Co-authored with Christo Hattingh.
Discovery CEO Adrian Gore mentioned at the recent Leadership Summit that there is an element of “declinism” — a pessimism about the state of one’s country — in South Africa, and that it did not accurately represent the situation facing our country. While Gore might be correct that some things are improving, it cannot be denied that we are on a downward slope, and that if we continue to follow our current trajectory, there won’t be anything left to transform.
Speaking at the Free Market Foundation on 31 October, economist Dawie Roodt laid bare SA’s current fiscal situation and pointed out that, according to the Treasury, our GDP is expected to grow by only about 1.7% in 2019. Compared to emerging economies which invest an average 23% of GDP, SA’s fixed investment percentage is only 19%.
As a percentage of total GDP, the government spends 29%. Political vanity projects, for which we simply do not have the fiscal room — the National Health Insurance being one example — are planned and all they ever result in is increased bureaucracy, increased government size, and ultimately lower growth.