Point. Seven. Percent
In the political mayhem of this week, a small number has gone relatively unnoticed. The economy grew by 0.7% in the past quarter.
That’s terrible. It’s way below our peers on the rest of our continent. And it’s well under our own projections in everything from the budget to the National Development Plan.
Our collective heads swung from side to side in the tennis match-like brawl between the governing ANC and Public Protector Thuli Madonsela. But I’d argue that anaemic growth is a much greater political risk to the government – and one it seems blithely unaware of.
The collapse of Abil is more than an economic story; it is a deeply political one. And if you look at the retail numbers for the same quarter, it’s clear the middle and working classes are under the whip.
Loan repayment rates have plummeted so that almost one in three unsecured loans is in arrears. Figures on food inflation published by City Press last week show price hikes are far higher than official inflation would suggest.
We know from monthly food bills that the black middle class is stressed; this is largely why the campaign against electronic road tolling has had such success. Add in the coming hikes in power costs (the regulator is set to allow Eskom an increase in tariffs to fund its investment costs) and you have a population that could be tipped over the edge and away from its historical support for the ANC.
The chattering classes (that’s us) may think people are moved by overspending on Nkandla or the spy tapes. But that’s not true.
It’s the economy, stupid. Always has been and always will be.
With a large portion of the Cabinet drawn into the fight to protect President Jacob Zuma from accounting for Nkandla, their collective eye is off the economy and, therefore, jobs growth. In crisis, the state is unable to implement the countercyclical measures that have protected the ANC from the political impact of previous near-recessions. Rather than #paybackthemoney, the government should be focusing on #makingthemoney.
Relative sizes of sectors