http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 16.86Change: -0.03
R/$ = 14.69Change: -0.08
Au 1279.87 $/ozChange: -7.38
Pt 1060.50 $/ozChange: -7.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 06, 2012

SA’s economic leadership of Africa slipping away

Back
Pretoria|Africa|Defence|Denel|India|Industrial|Power|Africa|Brazil|China|Egypt|Ethiopia|Kenya|Nigeria|Russia|South Africa|Tanzania|Uganda|Industrial|Manufacturing|Oil|Services|Jacob Zuma|Mohammed Mursi|Nelson Mandela|Thabo Mbeki|East Africa
|Africa|Defence|Denel|Industrial|Power|Africa|Kenya|Tanzania||Manufacturing|Services||
pretoria|africa-company|defence|denel|india|industrial|power|africa|brazil|china|egypt|ethiopia|kenya|nigeria|russia|south-africa|tanzania|uganda|industrial-industry-term|manufacturing|oil|services|jacob-zuma|mohammed-mursi|nelson-mandela|thabo-mbeki|east-africa



Iwas reading a column last week in one of our leading daily newspapers when I came across a reference to the African National Congress (ANC) government’s “unpopular neoliberal economic and fiscal policies”. To be fair, the column was about constitutional and political issues, and written by a distinguished lawyer. But still, it was shocking to see a highly educated man display such ignorance of broad economic philosophies – philosophies that should be part of the general knowledge of all educated people.

It is true that all three ANC administrations – those of Presidents Nelson Mandela, Thabo Mbeki and Jacob Zuma – have followed a policy of fiscal discipline. But fiscal discipline is not a specifically ‘neoliberal’ policy. One can easily find examples of Roman emperors (who had no conception of a free market) maintaining fiscal discipline.

As for economic policy, if South Africa had followed a neoliberal one there would, today, be no Minister or Ministry of Public Enterprises and no State-owned monopolies dominating key sectors of the economy. Probably, the only State-owned companies left would be defence industrial group Denel (for military strategic reasons) and the passenger railways.
To reiterate: South Africa does not have, and has never had, a neoliberal economic policy.

As I have pointed out in a previous column, the South African government loves to associate with the Bric quartet of Brazil, Russia, India and China but steadfastly refuses to implement the kind of policies they undertook – the very policies that made them Brics.
This is odd, given the enthusiasm with which many in the South African government, the ANC and wider society have greeted the rise of these and other emerging powers.

Perhaps odder still is the widespread failure in South Africa to grasp that this country is not one of the rising powers at all. On the contrary, in relative terms, South Africa is one of the declining powers of the world. True, in absolute terms, South Africa continues to grow and is currently growing more strongly than the established ‘developed’ economies. But most of them are growing, too, albeit slowly, so their decline is also relative, not absolute. In comparison to many other emerging economies, South Africa is doing poorly and is falling behind.

Most seriously, the country is badly lagging behind many other African states. According to AfricanEconomicOutlook.org, in 2011, 38 African countries had higher rates of growth than South Africa. Now, of course, many of these are small economies coming off low bases. Some are rocketing upwards on the back of the global commodities boom. But not all are.

As The Economist pointed out at the end of last year (December 3, 2011), commodities account for only some 33% of Africa’s recent growth. The fastest-growing region of the conti- nent is actually East Africa, which has little oil and few minerals. AfricaEconomicOutlook.org estimates South Africa’s growth rate last year at 3.1%; its estimate for Ethiopia is 10.7%, Kenya 4.5%, Tanzania 6.4% and Uganda 4.1%.

More importantly for South Africa are the performance of the other two big economies in Africa – Nigeria and Egypt. Nigeria, benefiting from oil, is powering ahead. AfricaEconomicOutlook.org reports that the West African giant grew by 7% in 2009, 7.8% in 2010, an estimated 6.7% last year and is forecast to grow by 6.9% this year. The figures for South Africa are: 2009, – 1.5%; 2010, 2.9%; 2011, 3.1% and 2012, 2.8%.

Of course, South Africa has a bigger and more diversified economy. But, in 2009, in purchasing power parity (PPP) terms, South Africa’s gross domestic product (GDP) ranked twenty-fifth in the world, with a value of $507- billion, whereas Nigerian GDP ranked thirty-fourth at $341-billion. (These figures are from The Economist Pocket World in Figures 2012.) To put it differently, the Nigerian economy was already 67% the size of the South African economy. And it is closing fast.

Then there is Egypt. This economy is significantly larger and more diversified than Nigeria’s. In 2009, manufacturing accounted for 16% of the Egyptian GDP; the proportion for South Africa was 15%. (Services provided 47% of the Egyptian GDP and 66% of the South African GDP.) In 2009, Egypt’s PPP GDP was $471-billion, meaning it was almost 93% of the size of the South African economy.

True, Egyptian economic growth has been hit hard by the revolution. It stood at 4.7% in 2009, rising to 5.1% in 2010, only to plunge to an estimated 1.8% last year and is forecast to reach only 0.8% this year. But these upheavals will be temporary and the country may already, with the election of a new President, Mohammed Mursi, from the previ- ously opposition Muslim Brotherhood, have started the move from political turmoil to stability.

President Mursi’s priorities are reported to be political stability, a new Constitution – and the economy. And what economic philosophy does President Mursi and his party support? The free market. Or, if you prefer, neoliberalism.

If the incoming administration gets the economy growing fast again then, within a handful of years, Egypt will resume its traditional place as Africa’s biggest economy. That will have all sorts of serious political and diplomatic consequences for South Africa. Pretoria needs to get real about beneficial economic reform.

Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other News This Week News
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
DOROS HADJIZENONOS The 700-series devices provide network security monitoring, app control, URL filtering, VPN security, antivirus, antispam, antibot, and advanced intrusion prevention and detection functionality
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
More
 
 
Latest News
A new World Bank report warns that some regions of the world, including parts of Africa, could see their growth rates decline by as much as 6% by 2050 as a result of water-related losses, with water scarcity also exacerbated by climate change. Titled ‘High and Dry:...
Human Settlements Minister Lindiwe Sisulu
The Department of Human Settlements (DHS) has approved 101 “catalytic” public–private partnership (PPP) projects, valued at around R340-billion – more than half of which would be sourced from the private sector – that would mobilise and coordinate private-sector...
By 2050, agricultural productivity in Africa has the potential to increase by 70%, through technological innovation leveraged by the Internet of Things (IoT). This would meet the continent’s growing food demand which, based on population growth, is set to grow by...
More
 
 
Recent Research Reports
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
 
 
 
 
 
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
DOROS HADJIZENONOS The 700-series devices provide network security monitoring, app control, URL filtering, VPN security, antivirus, antispam, antibot, and advanced intrusion prevention and detection functionality
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $149 Close
Subscribe Now for $149