Last week an International Monetary Fund (IMF) team that visited South Africa between November 11 and 25 — meeting economic cluster ministers, bureaucrats and others — released its “concluding statement”. Like most of the assessments of South Africa after the suspension of load-shedding and the formation of the government of national unity (GNU), the delegation is complimentary about the country’s leadership and cautiously optimistic for our economic progress.
“Real GDP growth is projected to accelerate to 1.1% this year and 1.5% in 2025, driven by recovering domestic demand supported by renewed post-election confidence, improved power generation (with no load-shedding since end-March), and declining interest rates,” the group said.
Those are actually terrible growth numbers for a country that’s facing so many challenges, but they weren’t unexpected. We’ve been hearing them for a while. On November 15, for example, ratings agency S&P Global said in a note: “We expect South African GDP growth will increase to 1.4% over 2025-2027 from 1% in 2024 as electricity load-shedding has eased, but ongoing logistics bottlenecks will continue constraining economic activity.”
I was in this zone of low expectations when I read the IMF note last week, so I didn’t even react. Then the authors landed a punch right on my solar plexus: “Under the IMF baseline, growth is projected to reach 1.8% by the end of the decade, as investment recovers gradually on the back of ongoing electricity and logistics reform efforts.”
The country is desperate for leaders to come up with a plan and implement it swiftly and with focus and determination
One point eight percent. This rate of growth, given our huge challenges of unemployment, poverty, underdevelopment, inequality, collapsing infrastructure and so much else, is an absolute disaster.
What’s worse is that this is not a projection for the next three years, but for the next six. In 2030 we will still be hovering below 2% growth, as we have been since 2009. It will mean that for a full 20 years we have stood in one spot. In the meantime, unemployment has risen from 21.5% in the fourth quarter of 2008 (when the geniuses in the ANC kicked out Thabo Mbeki to replace him with Jacob Zuma) to a staggering 32% today. Youth unemployment (ages 15-24) is even worse: it went from 36% in 2008 to 49% today.
If you were running a country and an expert told you that you would see a mere 2% average growth over the next six years, surely you would be freaking out? I think most of us would be panicking if our own numbers told us this sorry tale. Remember that finance minister Enoch Godongwana told us in his medium-term budget a month ago that the National Treasury’s 2024 forecast had been lowered to 1.1% from 1.3% in the February budget. The Treasury expected growth for the 2025-2027 period to average only 1.8%.
I want to scream. Why isn’t anyone panicking? Why am I the only one shaking, sweating and biting my nails?
These numbers are tipping us closer and closer to a point where voters will pick any populist who comes along promising jobs to run this country. Or, let me put it differently: a victim like Zuma, or someone similar, has a chance to go out there and tell impoverished young people that he will solve their problems.
Failure to provide a coherent and effective economic turnaround plan — which I still have not seen from the GNU — is tantamount to giving this country to the populist/kleptocratic nexus of the MK Party and the EFF.
The country is desperate for leaders to come up with a plan and implement it swiftly and with focus and determination. This week we heard that President Cyril Ramaphosa had postponed the “national dialogue” that his deputy, Paul Mashatile, had announced would be held on December 16. We don’t know when it will be held.
If we will reach only 1.8% growth in six years, then we are laying the groundwork for strife, chaos and populism in our country. There is no time. It’s time to get to work urgently. Is our president and his bloated cabinet listening? Is anyone listening?
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