Time is of the essence and time to waste is what South Africa doesn’t have. Even more so for President Cyril Ramaphosa as he will take his oath of office for his first five-year term when he is inaugurated next Saturday.
This week’s very bad economic signals should help to inform Ramaphosa that there is no time to play politics. The country needs fixing – now.
First, unemployment rose to 27.6% – its highest level in almost 15 years. Even more alarming is that youth unemployment – for those aged between 15 and 24 years – rose to a very steep 55.2%.
Second, retail sales growth slowed to just 0.2% year on year in March. This poor figure adds to views that the economy could have contracted by as much as 2% in the first quarter of the year. Another economic contraction doesn’t inspire confidence.
Third, Moody’s Investors Service put out a note that it expected the government debt burden to rise to 65% of gross domestic product (GDP) by 2023 from 55.6% at present. This is a lot worse than Treasury’s projections of gross national debt peaking at 60.2% of GDP in the fiscal year running from April 2023 to March 2024.
The unemployment and retail figures demonstrate the hole out of which Ramaphosa has to dig South Africa.
Yes, the past 14 months that Ramaphosa has been in office have been used mostly to stabilise the economy from the mess that it has been for the past decade or so. Consumer and business confidence rose but these have since slumped. The investment and jobs summit Ramaphosa hosted last year should start showing rewards to help lift the country from the hole.
As Ramaphosa battles to decide who will form part of his Cabinet, it is clear that he needs men and women who will be interested only in fixing the country’s economy. Political considerations should be set aside and those lieutenants he chooses must be ones who will put South Africa first – instead of rewarding those who helped him rise to the highest office in the land.
If no drastic action is taken to improve the economy, unemployment will grow, inequality will widen and poverty will be extended to more citizens.
We do not have time. Please do the right thing for the country, Mr President.