BRIAN BENFIELD: The embers of SA’s renewal remain warm

Few nations in the postcolonial era began their democratic journeys with so rich an inheritance.

When apartheid fell in 1994, SA stood as the continent’s industrial giant. Among much else besides, it possessed world-class infrastructure, a sophisticated financial sector, globally competitive industries, an airline of international repute, functional utilities and a highly trained professional class.

Three decades later, the nation stands gravely diminished. Growth has flatlined; public infrastructure is in decay; state institutions stumble; unemployment is among the worst in the world, while inequality deepens remorselessly. Countries once far poorer, South Korea among them, have surged ahead; its per capita income is now more than eight times SA’s.

This calamity is not the product of fate. It is the result of deliberate choices. Ideology was placed above pragmatism, loyalty above competence, and political dominance above shared prosperity.

Dysfunction

At democracy’s dawn, the foundations were formidable. Eskom supplied abundant, affordable electricity and was rated among the best utilities globally. By 2023, unthinkable in 1994, rolling blackouts became near permanent, slicing billions annually from GDP. Transnet once moved goods with speed and reliability, the public service retained skilled professionals, and the Reserve Bank and financial system enjoyed international respect.

That inheritance has been methodically squandered. Cadre deployment supplanted merit. State institutions, rather than engines of development, were refashioned into instruments of patronage. Professionalism yielded to connection, technical skill to political fealty. The state no longer exists to serve the citizen but to distribute jobs, contracts and influence to pals.

The results are visible in every quarter. Eskom became a byword for dysfunction. Transnet, once the spine of our export growth, is incapacitated by incompetence, inefficiency and neglect. Police are ostensibly infiltrated by criminality and ineffective against rampant crime. Schools and hospitals, though nominally expanded, routinely falter in performance. Water supply, sewerage systems and roads collapse across wide swathes of the country.

Unemployment lays bare the devastation of these policies: from 3.7-million people jobless in 2000 to 9.5-million without work by mid-2025. Nearly two-thirds of youth are unemployed. Overall, 42.9% of fellow citizens are jobless, including the “discouraged” who have ceased looking for work. This is a powder keg. This is an indictment of historic proportions.

Personal enrichment over service

None of this was accidental. It was entirely predictable. It flows from a system that has enthroned power over performance, ideology over evidence, and personal enrichment over public service.

Asia provides the counterpoint. In the very decades that SA faltered, Malaysia, Vietnam, Thailand, South Korea, and Singapore, many emerging from colonialism, war and occupation, chose pragmatic policies rooted in free enterprise and export-led growth. They invested in skills and infrastructure, protected property rights, actively encouraged untrammelled free enterprise, and anchored their own legitimacy in economic achievement. They understood that prosperity secured harmony and stability.

SA charted the opposite course. Neglecting infrastructure, smothering investment with uncertainty, BBBEE and foreign exchange controls, threatening expropriation, rewarding mediocrity, taxing excessively, and indulging patronage. Where Asia leapt forward, SA slid backward.

The Fraser Institute’s Economic Freedom of the World index tells the tale. In 2000 SA ranked 47th out of 165 countries. By 2024 it had fallen to 111th into the “mostly unfree” category, below the global average. Between 1994 and 2024, our country’s GDP per capita grew by just 102%, a fraction of Thailand’s 220%, Malaysia’s 225%, South Korea’s 250%, and the world’s freest economy, Singapore’s, 390%. The scale of lost opportunity is both staggering and heartbreaking.

The causes are plain to see. Erratic policy, racial preferencing, investor hostility, suffocating taxation, and corruption on an epic scale. State capture alone cost at least R500bn, an entire stolen decade of growth. By contrast, Asian peers imposed the most severe penalties for corruption, upheld consistent investor-friendly policy, and embedded themselves in global supply chains. They delivered growth to their citizens and therefore jobs and prosperity.

SA’s malaise is not merely economic but civilisational. Political freedom was won while economic freedom was forsaken. Citizens may cast ballots, yet cannot rely on electricity, clean water, safe streets, hospitals that heal, or schools that educate. Freedom exists in form, but its substance has been hollowed out.

Way forward

Still, the embers of renewal remain: SA has deep capital markets, a resilient private sector, world-class professionals, vast natural resources and youthful potential. Private investment in renewables already lightens Eskom’s load. Business-government partnerships hint at the delivery possible under competent stewardship. Courts and commissions, though beleaguered, continue to expose corruption and prove that accountability is not wholly extinguished.

The path forward demands resolve:

• Merit must replace patronage. Skilled professionals, not political loyalists, cadres or deployees, must be entrusted with public service.
• Policy certainty and rationality must replace ideology. Secure property rights and proportional, predictable and judicious regulation are the sinews of investment.
• Accountability must be enforced. Prosecutions must ensnare both the powerful and the expendable.
• Private enterprise must lead where the state fails. In energy, logistics, mining, agriculture, transport, finance, banking, insurance, healthcare, security and education, the private sector must be enabled to deliver.
• Civil society must remain vigilant. Courts, media and civic organisations must continue to act as guardians of transparency and reform.

Our country’s tragedy is not the absence of opportunity but the reckless waste of it. Few nations, born with such an endowment, have dismantled it so thoroughly and so determinedly.

Yet decline is not destiny. History shows that nations can reverse course if they enthrone competence, accountability, unobstructed free enterprise and growth.

The alternative is stark. Continued stagnation, decline and continental irrelevance. The choice cannot be deferred. SA must decide whether it will remain the land where freedom was won but prosperity lost, or whether it will redeem its squandered promise.

• Dr Benfield, retired Wits University economics professor, is a senior associate and board member of the Free Market Foundation.