As far back as 1941, the historian CW de Kiewiet stated that South Africa had advanced politically by disasters and economically by windfalls.
Jan Smuts, a former prime minister of the Union of South Africa, held the view in 1949 that neither the worst nor the best happens in South Africa.
Smuts is better known and remembered than De Kiewiet, who grew up in South Africa but emigrated to the US. He had an illustrious academic career at the University of Iowa, Cornell University and the University of Rochester, and published extensively on South African history.
The thoughts of De Kiewiet and Smuts are still relevant, more than three-quarters of a century later. In 2025, South Africans vacillate between despair and hope.
In the 30 years since democratic elections in 1994, the ANC government has mismanaged South Africa through incompetence, greed, state capture and corruption. This shocking conduct, repeated under various administrations, resulted in low economic growth, high unemployment and declining living standards. Despite this, the ANC still holds a collective opinion that it should continue to govern.
South Africans have many reasons to despair. The country is in an economic and fiscal crisis, though these problems are denied by politicians. Political parties are more interested in claiming credit for aborting the planned VAT increase than putting forward plans to improve economic growth.
The third attempt to table an acceptable national budget will be made on May 21. We can only hope the ANC and the minister of finance took to heart lessons from the two failed attempts. There is no guarantee that the third will be successful.
The impact of the fiscal crisis is carried by personal taxpayers, whose contribution to total government revenue has increased from about 30% in 2005 to more than 40% in 2025. There is no scope for further tax increases and the only way out of this crisis is lower government spending.
The GNU that came to power after the 2024 election brought hope to South Africans. There was a sense of a new dawn, with an expectation that the GNU would focus on the needs of South Africans.
These needs can be described in many ways, with many words. Politicians and political parties are skilled in the art of eloquent and verbose elaboration.
Nevertheless, when all is said and done by politicians, it is normally 100% said and 0% done. To summarise, South Africans need higher economic growth that results in less unemployment and reduced income and wealth inequalities.
The GNU has not announced any initiatives to achieve higher economic growth. The economy remains trapped in a low-growth trajectory, while unemployment is still high.
The ANC acts as if it still holds a parliamentary majority and ignores its GNU partners. Much damage is done in the process, with the VAT situation the best example.
Despite considerable uncertainty on whether VAT would indeed be increased in the run-up to May 1, South African businesses had to prepare for it. The government made no estimate of this cost, but my own amounts to more than R1bn.
This includes aspects such as administrative systems changes, accounting adjustments and communication with clients. The government might have billions of rand to waste, but R1bn and more is not small change to the business community.
Ramaphosa has created a bloated presidency that will one day come to haunt South Africans
With the subsequent announcement that the planned VAT increase had been scrapped, the cost to prepare for the hike can only be viewed as unnecessary and wasteful expenditure. It is really time for the minister of finance to acknowledge this cost and apologise to all South Africans for the chaos surrounding the VAT increase.
South Africans were generally optimistic when the GNU was announced in 2024. The coalition government brought hope, as shown by the improvement in the South African Chamber of Commerce & Industry business confidence index (BCI). From a level of 107.8 in May 2024, the BCI improved to 125.8 by February 2025, before declining marginally to 123.5 by March 2025.
The BCI is higher than in February 2018, the time of Ramaphoria after the election of Cyril Ramaphosa as president. Ramaphoria evaporated as it became obvious that Ramaphosa is an ineffective leader. He exerts little authority over his own or any other party. He has excelled only at the appointment of cabinet ministers, deputy ministers and a plethora of committees, while he has also created a bloated presidency that will one day come to haunt South Africans.
Ramaphosa has made many mistakes, but a big one is his assumption that the title of president of South Africa automatically bestows respect and power. Respect is earned, while power must be exercised through effective and efficient leadership and decision-making. “Still applying one’s mind” is neither effective nor efficient leadership.
There are calls that the Reserve Bank should reduce interest rates to stimulate economic growth. Unfortunately, all the sins of the government over many years cannot be “forgiven” by lower interest rates.
Excessively lowering rates might stimulate investment in the short run, but the opportunity cost will be higher inflation in the long run. Lower interest rates are not the panacea for South Africa’s economic, employment and fiscal problems. Sound economic policy is the solution.
In the 25 years since the adoption of an inflation target, successive Bank governors deserve respect. They withstood pressure for low interest rates at inappropriate times and conducted sound policy. Continuation of this stance brings hope for the future, as low inflation is in the best interests of all South Africans.
Pressure for lower interest rates reminds us of President Donald Trump’s criticism of the policy approach of the US Federal Reserve, chaired by Jerome Powell. Trump wants lower interest rates.
The Fed conducts sound monetary policy in view of possible inflationary pressures emanating from US tariff increases. Politicians in search of quick fixes are not particularly fond of sound monetary policy. The similarity between the US and South Africa is obvious.
The GNU has no coherent plan to lift South Africa out of its fiscal crisis or to raise economic growth. We can only hope that improved business confidence will result in an increase in investment, thus contributing to accelerated economic growth and a reduction in unemployment.
Despite extensive mismanagement by the ANC (and the list is long), South Africans still have a lot to be proud of. The country has some world-class universities. Our sports teams make us stand tall. Our central bank performs on par with the best in the world. South Africa has a sound and stable financial system. Our agricultural sector feeds a population that grows at a rate well above the economic growth rate.
Lastly, we have to remember the rule of law, freedom of speech and media freedom. Under some previous South African governments, I might have faced a gagging order for my criticism against Ramaphosa, the government and government officials.
The message is simple: give South Africans hope, they will do the rest.
Rossouw is an honorary professor at Wits Business School and a former head of the school, as well as a former deputy general manager and currency specialist at the Reserve Bank
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