South Africa: Time to Get Real On Infrastructure

analysis

The stream of awful economic data on the performance of the South African economy using almost any measure has become relentless and, latterly, monotonous. Well before the Covid-19 pandemic, South Africa was already in deep trouble - the consequence of at least nine wasted years - but the seeds of our current malaise were already sown before the catastrophic Zuma years.

What we face is a declining tax base and a large but ineffective and unaccountable public service. A very large and growing component of our public spending is made up of salaries paid to public servants.

At the same time, we face an already large national debt that increases, recently sharply, despite annual undertakings to bring government spending under control. Everyone knows that it can't continue.

At some point, there is a liquidity crisis. Borrowing more, even if supported by new interventions like prescribed assets, cannot go on forever. The economy has to grow at a much faster rate to circumvent very serious trouble that awaits. All this has to happen in a far less benign global context than we have had over the past two decades.

The Ramaphosa presidency appears to take the view that the economy can...

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