MBA from University of
Leicester
There are a lot of people who will say that South Africa is poor because of the history of racial segregation that existed prior to 1994. Yet compared with countries that are adjacent to South Africa, the GDP per capita of South Africa is higher. Here are some figures:
Zimbabwe
: 1079 USD.
Botswana : 7595 USD.
Swaziland : 3224 USD
Lesotho : 1181 USD
Namibia : 5227 USD
Mozambique : 415 USD
South Africa : 6160 USD
Of these, the only country that is higher is Botswana. The differences are marginal. If you go further north, you get to places like Zambia which has 1509 USD, Malawi at 338 USD, and Angola at 4170 USD. Africa’s largest econmy, Nigeria has a GDP per capita of 1968 USD. So out of the 50 or so African Countries, South Africa hovers in around 3rd place, after Botswana and Algeria.
Somehow critics who explain this with the “racial history” argument want you to believe that somehow the other countries in Africa are all worth ignoring. They want you to believe that South Africa has “poverty” which is somehow impossible to compare with other African countries. There was no apartheid in Botswana, so sure, they are higher. Yet there was no Apartheid in Mozambique, or Malawi, or many other countries, so what exactly is supposed to explain those numbers. The racism argument is therefore just for lazy people who fail to look past the obvious news articles.
A more likely argument is demographics.
In the past the ratio between the various subgroups in Africa was different than today. The percentage of white folks was bigger compared with today. The black population subgroup grew massively since 1960. This was partially politically motivated since leaders in the ANC wanted to expand their political power with sheer numbers. Winnie Mandela was a huge promoter of bigger families among her followers. Added to this, the Zulu nation among others believes culturally that having many children is a sign of wealth. The Apartheid government added to this by providing largely free healthcare to large groups of black folks. This meant less infant mortality. At one point the largest hospital in the Southern hemisphere was located next to the largest planned black population (Soweto) in the Southern Hemisphere. They were delivering up to 60 000 babies per month. This trend ran for many years. The black population soared.
Here is the graph:
(Source: We are running out of whites)
At the same time there was GDP growth. However it could never keep pace with the population growth. As a result, the country gradually became poorer. The transition into ANC led South Africa then provided additional incentive schemes for “the poor” by giving them money per child per month. This was exploited with women relying on the state for income. Some would even borrow children to fraudulently claim benefits for their babies (which were rented from other women). There is little incentive to marry and have one husband father your children, when the state will provide you with “support”. Which turns out to be below the requirement to raise the child. But that is another matter.
Through failed schemes like this, the ANC has expanded social grants from around 3m in 1994 to around 17m today. So in terms of a percentage of the overall population, people are becoming more desperate. The ANC has also done the following:
These among others make it extremely difficult to run a business in South Africa. Then to add to that, the ANC endorses Venezuela and Zimbabwe style expropriation which allows the state to take “property” without compensation. The way that the legislation is worded means all property.
So simply put the ANC hampers business.
They then blame the increasing poverty on a fictitious “white monopoly capital”. Which is followed by race based politics and threats by political leaders to white business owners. These translate into uncertainty in the business community. Which is why the Rand, the South African currency trades well below its true value to the US Dollar.
Another important fact to consider is that 3.3m people pay for 98% of the taxes. This is not widely publicized. Instead many of the various agencies, state bodies, NGO’s and such spend their time justifying the current policy. They believe that taking from the 3.3m is fine in order to fund the 17m people on state support. They also don't see the population growth rate as a problem. This attitude smacks of a sort of budgetary ignorance or mathematical ineptitude. Where their political leanings make something OK regardless of the affordability of such policies. It is as if it is somehow OK to …
Anything that goes against the prevailing logic is deemed “racist” if it is from anybody who is not black. If it is from a black person, then another form of attack is usually used. There is not a culture of careful and civilized debate in South Africa. Critics are dealt with using conflict, force and silencing tactics.
While the EFF may be losing popularity, its share of the vote went up in 2019 elections held a few months ago. So the claims of it losing popularity may be overstated. It is the 3rd largest party in South Africa. And the fastest growing party as well.
Adding to the problem, many white people are simply leaving South Africa. They are tired of the exclusion, marginalisation and racism of the ANC and its supporters. Anybody with money is simply leaving South Africa. There is huge divestment taking place at the moment. An interesting thing is that the more black folks are leaving South Africa than whites. Which illustrates just how antagonistic the environment is. This is a strong trend and only getting bigger. The upper and middle classes are shrinking under the strain of increasing taxes, increasing violence and increasing corruption within the government. They take their money, skills, assets and family with them. That further decreases the tax base, the employer base and the investment base. The currency gets weaker as a result. Yet … the Government does not see a problem with this. In the words of Mr Mandela who once said “Good riddance” to them. Instead of sitting down and looking at the issue, they simply saw people who left as “racists”. Ignoring the fact that it included many wealthy black people as well. This sort of race based politics is typical of the ANC and its leaders since its inception.
The flip side of emigration is that getting a work visa for a foreigner to come and work in South Africa is a difficult and onerous undertaking. There is a lot of red tape, and a lengthy application to complete. Thus South Africa is getting less skilled in its workforce all the time.
To conclude. The population in South Africa is growing very rapidly. The growth of the population far outstrips the growth of the economy. This growth occurs almost exclusively among the Black people in South Africa. The government is antagonistic to business and has a strong alliance with the communist party in South Africa. They all have the same mindset and values. Racism and blaming the failures on whites is merely a political ploy, and has been for some time. At the same time, it underpins the entitlement and blame that is rife. South Africa is still much richer than many other African countries and as a result attracts many black folks from neighboring countries for work and income opportunities. Foreigners and foreign investment is not well received. The recent hostility, violence and hatred is widespread and many foreign businesses, people and companies have been attacked, or killed. There is widespread lawlessness which is left to spread. This hostility to anybody who is not part of your group is termed “xenophobia” when its black on black violence and hatred rather than racism since that would expose the inherent tribal politics of the ruling party and their supporters.
The leaders of the country and the people who voted them in, appear content with this status quo. Therefore its somewhat certain that the current trend of a decreasing GDP per capita are likely. Its has been decreasing since 2014 and is clearly negative.