Magnus Heystek: How the ANC destroyed the SA economy – and your wealth – in 15 years.
But more of the same to come, says Ramaphosa.
SA economy underperforms by 43% compared to emerging markets.
Ramaphosa’s policies worsen poverty and unemployment.
ANC mismanagement leads to economic collapse since 2010.
By Magnus Heystek
Perhaps US President Donald Trump should not have ambushed Cyril Ramaphosa with a video clip of Julius Malema singing “Kill the Boer” in the White House early last month but instead put up a slide showing how the SA economy has underperformed by an astonishing 43% against its emerging market peers over the past 15 years.
He could even have called it “Kill the economy. Kill the wealthy”.
But then again, Cyril’s response would probably have been the same:” I haven’t seen this before”, feigning ignorance as he normally tends to do. Just like he wasn’t aware that the inner-city of Johannesburg has collapsed, for example. “I wasn’t aware of that,” he reportedly said about the city he lives in.
This is what you get when you as president of a country has never held an open question press conference, like DJT d about twice a week since he stepped into the Oval office.
The mismanagement of the SA economy over the past 15 years, when compared to historical trends and against its peers in the emerging markets (not even developed markets) is a crime of much greater impact on millions of people in SA when compared to the hateful rhetoric of a desperate radical politician overseeing the implosion of his soon to be fringe party.
I have spent some time looking at the economic trajectories of mostly free-market economies in the 20th and 21st centuries, and I battled to find an economy so badly mismanaged, so badly destroyed as SA under ANC rule since 2010.
Argentina after the 1st World War was one of the largest economies in the world but since then a succession of socialist governments pushed Argentina into several debt defaults and a collapse of its previously modern infrastructure. Other countries that come to mind would be Cuba (after Castro took over in 1958), and more recently Venezuela.
There are examples of economies that have collapsed, but they would include countries mostly at war or undergoing civil unrest such as Libya, Syria and Eritrea which were all involved in wars and take -overs by opposing forces. But nothing comes close to economic destruction so relentlessly pursued by a government in power than the ANC, first under Jacob Zuma and since 2018 under Cyril Ramaphosa.
And if there is not a dramatic turnaround in the management of the economy, of which I see very little signs, the collapse will accelerate over the next 10-15 years. With perhaps the exception of the Western Cape, the rest of the country will end up increasingly looking like all other post-colonialist African countries, poor, ungovernable, with Mafia-type cartels running large parts of the economy. And with most of the investable capital—and bright young minds of all races—rushing for the exits in search of a better life. By that time, foreign exchange controls will have been re-introduced a long time ago.
Two phases. First boom and then the bust
The performance of the SA economy this century can be divided into two very distinct phases. From about 2002 to 2008 the SA economy grew at an average rate of 4.5% per annum, the rand strengthened from R13 to around R6.50 while government debt was a mere 25% of GDP at the end of this period.
Unemployment was in the low 20%, and real wealth was being created.
In short: SA was a booming economy and with a rapid increase in GDP per capita things were looking extremely well. Truly, the Rainbow Nation.
This boom, however, was not the consequence of some brilliant long-term economic plan by the ANC and its cadres being deployed into all spheres of government control. It was mainly the result of China joining the World Trade Organisation (WTO), and with it a surge in demand (and prices) for the raw materials SA had plenty of. It was pure luck, and it was a typical commodity boom, which ended in 2008 with the Great Financial Crisis.
But SA had some added luck on its side: it was the venue for the 2010 Soccer World Cup, which, for a while, kept the economic momentum in SA going, as a result of major infra-structure projects that were required to host the world cup.
2010: The turning point
Since 2010 the performance of the SA economy has been showing regressive signs, slowly but surely. This period from 2010 to 2017 was one where the full impact of the Zuma-administration started popping up in key economic indicators. Slowly and almost imperceptible at first, but it was there for those doing deep-dive analysis into the emerging trends.
Like the global ratings agencies, who do not allow feelings of patriotism to cloud their judgement. The chart below shows global credit history in its full glory: from junk status to investment grade and back to junk status in just over 20 years! That takes some doing.
South Africa’s long-term foreign currency ratings history (1994-2024)
