The latest GDP figures show that President Cyril Ramaphosa's investor drive is going nowhere. In fact, SA is losing its economic lifeblood, and a massive transfusion is needed soon.
When South Africa's shock GDP figures - which showed the economy had shrunk by 3.2% in the first quarter - came out on June 4, there was a lot of other data that underscored the scale of our misery. One very telling figure was that for gross fixed capital formation (GFCF). This refers to net investment and includes money spent on improvements to land, equipment purchases, and road and building construction.
In China for example, according to OECD data, GFCF has been expanding steadily at between 6.5 and 10% annually over the past few years. In 1992 it surged 75% and we all know what the Chinese economy has done since. And going back three decades it has never contracted. This helps to explain why China is the world's No. 2 economy.
In South Africa in Q1, it declined for the fifth consecutive quarter, by 4.5%. In real terms, according to Peter Attard Montalto, the head of capital markets research at Intellidex, it is down 5.2% since the end of 2017....
Read the full story on Daily Maverick.
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