The mood in South Africa is particularly gloomy at the moment as the New Dawn that President Cyril Ramaphosa promised, remains a tiny glimmer of light on the horizon. Ramaphosa is distracted by in-fighting in his own party, using the Public Protector to attack him and restricted by policies adopted by the ANC including land expropriation without compensation. This is preventing him from undertaking the structural reforms that would bring foreign investment to South Africa that Ramaphosa so sorely seeks. The gloomy mood is adding to people’s perception that they should be packing for Perth or to English-speaking destinations where their future prospects are better. The interesting new element to the emigration of South Africans is that the emigrants are not all White; many well educated Blacks are leaving as well. Alec Hogg interviewed Azar Jammine from Econometrix on BizNews Radio where he said there appears to be an increase in emigration, but remains positive that Ramaphosa could surprise the doomsdayers. – Linda van Tilburg
Azar Jammine said that over the last year or more there had been a very perceptible increase in the rate of emigration. He could however not conclude that the actual rate of emigration had accelerated but figures of the past decade show that it had been a persistent trend. There had been a growing disillusionment with the manner in which the government was tackling structural reforms, which suggested that economic growth was going “to remain pedestrian at best in the foreseeable future leading to still more unemployment and the negative social consequences that it could bring about.”
Jammine also said by all accounts it was not only Whites who were emigrating, some of the Blacks who perceive themselves to be categorised as so-called “clever Blacks” by some of the faction within the ANC are getting disillusioned with the manner in which the economy was panning out and were looking for greener pastures elsewhere. He said he had found that this group of Black people were in demand if they had the appropriate qualifications. Studies had shown that the people who emigrated, were proportionately better qualified than the average of the current level of education of people to the countries to whom they emigrated.
The aspect of this trend that was worrisome was to which extent this was going to impact negatively on the tax base of the country. A lot of emphasis had been put on the manner in which Tom Moyane destroyed the South African Revenue Services and the way it had harmed the country’s ability to raise taxes. Jammine said he wondered whether all the problems at SARS could be attributed to Moyane or whether there is an underlying deterioration in the country’s tax base as a result of the loss of the best earning members of the population.
“You have 0.05% of people earning over a half a million rand; they account for 69% of all personal tax earned.” He said the positive way in which it could be looked at was that the person earning over a million grand a year could at least have the comfort of knowing that theoretically his personal taxes could keep 70 to 80 people alive in South Africa through social grants.
“People ask me is the downside in the economy not greater than the upside.” Jammine remained convinced that the upside potential was as great as the downside potential if only the government would start embarking on certain structural reforms. He said people were becoming disillusioned at the moment because they felt that the government was staling in undertaking those structural reforms, but it was not impossible that one might see a sudden and dramatic turnaround in the way in which some of these issues were being addressed.
Jammine believed there was a ray of light, that “Ramapahosa somehow may just surprise at how he manages to sort out the factional politics within his organisation and start running the country in an appropriate way that actually restores economic growth to a much higher level.” He said one did not need to have any dramatic changes to bring about a very significant turnaround in confidence in the country.