by Hussein Solomon
Election posters adorn streets, talking heads on television continue to discuss the impact of this or that political party’s rally and potential voters are being assailed by party campaigners at their home, on the radio as well as on social media on why they need to vote for this or that political party.
Yet few social commentators, never mind the political parties themselves wish to deal with the ticking economic time bomb at the heart of the nation. Current economic policies are not working and this is most obviously seen in the fact that Nigeria with a Gross Domestic Product (GDP) of US$ 509 billion has recently surpassed that of South Africa’s with an almost puny-looking GDP (given its potential) of US$ 380 billion, making Nigeria Africa’s largest economy. This is set to widen with the Nigerian behemoth growing at 7 percent per annum compared to South Africa’s anaemic growth rate of a paltry 2.3 percent.
|South Africa: Open to investment?|
To compound matters still further South Africa is raising barriers to investment – crucially this is being done in the context of slowing growth in India and China and where the Eurozone’s economic woes continue whilst the US economy continue to register sluggish growth. Consider the following: a foreign investor in the resources industry is expected to hand over a fifth of the investment to the South African government. The private security industry as well as the electronics industry, meanwhile, has to hand over a whopping 51 percent of ownership to the state. Given the poor savings rate in South Africa, there is little domestic investment within its borders to make the necessary investments to grow the economy. As a result, South Africa is dependent on foreign capital to grow the economy. Unfortunately under the African National Congress (ANC) government, foreign investors are increasingly being deterred to put their money into the country given the ruling party’s socialist bent. Far from learning the lessons of failed socialist policies elsewhere in the world and on the African continent, the ANC is doing its utmost to repeat them – dragging all South Africans and the region into the economic abyss.
Ultimately, it is the youth who suffer the most from such insane policies. This is reflected in the escalating figures of youth unemployment in the country. Such economic tragedy is bound to impact negatively on social stability as is evident with the rise of violent social delivery protests where unemployed youth is playing a key role in chasing local councillors out of townships and setting fire to government buildings. Economic catastrophe beckons if a radical about-face is not realized.