Latest news with #statecapture
Bloomberg
4 days ago
- Business
- Bloomberg
Investec Says Sluggish Growth Has Cost South Africa $251 Billion
South Africa's economy is 37% smaller than it would have been had the country tracked its emerging-market peers and sustained annual growth of 4.5% since 2010, a report by Investec Wealth & Investment International said. It calculated that matching those expansion rates would have lifted the country's nominal gross domestic product to almost 12 trillion rand ($670 billion) last year, from 7.5 billion rand. The slow growth partly coincided with an era of endemic government corruption — known in South Africa as state capture — under former President Jacob Zuma, which his successor Cyril Ramaphosa estimates cost the economy at least 500 billion rand.
News24
25-05-2025
- Business
- News24
Editorial: Third time lucky for Godongwana, let's hope for lessons learned
Budget 3.0, presented this week by Finance Minister Enoch Godongwana, finally passed parliamentary muster. Third time lucky. There were no comebacks or jabs thrown. The budget itself was lacklustre; no surprises, expansion of the social security net, withdrawal of expanded zero-rated foods, no VAT hikes, although there was a hike of the fuel levy. It looks like government will learn to live with the shortfall in spending but will make every effort to make it up. What did stand out, was government's sudden commitment to rooting out corruption, duplicated projects, non-performing projects and, incredibly, ghost workers, all of which gobble up billions of rands. None of this was mentioned before, so assuming the cash was available through the proposed VAT hike, would these cash-consuming projects and ghost workers not have received the attention that they desperately need? Daily, we hear about wasted resources, over-spending, corruption, and fruitless and wasteful expenditure. Never do we hear about arrests, jailing and punishment for those faithful cadres who commit these crimes. Although, Godongwana was at pains to explain that the SIU and its asset forfeiture unit had recovered billions from the era of state capture. That's good news. Hearing him deliver his speech, however, there was none of the rapturous clapping and applause and back-slapping that usually accompany a budget speech. Now that everyone can get down to the work of implementing the budget, some reflection would do well. From the first delivery back in February, when Godongwana made some bold, and undiscussed moves, which took even the Reserve Bank governor by surprise. To the hot mic moment with Kumbudzo Ntshaveni complaining to Godongwana about the presence and requests by the Sars commissioner Edward Kieswetter. The grandstanding and expectation brought about by being in power for so long without pushback caught the minister off guard. His 2% VAT firmly rejected, he was sent, hat in hand, back to the drawing board. The government of national unity would have none of it. The ANC no longer rules by majority, but by consensus. These were expensive lessons to learn, from the rand being roiled the market taking a beating. Budget 2.0, which also included phased in hikes oF the VAT rate were similarly dismissed by the government of national unity. This is not politics as usual, but a new era of democracy where consensus is the yardstick. There are deep lessons to be learned, especially with the construction of the Medium-Term Budget Policy Statement (MTPBS) that will have to be delivered in October. The process cannot be characterised by the same chaos that led the country down the budgetary rabbit hole. The stakes are too high. The government needs to present a stable, united front, particularly in a world becoming increasingly polarised and protectionist. Growing the economy must be the primary objective of government, so must reducing the unemployment rate (particularly youth unemployment) and expanding quality healthcare and it can do this by inspiring confidence in investors through its economic policy. The government can't create the jobs, but they can definitely ensure that the space is there for those who see our shores as attractive and untapped investment destinations. The danger with looming local government elections next year, is the propensity to play to the populist tune. This will not suffice, nor will it inspire any faith. Let's hope the finance minister and National Treasury have taken these difficult lessons seriously and step away from politicking and brinkmanship for the sake of the entire country.
