SOUTH AFRICA
What is the state of our nation?
SARMA - 18 June 2012
We have come a long way since
1994…
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Miracle transition to democracy
Black snr managers up from 4% - 26%
Percentage of people below $2 a day: down
from 12.1% - 5%
Highest tax bracket: down from 43% - 40%
Murders per day: down from 71- 44
Deaths per 1000 below 5 y down from 62-49
Consumer inflation: Down from 9.2% – 5%
Or not?
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Unemployment up from 31.5 – 35.4% (4.2m
people)
Black income as percentage of white income
down from 21.5 – 20.4%
Registered security guards up with 256%
(from 115 331 – 411 109)
Percentage people with HIV up from 1.5% 17% of population
Number of farms down from 60 901 – 39 966
On balance?
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Is South Africa moving in the right direction?
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1994 = 43%
 2011 = 55.3%
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Answer depends on individual or collective
vantage point (perception is stronger than fact)
Weakness 1: Incapable state
“Our development strategy requires a capable
state and active citizens” (8)
 “A capable state focussed on service delivery
requires a passionate… public service” (13)
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Only 68% spent of infrastructure budget in
2011 (R178bn - R260bn; local government!)
 Examples of mining and agriculture (5) “The
time has come to confront uncertainty” (31)
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Report to Parliament last week….
Budget spend over 95% but delivery
targets below 40%
 Fruitless expenditure = R3.7bn
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UN Human Development Index
HDI South Africa
1980 = 0.659
 1990 = 0.698
 1994 = 0.644
 2005 = 0.678
 2007 = 0.683
 (2011= 0.619)
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Weakness 2: Culture of corruption
New procurement rules
 New chief procurement officer
 Officials with unspent budgets to held
liable
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Counter-evidence in both public and
private sectors is quite strong
Corruption Perception Index
Relative CPI scores for 2011
1. N Zeeland = 9.5
 2. Denmark = 9.4
 5. Singapore = 9.2
 46. Mauritius = 5.1
 64. S Africa = 4.1
 154 Zimbabwe = 2.2
 182 Somalia = 1.0
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Weakness 3: Education
Good participation rate in primary ed
 Weak throughput rate in high school
 Drop in standards for NSC
 Misfit of post-school structures
 Universities: low participation and low
throughput
 NB This is the key source of
unemployment/unemploy-ability
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Weakness 4: Poverty and inequality
Dangerous levels of unemployment 1824 year olds
 Growing inequalities – social alienation
and the demand for economic liberation
 “Service delivery protests”
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Gini Coefficient
The Gini coefficient is a summary
statistic of income inequality that varies
from 0 (in the case of perfect equality
where all households earn equal
income) to 1 (in the case where one
household earns all the income and
other households earn nothing).
(Source: http://www.sarpn.org.za/documents/d0000990/)
Top 10 Countries with lowest Gini Coefficients
(Source: adapted from: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality)
Gini
Coefficient Column1 Column2
Rank
UN Figure Country
1
0.247 Denmark
2
3
4
5
6
7
8
9
10
0.249
0.25
0.254
0.258
0.258
0.262
0.269
0.269
0.281
Japan
Sweden
Czech Republic
Norway
Slovakia
Bosnia & Herz
Finland
Hungary
Ukraine
South Africa’s relative position
Gini
Coefficient
Column1 Column2
Rank
112
113
114
115
116
UN Figure
0.538
0.549
0.551
0.561
0.57
117
0.578 South Africa
118
119
120
121
0.584
0.586
0.592
0.601
Country
Honduras
Chile
Guatemala
Panama
Brazil
Paraguay
Colombia
Haiti
Bolivia
Opportunity 1: Use democracy
Defend democratic freedoms/institutions
 Expose and hold leaders accountable
 Diminish one party power to below 50%
 Constitution as supreme
law/Independent judiciary
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Ordinary people are NOT powerless
Participate in civil society
Anti-retroviral medicine
Arms deal re-opened
E-toll saga
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Opportunity 2: Ride the global power
shift
The wave of the new global order
From West to East and South
 From G8 to BRICS
 From old economies to emerging ones
 From commodity exports to beneficiation
 From weak to excellent infrastructure
(over R800bn)
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RSA in new global order…
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Stable macro-econ and monetary policies
Stable non-toxic financial/banking system
Independent Reserve Bank
Efficient tax system with on-target collection
Attractive governance rules (JSE rules, King
III, FICA)
Positive economic growth in global context
Opportunity 3: Green economies
SA is perfectly placed to develop leading
technologies in wind and solar energy
 Well positioned to benefit from ecotourism (quickest job creation)
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Opportunity 4: Positive mindset
Positive attitude makes the
difference
If a situation is on the knife’s edge:
 A positive mindset “creates” positive
effects
 A negative mindset is a self-fulfilling
prophecy
 My personal verdict: SA one of the best
bets in the period 2012-2020
Thank you very much!
Piet Naude
Nelson Mandela Metro University
Port Elizabeth