South Africa Economy Declines As Country Continues To Fail In Its Economic Potential
South Africa continues to face an economic crisis as the governing party, the African National Congress, has failed to solve the country’s economic problems. The African National Congress took control of South Africa in 1994 after South Africans voted to get rid of the system of apartheid. Currently, the growth rate for South Africa is only 2 percent as 34.9 percent of all South Africans are unemployed.
As Democratic Alliance leader Mmusi Maimane explained to Business Tech, young South Africans are struggling the most.
“Almost 8.4 million South Africans do not have jobs, while two in every three of those are young people who are left ill-equipped by an inadequate education system. They are not only unemployed, but increasingly unemployable.”
The government of South Africa faces many problems in trying to solve the economic crisis. The first crisis faced by South Africans is the electricity crisis. Critics cite power company Eskom as the biggest reason for the problem because of their monopoly on the power grid in South Africa.
Maimane said there needed to be a focus on breaking the monopoly Eskom created.
“To alleviate the strain in the short term, we would commit an initial R500 million from the Department of Trade and Industry for the purchase of industrial-size generators for manufacturing enterprises.”
Tourism and mining sectors have suffered because of the job-killing policies of the ANC. Visa requirements, lack of small business support, and labor policy also contributed to the problems suffered by the struggling economy.
South Africa was once the bread basket of Africa. With the high number of racially-motivated farm murders, farming in South Africa has been greatly reduced.
Another challenge to creating jobs and reducing unemployment in South Africa is the introduction of the policy of Black Economic Empowerment (BEE). This economic policy effectively excludes whites from the marketplace and places unqualified applicants into jobs to meet economic quotas.
Unfortunately, the policy has benefited few. As reported in the Independent, BEE has only helped about 15 percent of blacks in South Africa, while the other 85 percent struggle because they have no chance of achieving any of the economic deals available. The policy also harms this group by reducing investment, growth, and jobs.
One reason cited for the stifling of economic opportunity is the SA Communist Party. The SA Communist Party has used BEE to help bring about first a socialist and then a communist state preventing the chance of a middle class of any color. Guaranteeing property rights and increasing economic freedom for all South Africans have been cited as factors that would contribute to growing the South Africa economy.
What do you believe is the solution to prospering the South Africa economy? What policies do you believe the government is using that are stifling growth?
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