South Africa has settled into an uneasy calm with the help of the SANDF which has been deployed to violence hotspots. While the deployment of 25 000 soldiers is the country’s maximum show of force, the country remains largely anxious and fearful of the weeks to come.
The coordinated violence and sabotage caught political leadership completely off guard and the question of whether it has lost touch with the mood of the people has been asked. It is evident that the answers to this question are cause for unpleasant introspection.
For the last decade South Africa has been defined by corruption and greed, criminality, opportunistic politics and a failed criminal justice system. The pressure cooker was always going to explode. The societal and economic devastation caused by the COVID-19 pandemic merely ramped up the temperature on an already volatile situation.
The dire circumstance of the country was highlighted by ratings agency S&P Global in March this year through the publishing of its ‘Misery Index’. It compared South Africa to other emerging markets considering factors of inflation and job creation.
S&P said that the appearance of South Africa – the third-largest economy on the continent – on the list of top 10 MIs in the EMEA region is unsurprising, given the steady decline in investment/GDP from around 21% in 2015 to 18% in 2019.
This is because the domestic corporate sector has preferred to invest abroad rather than domestically, it stated.
“A mature mining sector, a dysfunctional labour market, with unemployment having averaged 28% in the last decade, and considerable impediments to competition, due to high concentration in sectors such as retail and banking, explain the absence of dynamism in the South African economy,” it said.
“Among variables that stand out, South Africa has a weak track record of creating new companies – and the high failure rate of SMEs.” It added that the country’s subpar growth performance has contributed to its very difficult fiscal predicament, with fiscal flexibility extremely constrained at this point, after the deterioration in the budgetary position (fiscal year 20/21) to close to 16% of GDP.