Why is the South African Economy Growth so Low?

The South African economy entered the 70th Month of Downward Cycle in September, the longest since 1945, a situation that puts pressure on the government to implement structural reforms to boost investor confidence. and reinvigorate growth. The weakening economy continues as economic growth and investor confidence continue to be impacted by the uncertainty surrounding the implementation of structural reforms, said the South African Central Bank (SARB) in its quarterly newsletter. According to the bank, economic growth should not exceed 0.6 per cent in 2019, the lowest rate since 2016. Recent data show that investor confidence is at its lowest level in more than 20 years. These indices are aggravated by a number of factors including the crisis affecting state-owned enterprises, notably the national electricity company, and the rise in unemployment, which affects nearly 29% of the active population. This situation undermines the image of South Africa amongst foreign investors. So what is holding South Africa’s economy back? The very short answer is. #1. Blacks as the vast population majority need to take a more active role in economic growth. #2. Meaningful black entrepreneurial growth. #3. NEW BLACK owned employment offering business growth (not black ownership in existing business). #4. Supporting existing and encouraging skilled new white owned business and industry. #5. More black employee productivity, less strikes and tightening salary belts. Trade Unions need to get onboard , and help grow the economy by having less strikes and more productivity. #6. Drastically reduce the bloated, unproductive and overpaid government and SOE employment. And as well as effective, skilled and honest management and staff with a view to make all entities efficient, to assist and encourage economic growth and foreign investment. #7. A vast improvement in black education. #8. An end to government and private sector corruption and plunder of state funds. #9. An end to wasteful and fruitless government spending. #10. ANC to cease sabotaging the economy by making foreign investment distrustful of negative current and future political agendas (for example : Land expropriation without compensation). #11. Growing industry and drastically increasing EXPORTS of finished goods with less imports. I.E. Produce most of the goods we consume as well as exporting to other countries. But the more in depth answer is this . First we must fully understand what economy means in this context. There are many definitions that are pertinent to a “County’s economy”. A Country’s Economy can mean . a) The system according to which the wealth, industry, and trade are generated and organized. b) An entire network of producers, distributors and consumers of goods and services in a local, regional, or national community. c) The thrifty and efficient use of material resources. The frugality in expenditures; an instance or a means of economizing (saving). In all of the above definitions, South Africa has failed to efficiently conduct, maintain or encourage a stable and growing economy. There are two sayings that provide foundation for my next answer… “If mediocrity becomes comfortable, excellence can never be achieved.” And . “Mediocrity will always find excuse for failure.” The above two mentalities create a self fulfilling prophecy and are true in the context of South African government’s mismanagement. For a quarter of a century ANC government, in a nefarious agenda of hiding massive plunder of state funds, have propagated the belief in the masses that historic legacy (I.E. Colonialism and Apartheid) is solely responsible for depriving blacks of service delivery and as well as a prosperous future. This mentality has not only provided a smoke-screen for theft, but has reinforced the belief that blacks are incapable of self-upliftment and prosperity and that prevailing historic influences are still responsible for growing impoverishment year after year. Now this “excuse” may have had some credence were it not for the massive plunder and maladministration amounting to over a trillion of state funds by the ruling party (democratically voted-in and maintained in power by the masses). This money could have been spent not only to improve healthcare and education, but to help grow South Africa’s economy in many areas. For example the creation of sustainable well thought out and supported entrepreneurial initiatives that would assist the growth of new black owned employment offering business, industry and agriculture. The entire burden of economic responsibility is still in the hands of a decreasing white population. This corresponds to shrinking white owned business and industry and which is the major source of private sector employment. And while the government is a bloated employer of unproductive overpaid employees… and which adds to the tax burden. To compound this ,as white population has shrunk steadily since 1994, conversely the black population has grown, and that black entrepreneurship with NEWLY CREATED black owned business has been dismal despite billions of state money pumped into BEE initiatives. It is little wonder then that South Africa has growing unemployment and increasing poverty. And this directly equates to a shrinking economy. South Africa has a total population of 57.7 million, of which only 4.5 million are whites. Personal income tax accounts for approximately 37.5% of total tax revenue. Of this only 4.8 million citizens actually submitted tax returns (does not mean all of this number contributed to tax revenue). VAT accounts for approximately 25.6% of revenue. Company tax for about 16.9%. Fuel levy about 5.7%. Customs and Excise about 4.6% and Miscellaneous other about 9.7%. The shrinking white population therefore directly provides the majority of tax revenue. There are also many tax revenue streams that need independent auditing . for example Customs and Excise as this appears very low in relation to South Africa imports. It is my belief that vast amounts of tax revenue is being plundered at source or being avoided. The ANC government have not only been responsible for plunder of state money, but in so doing and also by reckless political instability and activities, have effectively sabotaged economic growth through international investor distrust. This has also negatively influenced The South African Rand versus the US dollar, Pound and Euro exchange rates.Effectively making all imported goods more expensive for local consumers. To add to the economic burden, the government in an effort to make up the tax deficit, have tried to increase fiscal revenue (yearly tax income) by increasing VAT, Company, personal and petrol taxes/levies. There is a well known saying among economists… “You cannot tax your way into prosperity.” And which is a concept the ANC politicians do not seem to grasp. If this were not enough… the government in a very short-sighted vote-generating policy have now revisited the huge economy degrading issue of “Land Expropriation without Compensation”. And insinuating by their silence and incoherent mumbles to the contrary, that white land will be taken away and re-distributed to blacks. Every citizen, whites, blacks, colored, Indian, has to be equally supported and encouraged by the government. There must be an end to the constant racial threat and alienation… and as the South Africa Constitution and Bill of Rights demands. The thing that is holding South Africa’s economy in a dark spot is black South Africans blaming all their failures on Apartheid, and a corrupt ANC government. Blacks in South Africa keep making excuses for the ANC and Julius Malema, and even for Jacob Zuma. They are wasting their time fighting a fight that they cannot win by neglecting themselves and their own country. The government is spending billions of Rands on changing names of the cities, the airports and soon even calling South Africa Azania. South Africa was a First World country under Apartheid, so the ANC is proving the National Party right, by not being competent. Apartheid was wrong, but no more excuses.








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