Category Economy
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SA Government needs to go beyond snapshots

12 February 2024 Riskonet Africa

The 2024 State of the Nation address was nothing more than a series of bland and recycled "snapshots" rather than an opportunity to outline strategic benchmarks to assess and address the degree of underperformance experienced across multiple sectors.

Volker Von Widdern Head of Strategic Risk at Riskonet Africa believes there should have been more focus on the importance of data-driven scenario planning, considering South Africa's high population growth rate, and substantial uncontrolled immigration.

"The International Monetary Fund forecasts economic growth of 4% for emerging economies. In contrast, South Africa's growth is projected at around 1%, with GDP per person declining consistently since 2019. While COVID-19 has been a significant factor, most emerging economies have recovered, signalling deeper issues within our economic strategic planning.

Economic growth of 3% is necessary to steer clear of a fiscal cliff, whereas a 5% growth rate is imperative to cover the costs of social programs, even before considering the National Health Insurance (NHI) plan.

Achieving a 4% growth rate would necessitate a 40% increase in power generation over the next five years, highlighting a significant gap in our current capacity." he says.

Von Widdern also says little of relevance was said regarding the country’s perpetual power crisis. Von Widdern believes more should have been said about co-management models with international consortia to meet a required 40,000MW generation target, presenting it as an empowerment opportunity with potential for skill transfer and high-performing power stations.

Furthermore, Von Widdern says the country should be disappointed that no reference was made to strategic metrics that should be applied to education and skills development, noting the dire need for improvement in reading comprehension among Grade 4 learners and the production of skilled technicians, engineers, and scientists.
Von Widdern believes South Africa needs to with growing urgency embrace strategic planning and significant reforms across key sectors to ensure sustainable growth and development. Government and stakeholders he says need to prioritise strategic benchmarks and fundamental changes over temporary fixes to address the nation's pressing challenges.

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