Aortic hemorrhage of economy has already happened: Weak president, skills exodus, growing population

2019-06-07 13:08

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A majority of economists have signaled a looming catastrophe rather than a current collapse of South Africa’s economy. In fact, the turning point is likely to have already been breached signaling a minimum of a ten year drought.  All the variables have been well debated by our leading economists but perhaps stressing a few key variables makes more sense to the man in the street.

Firstly, the level of current unemployed is growing because of an employment squeeze. On the one hand, the economy is contracting and on the other, South Africa is confronted with rapid population growth that will increase not reduce poverty. Secondly, the current education system is unable to translate the growing population into employable individuals in a new technology era and simultaneously, imported skills have been stifled by bureaucratic bottlenecks. Further exacerbating the problem is an exodus of young employable skilled individuals who are leaving South Africa.

Given the current post election reality of a toothless president, a rise in populism, open warfare in the ANC, a labour force from hell, how does South Africa possibly think that investors would find South Africa an attractive investment destination? Why are we surprised that our domestic firms are reluctant to invest in the local economy. Within weeks, the investment scenario is likely to be further compromised by ratings downgrades. Given these factors, therefore, forecast growth in the economy can never close the growing unemployment gap caused by a rapidly growing, poorly educated population.

Will Cyril Ramaphosa stand up and be counted? It's war and he needs to change his hand wringing strategy. His power and influence is at a peak. There should be no holy cows from population control to getting rid of his toxic opposition in the ANC.

Professor Kurt Sartorius

Universities of Wits/UKZN

Johannesburg-Durban

 

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