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How to save South Africa

Published Feb 17, 2020


On a midsummer morning in 1999, John F. Kennedy Jr., his wife Carolyn and his sister-in-law Lauren boarded an aircraft in New York to Massachusetts to attend the wedding of his cousin, Rory. The three never arrived at Martha’s Vineyard Airport, and the wedding did not happen as scheduled. The story that is told is that John F. Kennedy Jr. (the son of assassinated US President John F. Kennedy) who was a pilot, lost control of the aircraft, and it crashed into the Atlantic Ocean 15 minutes before arrival.

The possible reasons why John F. Kennedy Jr. might have lost control of the aircraft is either because the gyroscope – the device which is used to determine whether aeroplanes are going up or down or moving forward or backward – stopped functioning or he stopped relying on it. Either way, once a pilot no longer receives information from the gyroscope, the pilot becomes disoriented and the plane eventually does what is called “a dead man’s dive” and crashes. When gyroscopes fail “a dead man’s dive” is almost always inevitable.

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The crash, or the cause thereof, although it happened just over 20 years ago, is enough to make it a metaphor for contemporary South Africa. Collectively as South Africans, we are either overwhelmed by the haze of information about the crises besieging our country or we are stubbornly showing a nonchalant demeanour. Our country’s gyroscope is dysfunctional and we are teetering on the brink of an economic collapse. We ought to brace ourselves to save our economy and prevent it from the crash.

This year, the South African economy is expected to grow by an average of 0.9% compared to 7% in India. According to StatsSA, the unemployment rate is now at a level of 29%. Technically the unemployment rate only counts people who are actively looking for jobs, and South Africa’s effective unemployment rate can be as high as 45%.

According to the Quarterly Labour Force Survey (QLFS), the graduate unemployment (university degrees) rose from 3.6% in 2008 to 7% in 2018, for diploma holders, from 7.7% to 12.2%, for matriculates, from 23.3% to 28.1%, and for people who did not complete matric from 25.8% to 31.2%. The end also does not seem to be in sight. The gradual weakening of the employment statistics from 2008 to 2018 can be attributed to a weak average economic growth of 1.8% during the same period while the number of university graduates increased at an annual rate of 5% during the same period thus moving the total number of graduates from 1.1 million to 1.7 million.

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According to the IMF in 2019, the size of the South African economy was US$358 billion. This is less than that of Singapore, a city-state of 5 million people compared to South Africa’s 57 million people. The IMF ranks South Africa 35, and many other small countries have economies more significant than ours, and these include the United Arab Emirates, Norway, Australia, Malaysia, Ireland, and Israel. I suppose population size is not as important as productivity, and the much talked about demographic dividend might have negative economic consequences after all.

South Africa is losing critical skills at an astonishing rate. Between April 2018 and April 2019, New Zealand received 8200 migrants from South Africa, and many of them are university graduates and professionals. Our education system is failing, and the number of students studying mathematics in Grade 12 dropped from 270,516 in 2018 to 222,034 in 2019 and only 54% of those passed it. This is concerning, given that the pass mark is 30%. According to Inyathelo, of the 18% of the matriculants who go to university, 47% dropout and if we include distance education, then the dropout is 68%.

Our universities are, therefore, not efficient. No country can lose critical skills at the rate of South Africa and economically survive. The good news is that migration from the rest of the African continent is healthy even though it has other negative consequences such as the occasional flaring up of xenophobic attacks directed at African migrants.

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One area that illustrates the depth of our problems is the State-Owned Enterprises (SOEs). The South African Airways (SAA) received a bailout of R2 billion in December 2019. In January 2020 it required a further bailout of R3.5bn. In total, SAA has received approximately R39bn in government guarantees and bailouts so far.

This puts our government at risk. Eskom spent R450bn in building Medupe and Khusile power stations, and these power stations do not optimally work. The only way out for South Africa to fix the SOEs will be a combination of finding strategic equity partners and selling some of them; however, we are stuck in the debates about private versus public partnerships. We have to be bold and take a leaf from what Deng Xiaoping, the father of modern China, said: “it does not matter whether the cat is black or white if it catches mice, it is a good cat.” We have to pursue a strategy that works instead of pursuing an ideological route.

Given all these horrible statistics, the crucial question that we should ask ourselves is whether South Africa can be saved? Is South Africa experiencing the “dead man’s jump” which will result in an economic crash? Will South Africa survive the spectre of credit downgrade? The answers to these questions lie on rediscovering our gyroscope and using it as a guide to know what works, what does not work, and what needs to be done henceforth.

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In Europe after the renaissance, a movement led by Martin Luther swept across mainly northern Europe. The reformation, as the movement was called, made the European people more literate and made them take individual responsibilities for their actions. It shifted the locus of control from the Catholic church to the people. The result of reformation was that it made countries that reformed such as Germany, the UK, Holland and later France, more prosperous than states that did not change. South Africa needs its reformation to move away from the economic quagmire it finds itself to prosperity. To paraphrase the first President of Senegal Leopold Sengor, South Africa should move away from emotional thinking to rational thinking.

The consequence of this should be that we see more PowerPoint presentations in conferences of political parties and less singing! We cannot sing ourselves out of this economic quagmire. We need to bring more scientific thinking into our society and inculcate the culture of making decisions based on data. Advances in artificial intelligence, which are ushered by the fourth industrial revolution, allow for complex decision making in areas such as agriculture, energy and health to be aided by smartphones. We need to get our gyroscope working again!

Tshilidzi Marwala is a professor and the Vice-Chancellor of the University of Johannesburg. He deputises President Cyril Ramaphosa on the South African Presidential Commission on the Fourth Industrial Revolution.

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