Mailbox: ANC’s legacy – Harvesting failure, not hope
Key topics
ANC reversed poverty gains while China uplifted millions in 40 years
Eskom, Transnet, and corruption cited as anchors dragging growth
IMF/World Bank urge reforms amid rising debt, crime, and inequality
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By Henk Kruger
For context, China has uplifted the greater majority of their people out of poverty within 40 years. The ANC has achieved the exact opposite in over 30 years. This argument/claim is incontestable and does not make headline news? While the below listed rational (populist) argues the reason for the SA deterioration, it is safe to assume that by comparison the exact opposite (where applicable) took place for the China success.
South Africa’s economic growth is constrained by a mix of infrastructure failures, policy inertia, corruption, and social challenges. Both the IMF and World Bank emphasize that structural reforms and better governance are critical for unlocking growth. Several key factors are holding back South Africa's economic development. These include:
Energy Crisis
Systemic electricity shortages due to Eskom's operational inefficiencies, aging infrastructure, and lack of maintenance.
Frequent load shedding disrupts businesses, deters investment, and reduces productivity.
This can only be a problem when focussing on electricity generation by coal.
Thabo Mbeki is of the opinion that the energy crisis is orchestrated?
Logistics and Transport Bottlenecks
Port and rail inefficiencies (managed by Transnet) lead to delays in exports, particularly in mining and agriculture.
Poor infrastructure and maintenance reduce competitiveness in global markets.
Structural Unemployment and Skills Mismatch
High unemployment (higher among youth) due to a mismatch between education outcomes and labour market needs.
Rigid labour laws discourage hiring, while a lack of vocational training limits workforce readiness.
Skills requirement shortage?
There is no database in SA to substantiate this point.
It is highly likely that due to the lack of economic growth, the absorption of skills suffers and is not visible as a result.
It is also possible that maintaining non merit based employment policies and thereby ostracising skilled people is a probable cause for collapse and trust. Refer to Eskom, a case in point.
Internationally, the retirement age is prolonged as a result of the extended life expectancy. Companies are really getting value for their money as a result. SA is or should be no different.
Given the historicity of the more than a decade’s lack of economic growth, it will be short sighted for asset managers to overlook the potential of the older “redundant” skilled work force to mitigate risk and to rely on the ability to build and generate growth.
Lack of Development
To use a farming analogy, more harvesting has taken place in SA and very little planting has been done. Refer to SA gross capital formation.
It is a systemic issue. People can only surf when the surf is up.
Lack of confidence.
Misaligned ideologies counter intuitive to progress and development.
Policy Uncertainty and Weak Reforms
Slow implementation of economic reforms (e.g., privatization of state-owned enterprises, anti-corruption measures).
Regulatory hurdles and bureaucratic inefficiencies deter foreign and domestic investment.
Corruption and Governance Issues
A sense of entitlement vs a sense of achievement is embedded in the SA politics. The main characteristic difference between the ANC and the DA.
Poor service and support to the economy is the result of this arrogance like attitude.
State capture scandals (e.g., during the Zuma administration) weakened public institutions.
Waste and/or inefficient public spending and mismanagement of state-owned enterprises (SOEs) like Eskom and Transnet.
High Inequality and Social Unrest
Extreme wealth disparity (one of the highest Gini coefficients globally) fuels crime and instability.
Protests and strikes disrupt economic activity.
Fiscal Pressures and Rising Debt
Large budget deficits due to bailouts for SOEs (e.g., Eskom).
Growing public debt (around 70% of GDP) limits government spending on development.
Crime and Security Concerns
High crime rates increase business costs (security expenses, insurance) and deter investment.
Rule of Law or the lack thereof
The poor performance of the NPA is very noticeable.
Accountability is not a high priority for the Presidency.
The political connected people are implicated in corruption.
Maybe the President is held at ransom? How has he amassed his wealth?
IMF & World Bank Recommendations
Accelerate energy sector reforms (private investment in renewables, fixing Eskom).
Improve transport and logistics efficiency (private sector participation in ports/rail).
Labour market reforms to make hiring easier and align education with job market needs.
Strengthen governance (anti-corruption measures, better SOE management).
Fiscal consolidation to stabilize debt while protecting social spending.
Back pre-94 the nation voted for transformation. A better life for all! A motivating frame of reference was a functioning South Africa as well as the scenic international domain. Nobody voted for the present actual SA reality. So what is wrong? It appears as if the ideologies (political will) of a President and the ANC is aimed at destruction and that his definition of transformation is diagonally opposed to for what it is internationally recognised. Maybe it can be argued that the recent US actions does not recognise the ANC Government and neither does the SA electorate. We are governed by the will of the SA minority. Who are these Oligarchs?