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IOL News
5 days ago
- Business
- IOL News
South Africa's economy faces an uphill battle as growth stagnates
South Africa's economic growth has plummeted to just 0.1% in the first quarter of 2025, following a revised 0.4% gain in late 2024, raising concerns about the country's economic future amid revised forecasts from the South African Reserve Bank Image: Leon Muller Independent Newspapers South Africa's economy remains under significant strain, with gross domestic product (GDP) growth lagging behind population increases over the past decade. According to the OECD Economic Survey: South Africa 2025, economic output grew by a mere 0.7% annually in the past ten years. This slow pace resulted in stagnating or declining GDP per capita, further deepening the country's entrenched unemployment and inequality. The OECD warned that 'economic growth has averaged only 0.7% per year over the past decade, below that of the population,' a key factor in the country's deteriorating living standards. Public debt, which stood at 31.5% of GDP in 2010, is projected to balloon to 77% by 2025, increasing debt servicing costs and limiting fiscal space for much-needed public investment. Electricity and infrastructure bottlenecks: dragging growth down One of the central themes in the OECD's report is the impact of structural constraints on productivity. 'Persistent insufficient access to electricity, and rail and port bottlenecks have weighed on activity, investment, exports and living standards over recent years,' the report noted. In 2023 alone, electricity shortages shaved 1.5 percentage points off GDP growth. Though 2024 has seen improvements in power availability due to reforms and increased independent renewable energy generation, supply remains unreliable. The OECD stressed the urgent need to 'accelerate renewable electricity generation, expand the transmission grid, and redefine the role of municipalities and Eskom in electricity distribution'. Reform momentum is building - but not fast enough While the government's Operation Vulindlela programme has shown promising results, with 74% of Phase 1 reforms completed or on track, the report made it clear that the pace and scope of reforms need to intensify. The next phase aims to address local government inefficiencies, spatial inequality, and digital transformation. Lilas Demmou and Nikki Kergozou, the lead authors of the report, said, 'It is vital to maintain the momentum of ongoing reforms to unlock South Africa's economic potential and promote inclusive growth.' The authors added that a reliable electricity sector, more competitive markets, and increased private investment are critical for sustained growth. Fiscal policy: walking a tightrope South Africa's fiscal picture remains precarious. The 2025 fiscal deficit is forecasted at 6.6% of GDP. Elevated debt servicing costs, projected at 5.2% of GDP are limiting the government's ability to fund much-needed social spending and public investment, the OECD report stated. To reverse this trend, the OECD called for 'a continued consolidation strategy' through stricter spending controls, enhanced tax compliance, and reforms to state-owned enterprises (SOEs). The report suggested expanding the tax base by reducing personal income tax expenditures, raising VAT, and improving municipal property tax collection. The authors argued for protecting infrastructure and social spending while prioritising fiscal discipline. 'Boost public investment, especially in core infrastructure such as electricity, water, and rail,' was one of the central recommendations. Employment crisis: a key drag on growth South Africa's labour market performance is among the worst globally. The employment rate stands at just 37.4%, while the unemployment rate, particularly among the youth, remains alarmingly high. The OECD noted that 'the unemployment rates for young people, at 60%, and for women, at 34%, are notably higher than for the total population'. The report outlined a multi-pronged strategy to boost employment: easing regulatory burdens on small businesses, simplifying licensing, and expanding vocational education. Urban planning reforms are also essential, as long and costly commutes exclude many from job opportunities. 'Promoting densification and reducing transport times and costs is vital to connect South Africans with jobs, calling for housing near public transport and development corridors, promoting rental housing near city centres and reforming restrictive building regulations," the report revealed. Inflation target and monetary policy On the monetary side, inflation has moderated, allowing the South African Reserve Bank (Sarb) to ease interest rates in late 2024. However, the report suggested reconsidering the inflation targeting framework. South Africa's current 3–6% band is broader and higher than those of its peers. The OECD recommended narrowing the band to better anchor inflation expectations and enhance international competitiveness. 'Reducing the inflation target and its band could more closely align inflation with that of trading partners,' the OECD proposes, adding that such a change must be 'carefully timed, coordinated across government, and clearly communicated'. Path Forward: Growth with Inclusion To raise the country's potential growth rate beyond the current 1.2%, the OECD outlines a bold yet actionable roadmap: Accelerate infrastructure investment , especially in electricity, water, and logistics. Widen the tax base to ensure fiscal sustainability. Reform labour markets to boost job creation and formal employment. Target inflation more precisely to support competitiveness. Combat corruption and enhance SOE performance to rebuild public trust and attract investment. Demmou and Kergozou said, 'Strengthening competition, reducing corruption, and boosting private-sector investment are key to enhancing economic dynamism, reducing unemployment and alleviating poverty'.
