South Africa’s economy grew slower than Zimbabwe – but Ramaphosa celebrated it

 ·27 May 2024

President Cyril Ramaphosa celebrated South Africa’s economic growth even though it was much worse than all its peers and neighbours, including Zimbabwe and Mozambique.

On multiple occasions, Ramaphosa claimed the ruling ANC did a fantastic job to ensure the “economy has tripled in size since 1994”.

During his 2024 State of the Nation Address (SONA), he said the government has worked to revive the economy from a decade of stagnation.

“We have made progress. Our economy is today three times larger than it was 30 years ago,” he said.

He repeated the claim during his Freedom Day speech on 27 April, saying the ruling party was correcting past injustices and working to realise the full potential of an economy.

“Although there have been setbacks, although we have faced challenges both beyond our borders and at home, our economy has tripled in size since 1994,” he said.

Ramaphosa was even more aggressive in his speech when he signed the controversial National Health Insurance (NHI) Bill.

He likened the opposition to the NHI Bill to the fear of everyone getting to vote in South Africa and workers getting the right to strike.

“Many employers were fearful that workers will now have the right to strike, which will destroy the economy,” he said.

“Instead, having won the right to strike, we have been able to grow the economy almost threefold since the days of Apartheid.”

“This shows there was nothing to fear. They just feared ghosts,” Ramaphosa said.

However, tripling the economy over 30 years is dismal. Using absolute figures for three decades is disingenuous and makes things sound much better than they are.

To put South Africa’s economic growth into perspective, it is important to compare it to other countries or other periods.

  • In US dollars, South Africa’s economy grew five times faster in the 30 years before the ANC took power than in the 30 years after it took power.
  • Angola’s economy grew six times faster than South Africa’s over the last thirty years.
  • Even Zimbabwe’s economy, devastated by poor economic decisions, performed better over the last 30 years than South Africa’s.

These comparisons illustrate how poor South Africa’s economic growth has been over the last 30 years.

South Africa’s economy, measured in US$, is also significantly smaller than in 2011. The local economy shrunk from $458 billion in 2011 to $405 billion in 2022.

The charts below show how South Africa’s economic growth compares with its African and global peers.

Another way to look at South Africa’s economic growth

KPMG economist Frank Blackmore criticized Ramaphosa for using South Africa’s nominal GDP figures, which are boosted by inflation.

Rather than an increase in the amount of goods and services produced in South Africa, most of the country’s economic growth has been driven by rising prices.

Blackmore said the data shows that the South African economy has not even doubled in size from 1994 if you strip out the boost from inflation.

In 1994, the country’s GDP was around R2.4 trillion and has since expanded to around R4.6 trillion in real terms.

The country’s economic growth rate was a meagre 2% over the past thirty years, while in nominal terms, with inflation’s effects included, it grew around 4% per annum.

This shows that most of the growth President Ramaphosa mentioned was inflation-driven, not from an expansion in economic activity.

The real GDP growth of South Africa is shown in the graph below.

Read: Ramaphosa gives last-minute pitch to voters ahead of crucial election

Show comments
Subscribe to our daily newsletter