SA’s on slippery slope towards a failed state, barring urgent action – report

South Africa’s future hangs in the balance because of a vacuum of ethical and courageous leadership, coupled with stunted GDP growth, political uncertainty and fragile social cohesion. The Institute for Risk Management South Africa’s 2022 Risk Report highlights several pitfalls bedevilling the country and informing three possible scenarios likely to play out in coming years. These scenarios include the perpetual hangover; fake it until you make it or not, and owning our future. BizNews spoke to IRMSA’s chief risk advisor, Chris Palm, about the prevailing risks for the country, what pivotal shifts could remedy the situation, and whether or not he believes we’re a failed state already.

Chief risk advisor Chris Palm on the risk in SA at the moment

I think from an insight perspective and from the work we do from a South African risk report point of view, we’ve been talking about this, let’s call it a slippery slope, since 2016, as a matter of fact. And we’ve been highlighting pretty much the landscape that we believe are the drivers for understanding that if we don’t fix this, we will become a failed state. From that point of view, I thought we added quite a lot of value in as far as identifying those drivers and of course also the pivots around them, meaning if we can address some of the causes around these risks, then of course we can make a difference. If you ask how risky South Africa is, I believe if you look at the signs out there, and we are tracking literally the nine risks that we’ve identified, I think in summary, we are extremely risky at the moment. We may have come very close to our risk bearing capacity as a country. 

On the three scenarios and what they involve

We’ve come up with the three, “the perpetual hangover”. This is really just short-term, this is all about firefighting. We don’t respond adequately to the challenges. And if we do, it is based on the immediate, the here and the now. No real strategic foresight, no real thinking about the risks in the future. And it is also characterised by the fact that we think the future can be fixed with things that we’ve done in the past. So that’s sort of the perpetual hangover. It is the state just pursuing its own goals. There is no collaboration, there’s no thought leadership and of course very little, if any, ethical and committed leadership. 

Then we move into the “fake it until we make it or not.”  From this point of view, the whole perpetual hangover is responded to by setting lofty goals, by talking the talk, and unfortunately then not supporting that by execution. And that, I believe, if I have to highlight, is one of the biggest causes in South Africa of our risks materialising. We do not execute. We’ve got a huge execution risk and that is also then supplemented or perpetuated by the lack of consequence management, lack of performance and consequence management. 

And then of course, what we have is owning the future. And this is where we are really concerned about the wellbeing of our country. We take it seriously, we apply strategic foresight, we build consensus, we collaborate with roleplayers, we collaborate with the private sector, the public sector, with the stakeholders of South Africa, potentially even globally, I would suggest. And we optimize what we have as a country and we strive towards, you know, these common goals and we make informed decisions on how to drive towards these common goals.  

On if there’s anything in the analysis that points to what happens if the ANC loses its majority in 2024 and if that changes the risk trajectory

The biggest cause of many of our risks is the lack of ethical leadership, the lack of visionary leadership, and the lack of consequence management. So if we use that as the filter or the lens  through which we’re going to look at 2024, my answer is that if we don’t change the leadership, of course we will get the same old, same old. And I’m hoping, not being political, but looking at what we need to change for our risk profile for South Africa that the expectation would be that hopefully at the voting polls that would be considered when we cast our votes. Because the view – and it’s evidenced in the report – is that if we don’t change that, not the political parties, but the behaviour, of course, we are looking to work ourselves into a perpetual hangover.

On if he sees South Africa becoming a failed state

No, as an individual, I am not. But there are many that are quoting the social disobedience or social unrest. The GDP growth, the unemployment. if you take into consideration the price hikes and then you add into the mix loadshedding, that’s impacting businesses strategies. They are scaling down, they are limiting their negative exposures with very little upside or leveraging of opportunities. So you can imagine unemployment growing. You can imagine that the income disparity will be growing,  

We need to have committed leadership, not for individual gain, but for our country, for the benefit of South Africa. And we have to hold people accountable, and therefore we need to fix the system. We need to fix the justice system. We need to fix the security system.  

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