Mandela’s South Africa: Two decades of freedom

first_imgClick on image to download the report. “In April 1994, the South African economy literally had junk status,” says Colin Coleman of Goldman Sachs. “South Africa confounded apartheid apologists by enjoying a peace dividend from 1994 to 2007 with real GDP growth averaging 3.6% per annum, only slowing to 2.3% following the 2008 global financial crisis.” (Images: Goldman Sachs) MEDIA CONTACTS • Goldman Sachs International 13th Floor The Forum 2 Maude Street Sandton 2196 + 27 11 303 2700 RELATED ARTICLES • Take action for competitiveness • Ramaphosa unpacks the NDP • SA is getting plenty right • We look up to you: Ibrahim • One Young World celebrates MandelaColin Coleman, Partner Managing Director, Goldman SachsAfter almost two decades of democracy the world is asking: “What has Nelson Mandela’s South Africa done with its freedom?” With the 95-year-old father of the nation ailing, the 52-million South Africans who see him almost universally as a hero are also asking what lies ahead long after Madiba.To contribute towards a balanced narrative, Goldman Sachs has constructed a data rich, empirical analysis of how South Africa has changed in the past 20 years, revealing what South Africa still needs to tackle.When Nelson Mandela became president in 1994 he took over a state in crisis. South Africa had no foreign exchange reserves, double digit lending and inflation rates, a debt to GDP ratio of 50%, and 23% unemployment. Between 1980 and 1994 the economy grew at a real average rate of just 1.4%. Few believed that the previously-banned African National Congress (ANC) had the ability to manage Africa’s largest economy. Equally few people grasped just how bad the inheritance was. In April 1994, the South African economy literally had junk status.South Africa confounded apartheid apologists by enjoying a peace dividend from 1994 to 2007 with real GDP growth averaging 3.6% per annum, only slowing to 2.3% following the 2008 global financial crisis. By 2007 debt to GDP almost halved to 28%, and while now back at 42%, it still compares favourably to most developed markets.Post-1994, a “Golden Period”, the economy grew 2.5 times in size from $136-billion to just under $400-billion today. Inflation plummeted from an average of 14% in the 14 years to 1994 to an average of around 6.4% thereafter under the guidance of the Reserve Bank’s inflation targeting. South Africa now boasts a respectable $50-billion of gross gold and foreign exchange reserves. The tax net also grew, from 1.7-million taxpayers and $11-billion in receipts in 1994, to 13.7-million taxpayers and $81-billion in receipts in 2012. Notwithstanding a recent one notch downgrade, South Africa’s sovereign credit rating deservedly improved to investment grade today.Responsible macroeconomic stewardship has, generally, been accompanied by adherence to the rule of law, respect for the much admired South African Constitution, media freedom and strong independent institutions such as the Reserve Bank and judiciary.Perhaps the most striking successes since 1994 have been the creation of a growing and sizable African middle class, increased real wages for the employed, and the extension of social welfare and services to underprivileged communities. In the decade since 2000, the African middle class more than doubled in size. Real GDP per capita increased by 40% over this period, as 10-million South Africans, one out of five, graduated from lower to the middle and higher income bands.Welfare has been extended to 16-million people who receive monthly cash grants at an annual cost to the government of $10-billion. Disadvantaged households also receive far greater access to basic services such as sanitation, electricity and water. Collectively, these transfers provide a tangible “democracy dividend.”When economic isolation ended, trade patterns changed. While Europe remains its largest trading partner, China is rapidly catching up. The Johannesburg Stock Exchange (JSE) became the world’s 15th largest bourse, with a total market capitalisation twice that of local GDP, at around $800-billion and representing 80% of all African equity capital market flows. The corporate valuation gap between the JSE and developed markets closed, setting the stage for South African companies to compete globally for assets. The deeply liquid JSE is now the ideal investment hub for Africa.But major structural challenges remain.Click image for a larger view.South Africa is one of the most unequal societies in the world. By 2008, 85% of Africans were still in the impoverished or lower income categories receiving less than R1 