After a year under the “government of neoliberal unity” nothing has changed for the SA economy, with low GDP growth and rising unemployment. The GNU is implementing the same failed ANC economic policies that have created the post-apartheid economic crisis, with unemployment rates of 72.4% for youth, 47.5% for Africans and 51.7% for African women.
As Moeletsi Mbeki said in a recent speech at the Xubera Institute: “If there is no change in our levels of unemployment and poverty ... whatever the GNU is called will not change anything. I call the GNU the ANC in drag because most of the ANC’s policies are in place and are continuing. The other parties like the DA and Rise Mzansi are on the margins of the game.”
GDP growth has been flat, declining by 0.3% during the third quarter of 2024. During the next two quarters there was growth of 0.4% and 0.1%. There have been three consecutive quarters of declining final consumption spending by the government. It boggles the mind how the government can believe cutting spending will grow the economy. Nobel economics laureate Paul Krugman describes the doctrine of “expansionary austerity” as a zombie idea. During 2025 SA is likely to have a third consecutive year of GDP growth that is less than 1%.
From the second quarter of 2024 to the first quarter of 2025 the labour force increased by 444 ,000 people, but the economy created just 135, 000 jobs. There were 33,000 jobs shed in the formal sector and 82,000 in private households. The growing labour force and job losses pushed 216,000 people to try to eke out a living in the informal sector. The number of unemployed people increased by 309,000 to 12.7-million. The unemployment rate for people of all races increased to 43.1% from 42.6%.
It is clear that the GNU just is an elite attempt to manage the continued impoverishment of the population and the decline of the economy in the hope that there will not be a violent political eruption — an SA spring.
According to my projections on this trajectory, based on an annual average GDP growth rate of 1.5% the number of unemployed people will increase to 14.4-million by the end of the GNU’s term in 2029 — in the unlikely event that it lasts that long. The unemployment rate will increase to 44.6%. The biggest mystery is why the ANC and the DA would want to continue on such a dangerous path that guarantees electoral disasters during the next local and national polls in 2026 and 2029.
For the ANC there is a clear correlation between its electoral humiliation in 2024 and the collapse of the economy. In 2009, after five years during which there was an annual GDP growth rate of 4.5% and 3.1-million jobs were created, the ANC got 65.9% of the vote. From 2009-23 the trend GDP growth rate collapsed to 1.2% and the number of unemployed people increased by 6-million.
There were six years of economy-destroying load-shedding from 2018-23 and two electoral disasters for the ANC in 2019 and 2024, with Ramaphosa as the party’s president responsible for its 26 percentage point electoral loss in 2009-24.
If the ANC’s starting point after the 2024 elections had been to grow the economy, create jobs and reverse its electoral decline, it would not have had to enter into a coalition with the DA, which has simply supported its failed economic policies.
• Gqubule is an adviser on economic development and transformation.
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