SA economy no longer stable - Fragile States Index

Cape Town – South Africa’s economy has caused it to decline significantly on the 2017 Fragile States Index and the country is no longer regarded as stable. 

The Fragile States Index is an annual ranking of 178 countries based on 12 social, economic and political indicators that measures their susceptibility to instability. A reduced country score indicates relative stability, while a higher score indicates instability. 

South Sudan is in the first position as the world’s most fragile state, while Finland at 178 is the least. 

On the latest index, South Africa has scored 72.3 from a score of 57.4 in 2007. Ten years ago, South Africa was ranked 132nd, falling into the stable category, but has since rocketed to position 96 and now falls in the elevated warning-category. 

According to the index report, South Africa’s declining trend is “particularly alarming”. 

“As the economic engine – and in many respects the political giant – of Africa, South Africa has been surpassed by both Ghana and Botswana which are now the most stable countries on the continent.” 

South Africa has experienced increasing economic pressure, the index said, which has been a major driver of strikes, protests, and political instability. 

The economic decline factor specifically has worsened from a score of 2.8 in 2007 to 7.1 in 2017. 

READ: Why Time put SA on risk list of shame 

“What should worry South Africa the most is that the indicators group grievance (including the prevalence of divisions between different groups, citings of injustices of the past, nationalist political speech), state legitimacy (including confidence in state institutions and processes) and security apparatus (including serious criminal factors such as organised crime) have recently spiked, along with a worsening of the factionalised elites-indicator,” according to the report. 

The factionalised elites-indicator considers the fragmentation of state institutions along ethnic, class or racial lines and also factors in the use of nationalistic political rhetoric by ruling elites. 

“[The deterioration] suggests that both the country’s leadership as well as the population as a whole are dangerously fragmenting, and rapidly so,” according to the report. 

South Africa’s economy is technically the largest on the continent and the country has abundant resources, yet growth is sluggish and unemployment is not abating. In addition, stark economic disparities persist between white and black South Africans as the wealth and opportunity gap of uneven economic development has widened for the poorest. 

READ: How to attain true economic freedom 

The report said South Africa was once regarded as the hope of the continent and its decline over the  past decade should cause alarm to South Africa itself as well as the region. 

“For Africa to continue to develop, it will rely on regional economic powerhouses, such as South Africa.” 

Unless the country starts addressing the stagnating economy and inequality, and politicians address the real problems rather than bickering and scapegoating, the “prognosis” will remain “worrisome”, according to the report. 

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