Solidarity has expressed concern about the state of the South African economy. This came after the latest GDP figures were released, indicating quarterly growth of only 1,2%.
“The 1,2% growth is not nearly enough to compensate for the past year’s continued decline. It will take a very long time for South Africa’s recovery to reach the pre-pandemic economic levels. Recovery does not only take place slowly; it is also being actively hampered by the government’s ineffectiveness. While in many cases the rest of the world has already made up for the losses of 2020, and is even growing, South Africa continues to wallow in a swamp of poor policies and often unnecessary restrictions,” said Theuns du Buisson, economic researcher at Solidarity.
According to Du Buisson, no single sector has shown significant growth to adequately offset the losses of 2020. Manufacturing, one of the few sectors that could result in sustained exports and jobs, has in fact shrunk. He further argued that industries such as transport, which has shown slight growth, are unfortunately too volatile for building an economy.
“A worrying trend that continues is the decline in fixed capital formation. Without sustained investment in equipment and infrastructure, the country will not be able to create sustainable prosperity. It declined in the first quarter, as the trend has been since 2018. People are therefore taking steps to undo their investments in South Africa,” Du Buisson said.
Du Buisson further believes that the vaccine program is not fully up and running because there is very little money for campaigns to mobilise people to receive vaccinations. He is of the opinion that the government is in fact not pursuing any opportunities to get the country out of its lockdown state so that people can return to “normal”.
“Continued lockdowns, restrictive regulations and legislation are all the order of the day, and our economy is suffering. It is time for the state to realise that it has no management abilities and that it must impose fewer controls by the state, relax its regulations, end the lockdown and allow the private sector to take control and stimulate growth,” Du Buisson concluded.