And don’t take our word for it, listen to the experts. BusinessTeck quotes economist Magnus Heystek who says Zuma’s term brought destruction and carnage to South Africa’s economy, with almost all financial metrics in the country under Zuma’s ANC having experienced a dramatic decline.
“The list is almost endless,” says Heystek, but here are a few he highlight that new president Cyril Ramaphosa will need to turn around, if they are not irreversible already. “It will take a stupendous effort by government and private sector to reverse the damage to the vital organs of SA Inc”.
These are some of the “vital signs” that took it on the chin under Zuma’s carnage:
- SA’s average growth rate since 2009 has barely exceeded 1.5% per annum to end 2017.
- The unemployment rate increased from 22.5% for 2008 to 27.5% for 2017.
- Total Public Debt as a percentage of nominal GDP ballooned from a low point of 26.5% in 2008 to exactly double that (53%) towards the end of 2017.
- SA’s total debt is now close to R3 trillion, depending on the rand/dollar exchange rate. If the contingent liabilities of the State are included, the number rises to about 60%.
- Revenue collections are under considerable pressure. In December 2018 company income taxes were 6,6% lower than a year ago. Expect a grim 2019 Budget with an estimated budget deficit closer to 4.5% than 4%.
- Electricity prices ballooned 350% from 2008 to 2017.
- Per capita GDP declined from 8,066 USD per annum in 2011 to 6,268 USD per annum in 2017.
- Net SA FDI (Foreign Direct Investment) as percentage of GDP in 2010= +22.7%. In 2017 it was a minus 29%.
- Government wages as percent of GDP in 2007=10.5%. In 2018 it was 13.9%.
- Personal income taxes (as percentage of GDP): 2007=7.35%. In 2018 it was 9.81%.
- SA was the only OECD country in a recession during 2018.
- The SA economy is currently in its lowest growth trajectory since 1945.
- S&P Global Ratings and Fitch has reduced SA’s credit rating to below investment grade. Junk status, in other words.
- Residential property market has been in a 10 year bear market. Prices have declined by 22% in real terms over this time. In the 3rd quarter of 2018 new mortgage applications dropped by 16% – and not a single word about this reported in our mainstream media.
- Average retirement funds have now not beaten inflation over 1, 3 and 5 years—soon 7 years.
- Annual average returns on the Johannesburg Stock Exchange have been last or second to last when compared to the S&P 500, MSCI World Index, MSCI Japan and MSCI Europe. Against is peer group –the MSCI Emerging Market—it has been lagging by almost 2% per annum since December 2015 (when Zuma fired finance minister Nhlanhla Nene).
- Since then more than R400 billion has left our equity and bond markets.
- Poverty is increasingly visible on every street-corner, in declining car and retail sales, in empty rugby and soccer stadiums, in dwindling golf and bowling memberships.
