South Africa: National Health Insurance Bill Will Depress Confidence and Growth Further

(file photo).

Despite its very laudable and necessary long-term aims, National Health Insurance will hurt growth in the short term, exacerbate job losses and threaten short-term stability.

South Africa's growth momentum is a bit like wading through a sea of golden syrup. Or maybe coagulating blood - sluggish and sticky. And it's not clear how we get out of it.

Growth has been plodding along at 0.5% to 1.5% for the last five years. This is insufficient for South Africa in many ways.

Growth of sub-1% means that South Africa is not creating jobs. This is particularly problematic for young people. In the first quarter of 2019, the youth unemployment rate for those aged 15 to 24 years was 55.2%. For the next age group up, those aged 25 to 34 years, the unemployment rate was 34.2%. Aside from the loss of productivity of half a generation of people, a side effect of this dire state of affairs is a rising crime level. After declining steadily since 1993, when murders in South Africa peaked at 77 per 100,000 people, the murder rate bottomed at 30.1 in 2011. It has been climbing steadily since then.

Growth of sub-1% also makes South Africa's fiscal...

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