As South Africa braces for the upcoming elections, my deep investment in the nation's future intensifies. With more than 23 years of experience as a legal professional navigating the tumultuous waters of our macroeconomic landscape, I share a profound desire, echoing the sentiments of many South Africans, to witness our country realize its full potential. Our journey thus far has been fraught with challenges, from economic downturns to poor service delivery of basic needs and social upheavals. Yet, amidst the turbulence, a persistent glimmer of hope remains – a belief in our collective resilience and ingenuity to overcome adversity.
However, the prevailing sentiment among the general public, including my own, paints a stark picture of declining confidence in the ANC (Africa National Congress). At this critical juncture, the choices made by both the government and the electorate will chart the course of our democratic journey. The ANC's legacy, once a beacon of hope and liberation, now faces intense scrutiny. Diminishing trust in the government underscores the urgent need for genuine reform and accountability in the face of fiscal constraints, corruption, inadequate service delivery, and persistent inequalities.
In my professional career, I've borne witness to the pressing imperative to enhance our competitiveness and harness our abundant human potential. South Africa's rich tapestry of natural resources, cultural diversity, and skilled workforce positions us favourably on the global stage. Yet, realizing this potential demands more than mere rhetoric; it necessitates bold action and unwavering commitment.
Recognizing the nuanced complexity of life's realities and that life is far from binary, I reviewed the Department of Planning, Monitoring, and Evaluation’s publication on the 30-year Review of South African Democracy (SA Review) with an objective eye. I must admit – I was surprised at some of the improvements and was not expecting the candid acknowledgement by government of its shortcomings.
It's crucial to stress that this article does not seek to provide a comprehensive critique or exhaustive analysis of the SA Review. Instead, it adopts an optimistic perspective, acknowledging the presented insights and probing the opportunities they reveal for our nation's future. Below, I outline some of the positive developments of the past three decades, the persistent challenges we confront, and the government's envisioned steps forward.
Positive Developments
- Stable Democracy: South Africa has maintained a stable democracy for 30 years through the implementation of progressive policies and programmes.
- Improved Living Standards: Progress has been made in improving living standards by increasing access to basic needs such as housing, electricity, water, and sanitation. In the third decade of democracy (2014-2024), the focus has realigned to consolidating these gains by pursing the National Development Plan (NDP) Vision 2030, which aims to reduce unemployment, eradicate poverty and broaden access to public services by 2030.
- Tax Revenue: The significant advancements in establishing and maintaining an efficient tax administration system, has played a pivotal role in driving revenue collection. Tax revenue collection has consistently increased from ZAR143.3 billion in 1996 to ZAR1.5 trillion in 2022.
- Transparency: South Africa is ranked in the top five globally for budget transparency. The implementation of reforms like the National Anti-Corruption Advisory Council (NACAC), reflects a willing approach to combat corruption and address its broad socio-economic impact.
- Housing: With one of the largest social housing programmes in the world, 88.5 percent of South Africans have access to formal housing. In a concerted effort to increase accessibility to basic needs, nearly a quarter of the population or 13.7 million people, have benefited from the various housing programmes.
- Utilities Access: Over 80 percent of households have access to electricity, piped water, and sanitation.
- Economic Growth: South Africa's economy is one of the largest and most advanced in Africa, boasting long-term GDP growth averaging 2.4 percent from 1994 to 2022. There has been a notable surge in the expansion of small, micro, medium-sized enterprises (SMMEs) across South Africa, with data indicating an increase from 2.6 million in 2019 to 3.2 million in 2020.
- Employment Initiatives: Programs like the Job Summit and public-private partnerships have helped increase job opportunities. The South African labour force grew from 11.3 million in 1994 to 28.3 million in 2023, with total employment recovering to pre-COVID levels of 16.7 million in 2023, indicating a recovery of approximately two million jobs lost due to the pandemic.
- Investment: The South African Investment Conference mobilized over ZAR1.5 trillion in investment commitments by 2023. South Africa hosts over 180 Fortune Global 500 multinationals operating within our boarders. Additionally, South African firms are expanding their operations through outward investments, emerging as global players. Companies like MTN and Vodacom have demonstrated significant growth and influence on an international scale.
- Education: There has been a substantial decline in the percentage of individuals with no formal schooling which reduced from 19 percent in 1996 to seven percent in 2022.
