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State of the Nation 2016

As South Africa faces dual political and economic crises, there is a growing sense of frustration and despondency among its citizenry, as is the perception that the country is at a turning point in its democracy. South Africans have been overwhelmed by news of corruption, political interference and threats of credit rating downgrades and further economic instability. Hilary Joffe, Editor-at-Large at Business Day told a recent forum gathering at the Gordon Institute of Business Science (GIBSS) that South Africa is at a critical juncture: " We must decide whether this a democracy run for a few narrow interest groups; or for the inclusive growth and benefit of the people."

Economy and growth

With the looming threat of a sovereign credit rating downgrade to sub-investment grade, and an anemic economic growth rate of less that 1%, the South African economy is under extreme pressure. Reviving confidence in the economy by presenting a cohesive message as business, government and labour is of the utmost importance. 

Rashad Cassim, head of economic research and statistics at the South African Reserve Bank said the current low growth rates are "unacceptable." While the global economy is in a cyclical downturn, it is necessary to also address the structural issues at a local level. Cassim said the South African economy "has proven to be incapable of growing more than 2,5% in the long term, since the dawn of democracy. We can't bring unemployment down with growth of less than 3%."

​Joffe called the country's flat economic growth "a profound failure." 

"There are real consequences for people's lives if we don't grow - as a society we are getting poorer." The constant mixed messages and ambivalence about growth and investment coming from government all point to a lack of political will to address South Africa's deep economic woes, Joffe said.

​In order to encourage growth, labour intensive industries that allow for inclusive growth must be identified, Cassim said. "We have masses of unskilled labour and the only place that can absorb it is the informal sector." 

South Africa is still stuck on the idea of industrialisation, whereas what the economy needs is for the agriculture and services sectors to grow, Joffe added. "We have to stop obsessing about big projects and manufacturing, and stop being stuck in the past by what we narrowly define as a job."

Political and leadership crisis

Political analyst Prince Mashele told the forum he believes South Africa's Constitution is fundamentally flawed as it allows for the concentration of power in the hands of one man: "How do we tame the power of presidents and political parties? If the current dispensation doesn't face the real possibility of losing an election, they will continue messing up our country."

Under the leadership of President Mandela and President Mbeki South Africa "had a sense of direction," Mashele said.

Political analyst Ralph Mathekga, said he believed the potential for the settling in of a new political narrative was very real, but called for patience and reason:  "The nation is so frustrated. But we cannot reduce the problem to one person. We must see the crisis through so that the right course of action is taken."

Encouraging an active citizenry and nation building

"Political parties and politicians have failed us. It is time for ordinary people to act and to hold those in power accountable," Mashele said.

Professor Raymond Suttner, political analyst and scholar told the forum: "Under apartheid, the law was illegitimate and indefensible. Now, we have a duty to promote legality. The current dispensation is undermining a constitution that empowers people." Suttner said now was the time for active citizenry, and that in the face of what many consider the lack of viable political opposition, there were other ways for democracy to find expression outside of voting. Citizens can show their own power through faith-based organisations, as business people, or as students.

Suttner said it was important to build links between sectors of society and promote the sharing of a unifying position. It was in South Africa's best interest to create commonalities between people and to have an understanding of the critical areas facing the country, such as corruption and youth unemployment. "Both rich and poor have an interest in clean government," he said. 

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