Isn’t this the problem?

I looked at the figures a few different ways to decipher the dark arts of economics – consistent $ terms, PPP adjusted, etc, and the takeaway remains the same – that South Africa has not recovered from the 2008 financial crisis as well as other economies. For completeness here is the same graph in current $ terms (not adjusted for PPP) – the picture looks even worse.

We were on track with the rest of the world’s growth up to 2008 but flat lined for over a decade thereafter. We have dramatically underperformed the rest of the world and our peer group of middle income countries in long term economic growth. Without getting into the debate about broad based and inclusive growth, our per capita growth is flat or negative in real international or constant dollar terms. To state the obvious, its not really possible to grow jobs without growing the economy in real terms.

50%. This means, if our economy was 50% larger, we would have had 25% more jobs. The Q2 2024 labour force survey estimates 16 million employed which means by now we could have had another 4 million employed South Africans, which would have halved our unemployment rate from 33% to 17%. Imagine how much more tax could have been collected and put to use to improve our infrastructure, our education system, our health system (to say nothing of paying off our debt burden).

This period coincided with the start of load shedding, slow down in international and local investment, and suspected increases in corruption. South Africa did not do enough by global standards to maintain or improve its competitive position and has lost significant ground. We must be bold in putting plans in place to resume a growth trajectory if we are to solve the many socio-economic issues facing the country. While we cannot outgrow all of our problems, having a 50% larger economy (by now) would have made for much more prosperous country and massive improvements in the Social Determinants of Health.