On a range of social, economic and governance metrics, South Africa has continuously recorded a decline in its performance since 2007. This decline is worse than any other country that is not at war, according to the Johannesburg-based political-risk advisory company, Eunomix Business and Economics Ltd.
Despite the country’s 1.3 percent 2019 growth projections by the World Bank and economic recovery prospects by economist Azar Jammine,
Eunomix noted that the decline is likely to continue, no thanks to corruption and stagnant policies under former president Jacob Zuma.
The country which exited a technical recession barely five months ago in December 2018, is still battling in the consequences of nine years of bad governance and the fragility of the economy may also limit incumbent President Cyril Ramaphosa.
The President, whose economic plans to save the economy have been undermined by foes, faces his first national election on May 8. However, “there is the strongest likelihood of him being a one-term president,” Claude Baissac, the head of a Eunomix, said in an interview as reported by Bloomberg.
“He is starting with a very weak economy, the weakest of any president since Mandela. He is also starting with a fairly weak hand from a political standpoint,” Baissac had said.
Based on Ramaphosa’s structural and economic reforms, the World Bank forecast that South Africa’s economic growth will accelerate to 1.3 percent in 2019 rising to 1.7 percent in 2020 from an estimated 0.9 percent in 2018. Even some other bodies and financial advisors have forecast positive outcomes for the country but Eunomix Business thinks otherwise.
According to the Johannesburg-based political-risk advisory company, the likelihood of turning over the economic decline to growth is limited by the unsustainable structure of South Africa’s economy, in which economic power is largely held by an elite that wields little political influence; a product of its apartheid history and its status as one of the world’s most unequal societies.
Many politicians enact bad policies, mainly because they are in politics for themselves; their personal enrichment. When their interest forebears the interest of the economy, it is difficult for them to make decisions that will boost economic growth.
“Economic policy serves narrow interests, thus generating insufficient and unfairly allocated growth…Populism, rather than developmentalism is an easy temptation, with the economy a tug-of-war between mutually distrustful groups,” Eunomix stated.