A large threat to the long-term growth prospects of the SA economy is the loss of essential skills to emigration. Such losses have been a continuous drain on the growth potential of our economy both before and after 1994.
That US President Donald Trump has seen fit to champion the cause of white South Africans who feel they have been discriminated against could be even more damaging to the country than imposing higher tariffs or denying aid. The drain of emigration could become a flood, a severe potential loss that might be avoided by seeking the friendship and support of the US rather than so gratuitously incurring its ire and enmity.
How could this be done to the benefit of SA and its growth prospects? I would suggest by doing in SA what Trump aspires to do in the US. That is, for SA to become a truly colour blind and meritocratic society and economy.
Our policies over the past 30 years have focused on restitution for black South Africans rather than on stimulating growth. Understandable, perhaps, but ultimately self-defeating.
Economic growth would be greatly enhanced by unfettered competition for jobs and contracts to supply the state and its agencies. This process would be particularly helpful to the least advantaged poor of SA in the form of well-paid jobs, and indirectly in the form of the better education and healthcare that only a prosperous and competitive economy could afford.
BEE clearly does not benefit the poor. There must come a time when the highly educated and talented black elite of SA are willing to compete on their own considerable merits for the commanding heights of the economy and its governance. The sooner that happens, the better for growth and our international standing.
Faster growth may not reduce inequality and should not be expected to do so. Those who have already may well be given more and be resented when it has a racial or ethnic basis. But envy should not be allowed to frustrate the realisation of the greater good, as it has to date. Higher incomes earned fairly by providing superior service to customers and employers should be applauded, not resented. Growth is a positive sum game.
How badly has the SA economy been doing? According to the recent, extensive Income & Expenditure Survey of 19,940 households conducted by Stats SA, it has been doing unbelievably badly. Literally unbelievable, since its estimates of household income and expenditure and their distribution by race are so widely different from the national income estimates that they should be rejected.
The survey estimated that between 2006 and 2023, inflation-adjusted household consumption expenditure of all SA households declined by a real 1.9%. Real black household expenditure, with a 62% share of all spending, is estimated to have risen by an impressive 36.2% over these years, while the household spending of increasingly poor white SA households is estimated to have declined by 21%.
Households headed by those with a tertiary qualification seemingly did even worse. They apparently saw their expenditure decline by 29.2% between 2006 and 2023. No case for envy here — if it were true.
The income story is seemingly less depressing. Black-headed households are estimated to have seen their incomes rise by 46% between 2006 and 2023, while white incomes declined by only 7.7%. All household incomes are estimated to have grown by 5% since 2006. This suggests a completely implausible and unobserved increase in real household savings — the difference between incomes and expenditure.
By contrast, the National Income Statistics record that real household disposable income rose by 42% between 2006 and 2023, while real household consumption expenditure increased in line, by 37% over that period.
Such inexplicable differences in the measures of income and expenditure need reconciliation. What does it all imply for the reconstruction of the weights in the consumer price index that depend on the survey? And for our measures of inflation?
• Kantor is head of the research institute at Investec Wealth & Investment. He writes in his personal capacity.
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