After eight wasted years as president of South Africa Cyril Ramaphosa doubled down on the government’s failed macroeconomic policies in his opening address to the ANC national executive committee lekgotla at the weekend.
These policies have produced a dismal annual average GDP growth rate of 0.6% in 2018-24, which makes this by far the worst presidency since 1994. Yet Ramaphosa’s message was that South Africa is on the right path and that there are “clear improvements” in the economy; that we must keep implementing the failed policies and growth and jobs will miraculously appear through incantations by politicians.
The president said members of his economic advisory council, which include Nobel laureates, had told him: “South Africa’s most persistent constraint is not a lack of vision, but a gap between policy ambition and implementation.” This is not true, since there is no economic policy document that provides a vision and plan to tackle the jobs crisis and put the country on a path towards achieving full employment.
NDP targets abandoned
The National Development Plan (NDP) of 2012 had targets to achieve an annual average GDP growth rate of 5.4% and an unemployment rate of 6% by 2030. Yet the government has officially dumped the NDP targets. The medium-term development plan (MTDP) targets a GDP growth rate of 3% and an unemployment rate of 28% by 2029.
The modelling is idiotic, because a growth rate of 3% by 2029 will result in an increase in the unemployment rate. Like the NDP, the MTDP is a vision without a plan. The Treasury and the Reserve Bank blue-ticked the NDP’s targets and will do the same with the MTDP.
With a 2.5% primary budget surplus target and a 3% inflation target, everything Ramaphosa said about creating jobs will be irrelevant. The two most important institutions in the economy do not care about jobs.
Recycled policies ignore reality
The improvements Ramaphosa was talking about relate to the fake economy of financial markets and have little to do with the lived experience of ordinary people or the real economy of bricks-and-mortar investment, food on the table and jobs.
He said the JSE had grown 30%, but almost 80% of the assets of listed companies have nothing to do with the economy. BHP does not own a single South African mine but its market capitalisation accounts for about 11% of the JSE’s total.
The JSE’s market capitalisation means nothing for the 12.5-million unemployed people or the 40.8-million people — two-thirds of the population — who lived below the upper bound poverty line in 2023.
Ramaphosa said the rand had appreciated 12.6% during 2025, but that has got nothing to do with what the “government of neoliberal unity” has done, or with improved confidence in our chronically stagnant economy. It is the inverse of the dollar’s depreciation against the euro because of US President Donald Trump’s demented policies.
Ramaphosa said government bond yields had declined by 200 basis points, but that is what usually happens when the inflation rate declines. He said the fundamentals have improved and that the economy has stabilised. But how can he say that when 46.4% of Africans do not work and the unemployment rate has not stabilised?
We need to achieve a GDP growth rate of more than 4% to stabilise the unemployment rate and create jobs for the new entrants into the labour market, let alone the 12.5-million people who do not have jobs.
• Gqubule is an adviser on economic development and transformation.
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