IOL News
27-05-2025
- Politics
- IOL News
Court admits Helen Suzman Foundation as amicus curiae in apartheid litigation
The Helen Suzman Foundation (HSF) has been admitted as amicus curiae into litigation concerning the government's failure to prosecute apartheid-era crimes referred to by the Truth and Reconciliation Commission (TRC). Image: Leon Muller / Independent Newspapers Archives The Helen Suzman Foundation (HSF) has been allowed to join the ongoing litigation regarding the government's failure to prosecute apartheid-era crimes as a friend of the court. This was after the Gauteng High Court, Pretoria, admitted the foundation as 'amicus curiae' in the case that was brought by families of the victims who were killed and disappeared during the apartheid years. The families filed the court application earlier this year, seeking constitutional damages for political interference and suppression of the cases from the Truth and Reconciliation Commission (TRC). The families want the government to pay R165 million for constitutional damage and for President Cyril Ramaphosa to establish a commission of inquiry into political interference, which halted the investigations and prosecutions of the perpetrators. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The litigation is also supported by the Foundation for Human Rights as co-applicants. The TRC was set up in 1996. Its mission was to expose and record apartheid-era crimes and allow some of those responsible to confess their role, including members of the apartheid government's state security forces who were implicated in many killings. Some were granted amnesty from prosecution, but thousands were denied it, and others did not come forward. The commission released the first five volumes of its final report in October 1998, and the remaining two volumes were released in March 2003. The cases were referred to the National Prosecuting Authority (NPA) for further investigation and prosecution. However, to date, only a handful of cases have been followed up. HSF, said, as amicus curiae, will make submissions highlighting the right to truth, a right borne not only by the families of the victims, but by the South African public at large. In its application filed in March, the foundation highlighted it would present its argument and offer information on the matter. The foundation said it would also highlight the importance of completing the work of the TRC and demonstrate that it is necessary to give effect, 'inter alia', to the public's right to the truth and the realisation of constitutional ideals around reconciliation and the recognition of the injustices of the past. The foundation said it believes this would be achieved through the investigation and prosecution of those accused of apartheid-era crimes, as well as the establishment of a commission of inquiry into the failure of the government to investigate and prosecute these crimes. 'HSF also emphasises the duty incumbent upon domestic courts to ensure the prosecution of crimes against humanity, including apartheid,' read the statement. Meanwhile, Ramaphosa, who withdrew opposition to the litigation in February, in April announced he was in the process of establishing a Judicial Commission of Inquiry to establish whether attempts were made to prevent the investigation or prosecution of the crimes referred by TRC to the NPA. The establishment of the commission is the outcome of settlement discussions in a court application.
IOL News
12-05-2025
- Politics
- IOL News
The departure of Afrikaner refugees: A reflection of fear and privilege in post-apartheid South Africa
Afrikaner refugees spark debate in South Africa over racial identity and privilege. Image: Leon Muller Independent Newspapers The departure of 49 Afrikaner refugees to the US has sparked vigorous debate within South Africa, with political analysts suggesting that the move reflects deep-seated fears rooted in racial identity and a perceived loss of privilege since the end of apartheid. Yesterday, a group of 49 Afrikaner refugees departed South Africa for the United States amidst rising political tensions and controversial statements from former US President Donald Trump, who recently accused the South African government of committing genocide against white minorities. However, this claim has been widely unsubstantiated and met with skepticism by experts and local leaders. Experts Cite Fears of Retaliation and 'White Victimhood' Independent political analyst and senior lecturer at the University of Limpopo, Dr Metji Makgoba, commented on the issue, suggesting that many of the Afrikaners leaving South Africa are suffering from a sense of 'white victimhood.' 'Many parts of the world are democratic, and if people feel unhappy with their circumstances, they are free to move elsewhere,' Makgoba said. Since 1994, the South African government has pursued a path of reconciliation. There has been no targeted genocide against white people, nor have there been policies aimed at eradicating or oppressing them based on race.' He added that these fears are often rooted in anxiety and perceived threats rather than reality. 'What we are dealing with here is a culture of white supremacy and fear of retribution,' Makgoba explained. 'Some Afrikaners feel that one day they might face retribution, even though no evidence supports this. They are acting out of fear, not fact.' The Broader Context: Crime and Economic Challenges Makgoba also emphasised that the narrative of victimisation overlooks the broader social and economic context. South Africa faces significant challenges related to crime, inequality, and economic disparity—issues that affect all citizens, regardless of race. 'The crime rate is high, and everyone is impacted—black, white, and others,' he stated. 'Many have improved their security, such as installing gates or hiring private security. But these issues are not exclusive to white communities, nor do they justify fleeing the country.' Historical and Social Dynamics Since the end of apartheid, South Africa has undergone a complex transformation, while progress has been made, economic inequality and racial tensions persist. Some white South Africans, feeling marginalised or fearful of losing their privileges, have chosen to seek safety elsewhere, often citing security concerns as their primary motivation. Makgoba emphasised that the political landscape has shifted toward greater inclusion. 'The government's reconciliation efforts have been genuine, and most South Africans seek peace and stability,' he said. 'The departure of these Afrikaners reflects more individual fears and perceptions than systemic persecution.' Skepticism Over the Refugee Claim Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Political analyst Sandile Swana expressed skepticism about the refugees' claims, asserting that there is no evidence of genocide or targeted threats against white Afrikaners in South Africa. Swana pointed out that for someone to qualify as a refugee or asylum seeker, that they cannot remain in their country of origin. 'In regions like Eritrea, the DRC, and Sudan, refugees flee well-documented dangers and persecution, however, in South Africa, there are no documented threats targeting white Afrikaners or individuals based on their political or religious beliefs." South Africa's Response The Department of International Relations and Cooperation has also responded to the US's stance on granting asylum to these individuals, criticising the use of the term 'refugee' as politically motivated and an attempt to undermine South Africa's sovereignty. Spokesperson Chrispin Phiri stated, 'Even if there are allegations of discrimination, these do not meet the threshold of persecution required under domestic and international refugee law.' IOL Politics
