There is an increasingly high risk that South Africa will not by 2025 have recovered to its pre-lockdown levels of GDP. In a research report – Vaccines and re-opening: Covid-19 risks to the 2021 recovery – HSBC, one of the largest banks in the world, indicates that South Africa will not recover as quickly as most of the emerging markets.
HSBC places South Africa in a cluster of countries that will not by end 2022 regain their pre-Covid GDP levels. This list also includes France, Italy, Spain, the UK, Mexico and Argentina. According to HSBC’s estimates the rest of the Eurozone will have recovered by end 2022, with Germany reaching that target by the first quarter of 2022.
SARS commissioner Edward Kieswetter’s biggest headache is not the gaping R300 billion crater in tax income this financial year or the growing Everest of assessed losses for companies that will impact negatively on CIT for years to come. His biggest problem is how to convince taxpayers to sustain a government that under the pretext of “a better life for all” has served up a toxic mix of corruption, wastage, mismanagement and anti-growth policies.
In addition, the very same government has doggedly pursued a lockdown strategy not underpinned by much logic that could yield any outcome other than a severe economic disaster with long term humanitarian effects. These effects include shortened lifespans, poverty related deaths, and deaths from medical conditions the government deemed non-essential. The toll of this inept strategy will in all likelihood dwarf the real Covid 19 death toll.
Lockdown has mowed down millions of jobs and several hundred thousand businesses. Those that survived have been severely crippled: they have a radically reduced income, have run up losses or have achieved less than half their previous taxable income.
One recalls the words of Saint Augustine, bishop of Hippo Regius in North Africa, whose theology and philosophy influenced ancient as well as modern thought: “Without justice, what are kingdoms but great bands of robbers?”
The prolonged lock-down has been a roaring success: not in enabling the public health system with “sufficient beds, ventilators and staff” for the inevitable “Covid-peak”, but in empowering organised crime syndicates.
Not only did the ban on the transportation and sale of liquor and cigarettes provide an unprecedented window of opportunity for already existing smuggling networks to strengthen their production and supply chain networks, they were wholeheartedly supported by the government to expand their client base exponentially.
The government by decree stopped the legal trade in liquor and cigarettes, effectively providing a protected oligopoly for the smuggling networks. Since there was no competition, they hiked their prices. That saw:
cigarette cartons that would cost around R450 before lock-down selling at anything between R1 500 to R2 000;
Gordons Gin selling at four times the pre-lockdown price, and
A litre red Robertson box-wine fetching R1 400, easily beating some of the prices achieved by top wines at the Nederburg Auction.
Patel hounded Dischem, but the smugglers, spazas & tenderpreneurs were the price hikers
As grotesque neon-light signboards shout their messages out in the darkness of night, the ANC’s signature of their quarter century of rule has been rife in evidence in the first weeks of 2020. No, not the good life of liberty that the movement had promised, but the embrace and celebration of rampant incompetence.
Nowhere was that more obvious than:
in the jubilation about matriculation results;
when senior well-decorated police officers didn’t know their right from their left at the funeral of Richard Maponya;
in both the presentation of and applause for the platitudes in Pres. Ramaphosa’s ‘January 8 speech’.
Matric results: better outcome than Bantu education?
Cyril Ramaphosa’s commitment to revitalise the economy reminds one almost of president
Zuma’s commitment to combat corruption: spraying air freshener to divert
attention from a rotting carcass.
The person who promised in his New Dawn manifesto a growth rate of 3% in 2018 through “an unrelenting focus on economic growth” has delivered after 18 months a growth rate of 1.3% in 2018 and negative growth up to date for 2019. Some people would say low growth is still growth, however economic growth below the population growth rate impoverishes the population.
presides over an economy in worse shape than when he assumed power: one
Is South Africa’s ‘radical transformation‘ from a leader to a laggard in the upper middle-income countries the cause or the result of a brain drain? It is hard to tell. What is certain, is that there is an extremely strong inverse correlation.
In fact, it is so strong that one can use one statistic to deduce the other. And if high-skilled emigration is going to continue, the country’s decline towards the ranks of the lower middle-income countries will also continue.