13 February, 2018
Cyril brings hope - and economic growth
Africa looks set for an economic upswing, as
a far more competent leader than President
Jacob Zuma is now controlling our economy.
are looking at the very real prospect of an
11-year Cyril Ramaphosa presidency, which
"must be good news" for business and
is the gist of a Dolphin Bay Brief interview
with independent analyst JP Landman. Bertus
attended a presentation by JP in early
December and found it so interesting that he
asked JP to give our customers his views on
the major tipping points South Africa has
been facing in recent years, and the extent
to which these have shifted in the past two
first tipping point is the possibility of
population growth outstripping economic
growth over a sustained period, JP said.
"For society to progress, people need to get
richer. Per capita income must increase. We
must generate more resources and distribute
them more fairly.
growth must outstrip population growth. If
it is any lower, we go backwards."
1946 and 2016, economic growth exceeded
population growth by about 1.2% per year,
which provided the money for building more
roads, schools, and hospitals, among other
growth in South Africa, including
immigration, is now at 1.6% and economists
are predicting economic growth of 1.2% in
2018. This year would be the fifth
consecutive year where population growth
outstrips economic growth. However, an
upswing has already started: last year,
economic growth was 0.9% and in 2016, 0.3%.
guaranteed? Of course not. However,
South Africa had its ‘Trump moment' when
Zuma was elected. The evidence is that
we are now moving in the opposite
Even if Zuma was to
serve out his full term as president and
Ramaphosa only assumed office next year, the
prospects for South Africa's economy are
much brighter than they were last year, JP
at Eskom and the charges against those
behind the Vrede Dairy Farm scandal are just
some of the many positive developments that
are starting to encourage economic growth
and more improvements are likely to follow.
of the golden rules for ensuring economic
and political success is having a
3C government - one that is committed to
growth, capable of delivering it, and
is credible on economic growth - and we are
on the cusp of getting it," JP said.
second tipping point would be
the strengthening of an open society, one in
which voters can replace the government and
there is rule of law; a free and pluralistic
media; laws against corruption and, among
other things, independent agencies of
restraint, such as the Reserve Bank and
open society ensures there is "fierce
contestation at all levels, so that
everybody gets something, rather than giving
just a few people all they want."
would not be ANC president if it were not
for the forces of an open society," JP said.
"The majority of people were outraged by
what has been happening in government.
Ironically, Zuma's presidency has caused
society to open up even further - the ANC
saw it would lose electoral support if it
for me, this tipping point, too, is falling
in the right direction. We are making really
improvements guaranteed? "Of course not," he
said. "There can be a backlash, as happened
with the election of Donald Trump as US
President, and the UK's Brexit vote.
However, South Africa has had its ‘Trump
moment' when Zuma was elected. The evidence
is that we are now moving in the opposite
direction," JP observed.
2017 study by Ipsos Mori for the World
Economic Forum, called "Perils of
Perception", found that South Africans were
more pessimistic about their own country
than every one of the other 37 populations
surveyed. Brazil was second on the list.
study investigated the gap between
perception and reality in 38 countries
surveyed. Among its findings were that over
80% of the South Africans surveyed thought
the murder rate was higher than that in the
year 2000, while in fact it was 29% lower,
and that respondents thought that 44% of
girls aged 15-19 give birth every year,
while the real figure was 4.4%. This "lens
of pessimism" is very real, as the study
shows, and it influences the way we think
intractable challenges South Africa faces,
including ensuring broad land ownership and
youth unemployment, could be addressed if we
have economic growth and an open society, JP
open society is getting much stronger, and
this genie is not going back in the bottle,"
he said. "It's an uncomfortable journey, but
one that is very good for modernity, which
is the endgame.
biggest threat is our own lens of
should now "do business, and invest, in
South Africa," he advised. "The private
sector is much bigger than the public
sector. If we want economic growth, we need
investment. I've always believed local
investment is the more important factor, and
foreigners will follow if they see that
locals have confidence in their economy."
Source: Dolphin Bay Chemicals