Why the Doom narratives on South Africa are wrong

This article was first published by The Common Sense.Key topics:SA progress since 1994 challenges dominant doom narrativesStrong social unity and shared values across racial linesReforms proposed to revive growth and boost investment.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Despite the doom and gloom narratives permeating from so many news platforms, South Africa has made significant strides since 1994, and it will be easy to start doing so again. It’s easy to be swept up in the doom and gloom narratives that often dominate discussions about South Africa. Pessimism about race relations, economic stagnation, and societal fragmentation are common in media reports, and political speeches. Yet, this outlook ignores the significant progress South Africa has made over the past 30 years.Race relations, often painted as a source of ongoing division, are in fact far healthier than many believe. As the latest numbers from the Institute of Race Relations have again shown, the great majority of South Africans want to work together, over historical racial divides, to make the country a success for all its people.This newspaper sees more polling data on South Africa than almost any other institution in the country, and is comfortable saying that around nine out of 10 South Africans share common values, rooted in decency, and the desire to build a better future together. This deep, shared sense of purpose is a critical strength that can propel the country forward once again. The narrative that South Africa is permanently divided or locked in conflict is simply not accurate.The material progress made by the country has also been significant, and the first decade after 1994 was one of extraordinary progress.Under the leadership of the African National Congress, the country’s economic and social landscape was transformed. Employment nearly doubled from just under 8 million people in 1994 to nearly 15 million by 2008. Over the same period, access to electricity for households increased dramatically, with the share of families without electricity dropping from nearly 50% to under 20%. These milestones represent real, tangible progress that transformed the lives of millions of South Africans – and the narratives of jobless growth and failed service delivery were straight-up false news.This social progress was supported by sound fiscal policies. In the first half of its democratic era, South Africa halved its national debt and achieved budget surpluses, which were reinvested in social programmes that improved living standards. The country also successfully expanded its social grants programme, growing from about 3 million beneficiaries to nearly 12 million.To reignite this progress, four simple reforms could set the stage for another period of rapid growth. First, South Africa should stop taxing capital through policies like Black Economic Empowerment, which discourage investment.Second, the Expropriation Act needs to be redrafted to make plain that investment and property cannot be seized for less than market value.Third, the country should refit its defunct coal plants to ensure a stable energy supply for businesses.Finally, placing rail and ports fully under private operational control, via long-term leases, would unlock efficiency and growth in critical infrastructure, enabling a surge in mining and agricultural exports.While South Africa faces new challenges today, the foundation for future growth remains strong. If the country focuses on boosting fixed investment - currently at a very low 15% of GDP – growth could easily return to 4% annually, and unemployment could fall to 10% within the next two decades.

Why the Doom narratives on South Africa are wrong

Related Stories

Is the AI arms race about to outrun human judgment? The Economist thinks so

Hersov: There are two South Africas — it's time Washington started treating them differently

Frans Cronjé: As the 1910 Union disintegrates, only upside for SA’s middle class

TCS Editorial Board: Why humanity has never had it so good