6 ways South Africa is moving in the right direction

A new report from the Institute of Race Relations (IRR), seeks to remind South Africans of the significant progress the country has made under democracy, and the scope for resuming an upward trajectory towards growth and optimism.

The report: ‘Life in South Africa: Reasons for Hope’ highlights progress in areas ranging from the economy to living conditions, health, education and crime.

“The effects of higher levels of investment-driven growth, and sensible policy, particularly in the era to 2007, provided the government with the revenues to bring about vast improvements in living standards via its service delivery efforts,” it said.

Service delivery was one of the key successes of the African National Congress in government,” the report’s authors said.

“This is not to overlook the many and varied failures both in the extent and in the quality of services delivered. Nor is it to suggest that State-driven delivery is a sustainable path out of poverty …but the numbers (in the report) are so great that they speak to a profoundly important raising of the living- standards floor in our country.”

Among the positives highlighted in the report:

  • Inflation dropped from 9% in 1994 to 5.3% in 2017;
  • 10 formal houses were built for every shack newly erected;
  • The number of black South Africans with a job increased from 4.9 million in 1994 to over 12 million in 2017;
  • The middle class has doubled in size;
  • The number of students enrolled at universities has increased almost threefold since 1985;
  • The murder rate has been halved through the democratic era.

“The importance of this report is that it reminds us of the good story to tell, which is often lost in the doom-and-gloom narrative about the problems we still face,” the IRR said.

“We hope to restore some balance to the debate about life in South Africa, and to dispel the impression that democracy has failed to deliver a better life..”

The report stated: “Our sense is that far more has been achieved in South Africa over the past two decades than many people understand. There is a lot to be proud of and in no way is it true to say that ‘South Africa is no better than it was in 1994’, or that ‘South Africans have refused to work together to bring about change’.

“This is a substantively better society to live in than it was in 1994. We think that, as a result of that progress, social and other relations remain predominantly sound.”

The report said that credit must also go to the entrepreneurs, investors, employers, and employees, whose hard work and risk-taking generated the tax revenue that funded the free and subsidised houses and services, and social welfare.

“Too often, these entrepreneurs and the middle classes are hounded as an uncaring and selfish elite who have done nothing to bring about a better future. They have done a great deal and deserve great credit.”

However, the report cautions that ‘there must be no doubt that the radical inflection of government policy after 2007 did great harm to the South African economy and stalled much of the progress that was being made to that point’.

The IRR is particularly worried that the policy of expropriation without compensation or EWC could do such damage as to erode much of the progress made over the past two decades and completely change South Africa’s living standards trajectory for the worse.

“If policy makers can adopt sensible ideas that draw investment, create new wealth and jobs, and grow the economy, then there is no reason to believe that the trajectory our country was on into 2007 cannot be resumed,” the report said.

The report noted that it is often alleged that little has improved in South Africa after 1994, but the real GDP per capita increased from R42,386 in 1994 to R56,020 in 2017, or by over 30%.

The same pattern is reflected in disposable income where per capita income increased from R23,686 in 1994 to R31,460 in 2007, or by over 32%.

“Inflation is the enemy of the poor in that it reduces the purchasing power of households. It is, therefore, a very dangerous early driver of social and political instability. It is to be welcomed, then, that South Africa has done particularly well in keeping a lid on the inflation rate since 1994 – an indicator that speaks to sensible macro-economic management,” the report said.

On employment data, the IRR said that data provides a vivid reflection of the progress that has been made.

“It is not true, as many populist activists and politicians allege, that South Africa has suffered two decades of ‘jobless growth’. Rather the number of black people with a job increased from 4.9 million in 1994 to over 12 million last year, while the total number of employed people roughly doubled.”

Read: Why are South Africans feeling so glum at the moment?

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6 ways South Africa is moving in the right direction