SA needs a quick fix after Zuma’s looting years

The country is still bleeding, says Investec’s chief economist.
The knock felt by the primary and secondary sectors has moved into the tertiary sector. ‘We are kicking the legs out of the economy,’ says Citi Research’s Gina Schoeman (second from left). Image: Moneyweb

As an open economy, South Africa is more at risk in the global economic slowdown. This was the consensus view at the JSE SA Trade Connect panel discussion on Tuesday morning.

Between 2009 and 2017, the South African economy went backwards. Corruption, rising debt servicing costs, failure to pay value-added tax refunds on time, not to mention additional borrowing to fund Eskom and other state-owned enterprises (SOEs) has set the country back.

Investec SA chief economist Annabel Bishop says that despite talk of a ‘New Dawn’, the country is still bleeding. “The legacy impact of a near-decade of overspending continues to affect the debt figures, and weak economic growth afflicts revenue collection.”

The issue of time

After a decade of slow growth, the question is whether there is enough time and political will to make the necessary changes?

Bishop is worried that the changes are not happening quickly enough to resolve SOE debt, dragging down confidence and the currency, and says the country might run out of time. 

“No, we are running out of time,” she corrects.  

She says the legacy of poor governance during the 2009-2017 period has weakened economic growth prospects for the remainder of this year. Added to this is the overhang of SOE debt levels as well as the high regulatory and tax burden, which quells business and consumer confidence.

“The Eskom debt crisis continues to be a concern, dragging down the rand and resulting in low investor confidence.”

She says South Africa is showing a contraction in industrial production of around 8% before the power cuts this month, and until the uncertainties around the SOEs are resolved, the country will not see its economy grow.

“We must break out of the self-reinforcing negative cycle,” says Bishop.

The consensus growth forecast for 2019 is now at 0.5% year on year, from closer to 1.5% year on year at the start of this year.

And the latest government figures show gross debt was already at 58.3% of GDP at the end of June (first quarter), versus the 56.2% projected for the whole of 2019/20.

Knock-on effect

Gina Schoeman, director of Citi Research, says the knock felt by the primary and secondary sectors has now moved into the tertiary sector.

“Our tertiary sector and financial services have always been our darling sectors,” she says. “But because we have had a decade where the primary sector [agriculture and mining] and the primary sector [manufacturing and construction] have really performed very poorly, they demand fewer services and they provide less income.

She says that this knock-on effect has resulted in the tertiary sector [services, retail, tourism] registering lower growth than in the recession period South Africa experienced.

“That is a big concern because we are kicking the legs out of the economy,” says Schoeman.

Rating agency outlook

Last October, SA was downgraded to ‘junk’ status by rating agencies Standard & Poor’s and Fitch.

Schoeman says institutional strength is central to rating agency methodology. She says rating agencies such as Moody’s – which is holding off on downgrading SA to junk – are judging President Cyril Ramaphosa’s performance following the elections earlier this year.

She says the country could possibly receive a negative outlook, giving it enough time to implement all the proposed economic policies, before it goes back to being stable. Or the rating agencies could say they will give the review after looking into recent developments in a couple of weeks.

Solutions are all longer-term, structural

On the other hand, Isaah Mhlanga, Alexander Forbes Group chief economist, projects a negative outlook, due in part to lower economic fundamentals being worse than National Treasury expectations, and increased debt costs related to SOEs.

“We have to accept that all of the solutions available to us are longer-term, structural measures,” Mhlanga says.

Though the panel has confidence in the current administration’s ability to deliver the much-needed economic turnaround and boost investor confidence, it urges the private and public sector to work together to achieve sustainable solutions.



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Quick and Fix are not words that exist in the ANC vocabulary.

99% of the looters are still in office – Only Zoomers has left (well maybe)

Do NOT expect any change – in fact it will get a lot worse !!!!!

exactly….the ANC and its ideology is the problem…not Zuma!

No, it doesn’t matter what the ideology is, the problem is the crime-syndicate mentality, the ANC (and for that matter EFF) version of omerta.

Yep.looting will never stop.

The fundamental problem in SA is that the medicine the country needs, including reining in the unions and cancelling the Special Olympics for certain groups, is so bitter to the gravy train passengers, that there will be active sabotage of any necessary measures.

Fix How?

The justice system is useless and the NPA has no Capacity to deal with this.

Why don’t they contract Afriform to just handle some of the cases? Its a drop in the ocean bit it will be a drop more than what you will ever get from this bunch.

It will never happen as the ANC protects its own. They are all crooks and all of them right from the top were there during the ZUMA years.

Fortunately, we have a strong opposition……….

This must have sarcastic

Under CR ANC incompetence is still being rewarded for doing damage to SA’s finance – just look at the IT lady from SARS who walked away with R1.8 million. The Looting does not seemed to have slowed down, if anything the looters have been emboldended by the lack of any action to stop/capture them. In SA the ANC seems to have decided that instead of a court case a commission of enquiry will suffice – after which nothing happens, the thieves are still out and about, playing golf, living large. The fix is get the lazy overpaid civil servants onto target based/performance driven contracts and if they don’t perform replace them [I know, it’s like I’m on drugs hey?]. CR is doing a LOT of talking but there has been very little ACTION. STOP the looting, get as much of the money bak as possible, put some folks in jail – show the thieves that there are consequences and maybe, they’ll think twice – maybe.

Yip, as I have stated previously, Cyril needs to develop some testicular fortitude – mucho pronto – otherwise we will simply follow Zim into the abyss!! It won’t matter what colour, gender or party you are then – we will all go down together.

Wake up CR!!!! Your country needs you!!!

Still blaming Zuma for everything! That’s a sign of biased journalism. Why we never say anything about the man in charge. If the current leader has no vision, why is it Zuma’s problem? Fix what’s broken or if you can’t, let those who can do. The biggest problem in this country is we have POWER hungry leaders! No vision whatsoever.

We can blame apartheid forever, but forgive and forget the ANC? Problem with this country is not the whites or the blacks – its the politicians – We have by far the worst and most incompetent bunch of politicians in the world!


There is a case to be made against Zuma. He looted from the poor. His pension must be forfeited to the state.

Find a way to kick the ANC the hell out of power.

Wow this is news to me, I never knew.

May I be so bold as to ask when this will happen?

We are tired, Iam tired of this Zuma that, Zuma this song. Take responsibility. IF you cant turn the fortune of your company in the prevailing environment juss hit the road and let those who can come and and perform. For how long are going to blame Msholozi for our deficiencies. Its been two years now and at every corner one has to bring his name to cover up.. Perform or ship out Plzzz.

But surely you must acknowledge the massive damage he did. In terms of years the damage he perpetrated in 9 years is much more than 2 years in terms of fixing.

Yeah right; Zuma supported completely by Cyril and Pravin, who we now rely on to be saviours, every step of the way. Bitter, stupid, irony.


I’d be careful with the “perform or ship out” comment. MANY of your fellow Zimbabweans have done exactly that: they’ve shipped out their skills to SA, and started businesses here.

WHY have they NOT CHOSEN to remain in (what’s left of Rhodesia..) and be successful in say Harare, after freedom was achieved?

Looting is in the blood and if you think there is a quick fix you are naïve.

If you are hungry and want to make ends meet or makeit in South Africa, use the Zuma name! Easy.

The man hasn’t been President for 2 years or so and is not responsible for the state of the country, economy and any business at this moment.

Repatriating the stolen billions by the Zuptas would be a quick fix….in my opinion!

End of comments.





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