VIDEO: Matthew Lester’s #SONA2016 snippets – The bulging population dynamic

In this fascinating series by tax guru Matthew Lester, he unpacks what should be front and centre at this year’s much anticipated State of the Nation address. In the first snippet Lester asked why there’s such a focus on Nkandla when it should be about the people of South Africa. In this part, Lester looks at South Africa’s growth. And it’s not that of economics, it’s the population dynamics. There are some shocking figures here. Take a look. Full transcript below. – Stuart Lowman

By Matthew Lester*

Question 2 in our SONA 2016 snippet series is, “How fast is South Africa growing?” The President will probably talk about economic growth rates and the fact that our growth rate has declined from four percent before 2008 to an average of two percent over the 10-year period we’re currently dealing with. At the moment, it’s around one percent – but that’s economic growth rate.

It’s also important to look at South Africa’s population. If one takes the birth rate less the death rate, South Africa is growing by about 650,000 p.a. or 50,000 people per month. That’s enough to fill a calabash every two months (or six times per year).

In the initial assumptions giving rise to the NDP, they said South Africa’s population would level off at round about 60-million people. However, they just forecast from Stats SA so that even by 2030, there will be six million more South Africans as catered for in the National Development Plan. What is being done to address this issue?

Of course, people will say this will completely overwhelm the grant system. If one looks at the grant system, it is coping very adequately with South Africans today. The problem that we get is the age group (15 to 64) or what we call ‘the bulging middle’. That group is growing and growing and one has to say, “What are their prospects of ever getting a job?”

If you turn 19 in South Africa, what does your future hold apart from being allowed to vote? You lose your Child Grant. The education system is not working and youth unemployment is rampant.

  • Rhodes University Professor Matthew Lester was educated at St Johns College, Wits and Rhodes universities. He is a chartered accountant who has worked at Deloitte, SARS and BDO Spencer Steward. A member of the Davis Tax Committee investigating the structure of aspects of the RSA tax system, he is based in Grahamstown.
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