Unemployment Rates soar, GDP Per Capita falls, Infrastructure Collapses and Critical Industries shrink under Ramaphosa’s leadership
South Africa has been grappling with a deteriorating economy and rampant corruption for years, and when Cyril Ramaphosa assumed office as president in February 2018, hopes were high for a fresh start. However, a closer look at the numbers tells a different story – one of missed opportunities and a lack of decisive action.
Unemployment rates, the backbone of any nation’s economic health, have seen a steady increase under Ramaphosa’s presidency. The latest data from Statistics South Africa reveals that the official unemployment rate now stands at a staggering 31.9%, up from 26.7% when Ramaphosa took office. This represents a significant five percentage point increase. Moreover, when including those who have given up seeking employment, the real unemployment rate has ballooned to 41.2%, a rise from 36.3%.
South Africa cannot afford another term under Ramaphosa’s leadership
Gross domestic product (GDP) per capita, a measure of average income and living standards, has also taken a hit. According to IMF data, GDP per capita has fallen from $6,680 in 2017 to $6,190 in 2023. This means that on average, South Africans are getting poorer. GDP per capita reached its peak of about $8,800 in 2011 before the economy was ravaged by the previous administration.
Critical industries such as mining and manufacturing, which could have been engines of growth and job creation, have shrunk under Ramaphosa’s leadership. Output in both sectors is lower now than when he assumed office, further exacerbating the unemployment crisis.
The state of South Africa’s once-impressive rail network is another concerning area. In 2017, the country recorded an average of 27 million passenger rail journeys per month. However, as of November 2023, that number has plummeted to a meagre 5 million. Although the impact of Covid-19 lockdowns cannot be ignored, it occurred under Ramaphosa’s watch. Similarly, freight rail, a crucial element for industries such as mining, manufacturing, and agriculture, has seen a decline as well. Currently, the network moves only 13 million tonnes of goods per month, down from an average of 19 million before Ramaphosa’s presidency.
South Africa’s never-ending electricity crisis has also dealt a severe blow to the economy. The volume of electricity distributed in November 2023, according to StatsSA, was approximately 11% lower than in the corresponding month in 2017. With an expanding population, the electricity shortage has become a significant hindrance to any potential economic growth. The most recent plans for the electricity sector that have been developed by the Department of Mineral Resources and Energy indicate that rolling blackouts will continue until at least 2028, which will further make progress more difficult to achieve. This setback is aggravated by the department’s scaling back on renewable energy projects, such as wind and solar power, which could have offered quicker solutions.
However, though, the fact remains that the closure of reliable coal power stations like Komati could have easily avoided any sort of blackout taking place in the first place.
Regrettably, South Africa’s investment landscape has not improved either. As a percentage of GDP, total investment has decreased from 16.6% in 2017 to 15.4% in 2022, according to IMF data. This decline in investment hampers the building of a foundation for future economic expansion, suggesting a lack of long-term vision.
Amid these challenges, public finances continue to deteriorate. Gross debt has surged from 48.5% of GDP in the 2017/18 financial year to 70.9% in recent calculations, projected to reach 77.7% in the coming years. The interest burden on this debt inhibits the state’s ability to invest in crucial sectors such as infrastructure and education, further compounding the country’s economic woes.
To acknowledge any silver linings, Ramaphosa has made some headway in fixing the South African Revenue Service and has forced breakthroughs in allowing private investment in power projects, leading to a reduction in load shedding. However, considering the broader context, it is evident that South Africa cannot afford another term under Ramaphosa’s leadership. The damaging impact he has had on the country’s economy necessitates an urgent need for a new approach and a fresh path. He needs to go, the damage Ramaphosa has done is too much.
