and, if there is, what the consequences may be. The matter cuts too deep for a consensus even on rudimentary matters.

A structural adjustment programme would strip the SA state down to a few core functions. It would keep distributing to the poor through its existing cash transfer programmes; indeed, these would be more crucial than ever as unemployment levels rise. It would invest heavily in health care as memories of the Covid-19 pandemic remain fresh. And it would keep up investments in education.

But seeing to these core functions would leave the state’s dwindling coffers bare. For the rest, it would retreat into taking up a regulatory function, setting frameworks and rules for the private sector investment it hopes to attract.

Such a state is an intolerable prospect for many of the ANC’s core constituencies. From Bloemfontein to Mthatha to Mbombela, it would destroy the sources from which much of the provincial middle classes make their livelihoods.

The fight against austerity is thus existential. It cuts to the very heart of what the ANC is and who it serves.

Ramaphosa, famously, is a consensus builder. He will not sail until every last passenger is on board. Yet on this question, a consensus may not be possible; if Ramaphosa wants to govern, he may have to find a new way of approaching the world.

All the alternatives are perilous; if Ramaphosa’s thoughts happen to turn to Callaghan, it is hard to say what lessons he may learn. Perhaps he will take courage from the fact that Callaghan bullied a reluctant cabinet into accepting austerity. Then again, he may recall that two years later, Labour’s core constituencies rebelled against austerity in a series of strikes that bordered on insurrection, driving the party from office.

• Steinberg teaches African Studies at Oxford University.