Continued Challenges
- Fiscal Constraints: Government debt rose to 67.4 percent of GDP due to bailouts and COVID-19 interventions. While South Africa has made significant progress over the last two decades, there is still much to be done to enhance economic transformation and wealth distribution. Present fiscal constraints limit the government's capacity to pursue key policy priorities and hinders access to essential frontline public services.
- Public Trust: Confidence in local government has decreased significantly primarily due to pervasive corruption and instances of bribery solicitation within public services. Moreover, citizens' faith in the country's management has diminished, with unemployment emerging as the most pressing concern, closely followed by poverty. Corruption, service delivery failures and challenges to the financial sustainability of local government remain critical drivers of declining citizens’ trust in government.
- Service Delivery: Urbanization outpaces the government's ability to meet service needs, resulting in shortages in schools, healthcare, and other infrastructure. These gaps compromise service delivery quality and impact the most vulnerable. Overall satisfaction rates have declined from 72.5 percent in 2020 to 61.1 percent in 2023. Dysfunctionality arises from poor governance, weak institutional capacity, financial mismanagement, and political instability, which negatively affects service delivery to communities.
- Economic Constraints: Issues with energy security, transport, and infrastructure persist, causing the economy to perform below its full potential. Policies for economic redress, such as affirmative action and the broad-based black economic empowerment (B-BBEE), have made substantial inroads, but their overall results remain inadequate, as attested by indicators such as income inequality and corporate ownership. The South African economy experienced strong growth followed by a sharp contraction due to the global financial crisis (GFC), and has since been on a sustained downward trend. Per capita economic growth has lagged behind GDP, worsening notably after the GFC and recording zero or negative growth between 2014 and 2020.
- Gender Inequality: Progress in women's rights and economic opportunities has been slow, impeded by deep-rooted structural socio-economic inequalities and gender disparities. Over the past three decades, South Africa has enacted various laws to promote women's rights and uphold gender equality in employment, education, justice, and protection against violence. Despite advances in social welfare, access to services, and political representation, gender inequality persists. Women's labour force participation was a mere 45 percent in 2018, one of the lowest in the SADC region, with significant gender pay gaps. Although representation in Parliament and senior management has improved, the private sector continues to lag. High levels of gender-based violence and discrimination underscores the gap between policy and effective implementation.
- Corruption: The Transparency Corruption Perception Index score dropped to 41 out of 100 in 2023. Since 1994, public service has established an integrity system, including laws and mechanisms to combat corruption. However, the implementation of ethical standards is frequently perfunctory, emphasising institutional technical compliance rather than addressing the impact of flawed service delivery. The system designed to detect and prevent corruption is often exploited for political purposes or to target individuals who resist corruption. Increasing perceptions of corruption are correlated with lower GDP growth and diminished trust in the government.
- Unemployment: Persistent high unemployment rates, particularly among the youth, remain a significant challenge in South Africa. South Africa's labour force has expanded however, despite this growth, the unemployment rate reached 31.9 percent in 2023, one of the highest globally. Concerns also arise from the large number of young people classified as Not in Employment, Education, or Training (NEET), as well as the difficulties faced by less-skilled and less-educated individuals in finding employment.
- Education and Skills Development Gaps: While there has been some improvement in education, particularly in increased school attendance, it may not adequately address the country's social and economic skills needs. Persistent inequalities between provinces and socioeconomic groups contribute to educational disparities, with significant challenges in foundational learning evident in the public schooling system. For instance, 81 percent of Foundation Phase students struggle with reading comprehension. Furthermore, the slow progression in acquiring post-school qualifications remains a concern, with only 12 percent of the population having such qualifications in 2022 compared to seven percent in 1996. Access to education also remains an issue, with only a marginal three percent increase in attendance at educational institutions among individuals aged five to 24 years between 1996 and 2022.
- Crime: The estimated annual cost of crime, including theft and vandalism, exceeds ZAR 47 billion, exacerbated by corruption and inadequate maintenance systems. Efforts to combat serious crimes have shown mixed results, with a decline in contact crimes since the early 2000s but recent years witnessing a resurgence, particularly concerning violence against women and children. Despite a decrease in overall serious crimes from 2.7 million cases in 2003 to approximately 1.7 million in 2022, these levels remain unacceptably high.
