As tempting as it is to sing from the rooftops that "the technical recession is over!" it would also be extremely misleading. Yes, we did have 2.5% growth in the second quarter, but when you look at the bigger picture, the underlying trend in South African GDP has been overwhelmingly negative since 2011.
Perhaps more importantly, the average growth rate over this period is well below 2% — nowhere near the rate that is required for SA to reach the targets of the National Development Plan (NDP).
All of this makes me wonder whether it is time for the NDP to shuffle off to the same place where other growth strategies such as Gear (Growth, Employment and Redistribution) and AsgiSA (The Accelerated and Shared Growth Initiative for SA) have gone to gather dust.
The main reason being that as things currently stand, SA is about as likely to achieve the policy objectives of the NDP as Bafana Bafana are of winning the World Cup.
Since the NDP first burst onto the scene, analysts and others (myself included) have time and again made reference to the goals of the NDP as a benchmark against which we can measure our progress. There was good reason for doing this. The NDP is a fine document filled with sensible policy and unequivocal truths that served as the blueprint for hope for many South Africans — but they were designed for another time.
Statements such as "Rising employment, productivity and incomes are the surest long-term solution to reducing inequality" and "Active steps to broaden opportunity for people will make a significant impact on both the level of inequality and the efficiency of the economy" are absolutely true and typical of the straightforward approach and immediate appeal of the NDP. The problem is that these truths increasingly sit shoulder to shoulder with complete and utter fantasy.
To give you an example: "To achieve full employment, the country needs to create about 11-million jobs in the next 20 years. We estimate that the economy would have to grow by about 5.4% on average every year over this period to achieve this aim."
I don’t want to be a complete killjoy, but under the current circumstances, this reads like a complete fantasy.
In the same way that it is difficult to imagine being cold in the middle of summer, I can’t imagine how this was ever considered to be aspirational, let alone even vaguely possible.
It is clear that the problems in our economy are systemic and the lack of political will is endemic
I’m sure there was a time when we all thought that the biggest challenge to turning the economy around was changing the way we did things – tweaking policy and creating political will by putting the right people in the right places — but now it is clear that the problems in our economy are systemic and the lack of political will is endemic.
If I haven’t killed your buzz already, let me throw out a few key figures. The recent Poverty Trends Report shows that more than 30.4-million South Africans live in poverty. Of those, close to 14-million live in what is described as "extreme poverty" — these people live below the Food Poverty Line of R441 a person a month. These people are unable to buy or consume enough food to supply them with the minimum per-capita-per-day energy requirement for adequate health. The latest Quarterly Labour Force Survey shows that, of the 10.3-million South Africans between 15 and 24 years, 3.3-million are not in any form of employment, while another 3.1-million are classed as "discouraged" – they are willing and able to work, but have given up on looking for work. Imagine being 19-years-old and having already given up on ever having a job.
Among South Africans aged 25-34, the picture isn’t much better. Of the nearly 10-million people in this cohort, only just more than half have jobs.
Of the rest, the outlook is uncertain. Numerous studies have shown that the longer you are without work, the harder it is to find a job and also that it is substantially harder to find work if you don’t have a matric.
Why do these poverty and employment figures matter so much? Because it is clear that we need something more powerful than the NDP if our country is to have even the slightest chance of giving these young people — and those below them — even half a chance. Children who grow up in poverty are less likely to thrive at school and significantly more likely to drop out before they reach matric. Without an education, they have less chance of finding a job in an economic environment where even those with a high school qualification struggle to find any form of employment.
Speaking in Parliament last month, Reserve Bank governor Lesetja Kganyago said SA would be unable to create jobs at an economic growth rate of below 3%. Below this level, there will be more people entering the job market than the number of jobs being created. As things stand, the South African economy has grown only 1.1% year on year and those doubt that the second half of the year will show as much promise as the second quarter.
I suspect not much positive will happen to the economy until after December, when the party politics that have been paralysing the ANC have been sorted out.
Whatever the outcome of the elective conference, I hope it provides an opportunity for those in power to throw out the unrealistic ambitions of the NDP and prove with a few simple actions – rather than a 400-page document — that they are committed to improving SA’s growth prospects.
The NDP is an amazing document – it is what we should hope to achieve – but right now we need something far more basic: certainty and accountability. If we get that right, we are already halfway there.
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