Arriving in South Africa recently, I reflected on a more optimistic time in the dim and distant past. Following Nelson Mandela’s historic election, South Africans were hopeful of a brighter future.
Today, however, the mood is far more pessimistic, and the period in between has seen pedestrian GDP growth, stagnant GDP per capita, consistently high unemployment, rising inequality, poverty, persistent corruption, and more recently, a load shedding crisis.
South Africa now faces a general election on 29th May which could well shape its long-term future, and this seemed like an opportune time to visit the country. In my piece, I address some key questions:
Why has economic performance been so poor in recent decades?
Is there any hope that this poor performance could be reversed with a new pro-reform/rule of law leadership that represents South Africa’s silent majority?
Should we expect more of the same from the incumbent ANC party?
How meaningful and likely are the tail risks?
One silver lining that has consistently been the case in South Africa is the very strong private sector. I have always been very impressed with the quality of management teams in the country, and many companies have been able to handle the challenging political and economic environment. Indeed, the private sector frequently steps in to provide services where the government fails.
In the full piece, I also talk about my meeting with Discovery, a company which has helped in areas such as providing vaccines during the pandemic, fixing potholes in Johannesburg, and funding and delivering healthcare.
