South Africa: Lack of Economic Freedom Holds South Africa Back

opinion

South Africa's ranking in the top half of 2019's Human Freedom Index conceals the fact that its score is dominated by personal freedom, while economic freedom lags behind. Besides corruption and the electricity crisis, this is the main reason our economic indicators remain so bleak.

The World Bank recently cut South Africa's economic growth forecast for 2020 to below 1%, on the back of electricity supply concerns. This is significantly lower than both Treasury and the SA Reserve Bank officially anticipate, and would extend sub-1% growth for the third year running. It hasn't been above 2% since early in 2015 and hasn't seen 3% since late 2013. The low growth since 2015 is unprecedented since 1994, with the exception of two short-lived blips in 1998 and 2008/9.

Although the global growth outlook is subdued, South Africa cannot blame it on global economic conditions. Its GDP growth rate is far lower than the 2019 average of 1.4% for emerging markets and developing economies, as estimated by the International Monetary Fund (IMF). It is lower even than the IMF's 2019 growth rate estimate for advanced economies, which, led by robust growth in the US, stands at 1.9%.

GDP per capita, which in...

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