South Africa’s economic disaster under Zuma shown in two graphs

 ·10 Apr 2018

Economist for, Mike Schussler, has published two graphs showing how much Jacob Zuma’s presidency has affected investment in the country.

The graphs depict the difference between South African firms investing abroad and foreign firms investing into South Africa – as a percentage of GDP.

“The Zuma years and the fact that jobs and income were lost is summed up in this picture,” Schussler said in a post published on Tuesday (10 April).

“SA succeeded in local firms investing ever more elsewhere, while foreign firms reduced investments here,” he said.

“It helps those who have investments in things like pension funds for all of us, but it makes it harder for new entrants to get jobs, as jobs will be more static in nature or even decline.

“The rand gets a form of help in dividends flowing back. But a developing country normally attracts investments from all over. SA has pushed investors away. Corruption and bad policies hurt business, and therefore people.”

“This will take years to fix. This is worse than during the disinvestment campaign in the 1970s and 1980s,” he said.

Speaking to Bloomberg at the start of April, Rand Merchant Bank’s Isaah Mhlanga said that South Africa might take a while to shake off the curse of Jacob Zuma on its credit ratings.

“If you look at S&P, even if they upped the economic forecast, they still view the hurdle for thinking about upgrades as too high,” Mhlanga said, referring to S&P on March 27 doubling its estimate for GDP expansion this year to 2%.

Their concerns have been structural reforms. Yes, we’ve seen a lot of changes and a lot of promises, but we haven’t seen actual policy implementation coming through.”

Read: ‘Curse of Zuma’ to linger over SA’s economy for years to come

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