- Energy Crisis: South Africa is currently facing a challenge of energy insecurity, largely attributed to the inadequate electricity generation versus the growing demand. This electricity supply shortfall has potential to reverse the human development gains achieved through the provision of electricity access infrastructure.
- Infrastructure deficits: While formal housing accessibility has improved for some, the growing demand has outpaced supply, resulting in a surge of informal dwellings. Approximately 2.1 million households reside in such structures. The expansion of these settlements persists due to deficient service delivery. Insufficient investment in infrastructure management exacerbates these challenges, while municipalities face severe fiscal and infrastructure concerns. According to the Auditor General of South Africa, as of June 2022, 29 percent of municipalities were on the verge of operational collapse.
Government sentiments on Future Steps
- Governance and Fiscal Stability: Improving governance and promoting fiscal stability involves a thorough review of the local government fiscal framework including possible local government restructuring to improve financial sustainability. The National Treasury stands as a pillar of strength within the state machinery, and in the face of current fiscal and financial management challenges, its capabilities should be reinforced.
- Public Sector Professionalism: The implementation process of the Public Sector Professionalisation Framework needs to be expedited to bolster the capacity of government departments in fulfilling their mandates. It's vital to ensure that skilled professionals are appointed to key positions, including critical technical roles, to strengthen and capacitate local government entities.
- Digital Transformation: Advance digital infrastructure and projects to modernise key frontline service delivery points and reduce unnecessary red tape, to foster an evolving citizen-centric approach.
- Economic Reforms: Continuing reforms to enhance infrastructure and stimulate economic growth remains crucial. A comprehensive review of macroeconomic growth policy and strategy is necessary, accompanied by a strengthened state capacity in policy execution. Immediate constraints to growth must be resolved, while institutional mandates hindering economic expansion and employment opportunities require careful scrutiny.
- Social Compacts: Accelerate the implementation of programs to advance and empower women, youth and persons with disabilities. This entails ensuring adequate resourcing, improving coordination to minimise redundancies and enhance efficacy, and expanding successful initiatives through collaboration with non-state actors such as NGO's, the private sector and the international community to address inequality and poverty.
- Investing in Infrastructure: Developing a Comprehensive Infrastructure Plan (CIP) serves as a business model to effectively align government programs for sustainable service delivery. It is imperative to maintain and upgrade aging infrastructure, including treatment plants, while implementing water conservation programs. Additionally, supporting municipalities in developing master plans, repair and maintenance strategies, and revenue enhancement plans is crucial.
- Improving Education: Develop and implement a medium-to-long term plan for expanding the education sector at all levels to meet the needs of the growing population. This involves broadening programs that innovate infrastructure development while focusing on enhancing the quality and efficiency of education. In the Post-School Education and Training (PSET) sector, capitalize on the successes of the National Student Financial Aid Scheme (NSFAS) and introduce a comprehensive student funding model that ensures financial sustainability.
- Youth and Women Empowerment: Review existing policies on incentives and government assistance for small enterprises, youth development, and women empowerment to streamline and combine resources, thereby enhancing effectiveness and scale.
As I reflect on the path ahead, whilst Government has articulated the areas of focus, I can't help emphasis that a collective effort is required URGENTLY. The upcoming elections serve as a pivotal moment—a chance for us to chart a new course toward prosperity and progress. But to do so, we must confront the hard truths about our current reality and confront the systemic issues that hold us back. Several questions arise that our Government, public and private sectors and us as South African citizens must contemplate: Are we, as a society, prepared to accept the harsh truths about our current state and take responsibility for the future? Can we muster the inner strength to remain resilient in the face of ongoing challenges and setbacks? Will we do the right thing? Will we prioritize the common good over individual interests, and act with integrity and wisdom in our civic duties? Will we do the selfless thing or will we do the easy thing, the self-interested thing? In this introspective moment, I'm reminded of the words of Marcus Aurelius: "The impediment to action advances action. What stands in the way becomes the way." The realization of South Africa's potential hinges not just on political will but on collective action and societal engagement. As South Africans prepare to cast their votes, the onus is on all stakeholders to create a future that honours the promises of democracy and paves the way for us to meet our challenges with courage and for the collective good.
Authored by Deepa Vallabh.
