South Africa’s economic future is uncertain, with some analysts suggesting fundamental political change may be necessary for sustained growth. This assessment comes following a panel discussion at North-West University’s Business School focused on the direction of policy in an election year.
Dawie Roodt on the ANC and Economic Control
Chief economist at Efficient Group, Dawie Roodt, expressed pessimism regarding the country’s economic prospects under the current ruling party. Roodt stated that the country’s economy will only begin to grow “once the ANC goes” because, according to him, the party’s “default position is to keep control.” He suggested complete removal of the ANC from government is necessary for a resilient economic recovery.
Criticism of Government Policy
Roodt specifically criticized Minister of Electricity Kgosientsho Ramokgopa’s decision to keep the transmission of electricity within Eskom, rather than separating it for private sector participation. He argued this decision stemmed from ideological control, stating, “He did that because that’s what his ideology tells him.” He further criticized President Ramaphosa, asserting that the president’s “heart is not in private participation.”
Analysts’ Mixed Outlook
While Roodt was critical, other analysts participating in the discussion offered a more nuanced view. They acknowledged the country remains in a “dangerous zone of ongoing stagnation,” but noted a recent rise in GDP growth as a potentially positive sign. Although, Roodt questioned whether the ANC, given its track record, is capable of leading the country to sustainable growth of 3% or more.
Private Sector Involvement and Reform
Despite the concerns, some analysts lauded recent government reform measures, such as Operation Vulindlela. Momentum Investments chief economist Sanisha Packirisamy emphasized the importance of increased private sector involvement in socioeconomic projects, noting it could provide additional funding and expertise. There is reportedly an appetite within the private sector for infrastructure development projects across Africa.
Claude de Baissac, founder and CEO of Eunomix, pointed out that recent economic announcements have focused on short-term gains rather than addressing 15 years of consistent underperformance. Packirisamy cautioned against “short-termism” and predicted that fixed investment growth, and therefore 3% growth, is unlikely before 2027.
Frequently Asked Questions
What is Dawie Roodt’s position on the ANC?
Dawie Roodt believes the ANC must be removed from government for the South African economy to function properly and experience resilient growth. He stated, “The ANC is the reason we are where we are today.”
What was criticized regarding Eskom?
Dawie Roodt criticized Minister of Electricity Kgosientsho Ramokgopa’s decision to keep the transmission of electricity within Eskom, arguing it stifled private sector participation.
What is the general outlook for South Africa’s economic growth?
Analysts expressed mixed views, recognizing ongoing stagnation but acknowledging a recent rise in GDP growth. However, some, like Dawie Roodt, questioned whether the ANC is capable of achieving sustainable growth of 3% or more.
Given the complex interplay of political and economic factors, what role will private sector investment ultimately play in shaping South Africa’s economic future?
