SA is not in crisis and has a bright future
But poor leadership, crime and unemployment could jeopardise our prospects, writes Jakkie Cilliers
SOUTH Africa does not face a crisis, despite high crime, unemployment and inequality, though weak growth and poor governance have made it more likely things could go badly wrong, according to a new paper from the Institute for Security Studies.
“The margin of error is thin, but there is still reason to be optimistic,” said ISS executive director Jakkie Cilliers, who has revised his SA Futures scenarios to take account of electricity shortages, the 2014 election results, new population figures and incoherent government policy.
“We are experiencing turbulence, but not a storm yet. SA requires a comprehensive resetting of key social, economic and political systems, but the perennial sense of crisis in the media is not supported by deeper analysis of the structural conditions. In reality, South Africa’s growth prospects are quite healthy,” said Cilliers.
The next five to 10 years might be quite uncomfortable, but in the longer term SA was in a “sweet spot” for economic growth, owing to its growing population and the ANC government’s investments over the past 20 years in water, sanitation, health and education.
Steady progress was being made in South Africa’s transition to greater political and economic inclusiveness.
Government programmes to support the transfer of wealth to black South Africans and help the previously disadvantaged were arguably the largest and most comprehensive of their sort worldwide, Cilliers said.
Besides social grants, black economic empowerment and extensive employment of previously disadvantaged South Africans in the civil service had led to a rise in the proportion of black people in the top living standards measure, from 4 percent in 1994 to 29 percent in 2014.
And the government had been investing in things that drive longterm growth, so in the long term SA would grow because the fundamentals were positive, despite worrying levels of wastage, corruption and patronage.
“Uninspiring leadership and a recent loss of vision by the ruling party should not hide the remarkable progress achieved, including rolling out of essential services, alleviating deep-seated poverty and the provision of broad-based education, despite flaws in implementation.”
“The impact of investments in education takes almost a generation to realise, but there can be little doubt that South Africa will, in time, reap the benefits of the investments made since 1994.”
Demographically, the country was well positioned for the future, with a high number of workingage people and a low number of young and old.
The new ISS SA Futures paper anticipates a South African population of around 67.3 million by 2035, a large increase from the 2015 estimate of 54.7 million, and higher than forecast by the National Planning Commission.
This increase is despite a fertility rate that is expected to fall below replacement levels in a decade, and is the consequence of continued inward migration, declining levels of infant mortality and increases in life expectancy.
Although high unemployment will continue to have negative consequences, the increase in employment levels from 15.1 million people in 2015 to a forecast of more than 25 million by 2035 will have a positive impact on tax revenues, the size of the economy and social stability.
Gross domestic product growth dropped from 2.2 percent in 2013 to an ailing 1.5 percent in 2014, and power constraints will continue to restrict growth for several years.
And without a near-revolution in policy coherence and government efficiency, there is little chance of average GDP growth levels reaching 5 percent over the medium to long term.
Weak leadership, poor governance and lack of delivery may cause the ANC to lose its majority as early as 2024.
Cilliers was concerned about a leadership vacuum before the scheduled 2019 national elections, with a new ANC leader due for election in December 2017.
Most South Africans voted for the ANC on the basis of its liberation credentials. However, as the number of born-free voters increased with each election, the memory and experience of apartheid, as well as the role of the ANC in South Africa’s freedom struggle, would diminish.
Instead, the demand for effective implementation and policies that deliver jobs, education and services was likely to increase. Born-free voters were also expected to be more willing to switch parties than older voters, increasing volatility in voting behaviour, Cilliers said.
Education and urbanisation also had a political impact. During the 1994 elections, around 51 percent of South Africans were living in urban areas. This had increased to 63 percent by the 2014 elections, and by 2035 up to 74 percent of South Africans were expected to live in urban areas.
“Parties that appeal to a rural support base may struggle to remain relevant in an increasingly urban-orientated consumer culture,” Cilliers said.
Unemployment had grown every year since 2008, when the global financial recession hit South Africa – also the year Jacob Zuma became president.
Although the prognosis for improvements in South Africa’s employment rate was not good, Cilliers emphasised the positive impact of expected growth in overall employment.
While the number of unemployed will remain constant, the ISS forecast is for a steady growth in employment from the current 43 percent to 56 percent of the working-age population.
Jakkie Cilliers is executive director of the ISS and head of its African Futures and Innovation section. He is an extraordinary professor at the Centre for Human Rights and the department of political sciences at the University of Pretoria.