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Growth versus capacity in the South African context

08 January 2013, 13:06

I've recently become interested, once again, about the causes of inequality in South Africa.

Is apartheid to blame, nearly 20 years on for the failures in SA today, like the ANC would have us believe? Or are there other, more logical reasons for the challenges facing South Africa today?

Yesterday, I commented about the theft of R250 million in public funds, and was corrected. Apparently, that figure is closer to R600 million.

The fact remains, however, that with so much government thievery, the building blocks of poverty eradication are being pilfered by the very people tasked with doing so.

Are there other, business based reasons for the trouble in SA today? I think so.

One of those is the problem with growth versus capacity. Any entrepreneurs out there will immediately understand what I am talking about. Sometimes, you simply grow too quickly, and you lack the capacity. Businesses can, and do, expand themselves into failure on occasion.

Does the same apply to a country?

If you google demographics of South Africa, you will probably find a few articles, census results and all sorts of other things. There are figures out there for all population groups, but since the issue, in this case, is usually black and white in the literal sense, let's look at only those two groups.

In 1960, during the height of apartheid, there were nearly 11 million black South Africans, compared to just over 3 million white South Africans.

In 2004, black South Africans numbered 35 million, and white South Africans a little over 4 million.

That means, based on simple, logical maths, that while the white population had increased by 25% over 44 years, the black population had increased by 350%.

With limited resources and an economy that was already growing slower than it should have been because of apartheid, did black South Africans population simply grow too fast for the capacity of the country?

Have black South Africans bred themselves into poverty?

When you compare a growth of 1 million over 44 years to a growth of 25 million over the same period, is it not fair to assume that had the increase in demographics not been unequal, there would be less potential for inequality today?

Let's look at it another way though.

Let's suppose that the white and black populations had both grown at a rate of 25% between 1960 and 2004.

That would have meant that instead of 35 million black South Africans today, there would have been 12.5 million. 22.5 million less than there are today.

One has to wonder whether that may have had some impact on the situation we have today. Would having 22.5 million less people have made a difference? Would slower growth have allowed capacity to keep up? Could South Africa have coped better post 1994 with nearly half as many people?

Would it be easier to educate, uplift and employ 22.5 million less previously disadvantaged South Africans?

I think so.

Maybe it's time we started thinking about our country as a business, instead of as the ANC's playground. Maybe it's time we start applying principles like keeping growth within the bounds of capacity.

Then again, have another child grant. Have the dole. The more the merrier. You can always blame apartheid, after all.

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