400 per month compared to 87% of whites in the middle and upper income categories. Unemployment too has barely moved from the 23% inherited in 1994 to a post-apartheid average of 24.5%. With 70% of the unemployed under 34, the young are disproportionately affected.Job and export creating mining and manufacturing almost halved their share of GDP to 23% since 1986, while banking and real estate doubled to 24%. At 6.5% of GDP the current account deficit, is the highest among growth market peers while foreign direct investment (FDI) has averaged only $1.9-billion since 1994. The currency exchange rate acts as a “shock absorber.”With public service union membership rising, labour militancy is now as much an issue for government as it is for the private sector.Productivity in the private sector has not kept pace with wage inflation, while the public sector, despite increasing to 2-million employees, has seen its contribution to GDP fall from 19% in 1994 to 15% today. Despite increased budgets, health and education outputs lag emerging market peers on quality and effectiveness of spending when measuring life expectancy and quality of schooling. This is not sustainable. Productivity needs to outpace wage inflation.Since 1994, indebtedness (household debt to disposable income) has soared from 57% to 76%. 9.5-million South Africans have impaired credit records and as many as 10% may risk defaulting. This poses no systemic risk to the banking sector, but represents a potential source of instability.What needs to be done?Click image for a larger view.The government must reduce inequality, increase employment, especially amongst the youth and defend the gains made by the African middle class. It must improve public sector productivity, outputs and effectiveness.With sub-Saharan Africa GDP growing at over 5.5%, South Africa now lives in a “good neighbourhood.” But the anticipated tapering of quantitative easing means the time of easy money is over. South Africa must act fast to raise its game. It must build on its trade and linkages with African and Bric economies, stabilise and revive its job-creating mining and manufacturing sectors, drive technological innovation and research and development, and dramatically increase internet access, especially in schools.In the next 20 years South Africa should aim to raise its GDP annual growth rate from the past 20 years’ average of 3.3%, to 5% thereby growing the size of the economy to $1-trillion by around 2030. Such growth, if attained, would cut both the unemployment rate and debt/GDP % in half, and see GDP per capita double.To stave off its budget, and particularly its current account deficits, we believe net FDI should increase to an average closer to $5- to $10-billion per annum. This will require a more determined focus on improving the investment climate and creating a much more friendly regulatory, productivity and labour picture. To sustain fiscal expenditures, government must leverage state assets to “stretch” its resources.Finger-pointing in this still divided society will not help. A Team South Africa response by business, labour, government and civil society will. South Africa has the people, the talent, the institutions and the capital to do what needs to be done.Nelson Mandela’s dream depends on it.Colin Coleman is a Managing Director and Partner at Goldman Sachs.last_img read more

Ohio Ag Weather and Forecast October 1, 2019

first_imgShare Facebook Twitter Google + LinkedIn Pinterest No major change in this week’s weather, but next week are are having to go much wetter. It seems that we are actually pulling some moisture forward out of the extended 11-16 day period into next week. In any case, there is still plenty of opportunity for the outlook to change, but you will notice a lot more liquid in our forecast for next week. Here is our look this morning.We are mostly sunny and very warm again today and tomorrow. South winds keep temps well above normal, and we should be rain free each day. Now, clouds will increase tomorrow afternoon in far northern Ohio, and overnight tomorrow night we cant rule out a couple of scattered showers from US 20 north…but generally we have pretty limited moisture potential. WE return to dry, sunny weather for the balance of Thursday and Friday, but with cooler temperatures. We are partly sunny Saturday. So, for the rest of this week, we really have little to no threat of moisture over the majority of the state.Sunday changes that. Scattered showers develop through the day. Initially, the moisture looks pretty benign. Sunday moisture totals will be from a few hundredths to .25″ with 70% coverage. But, then Sunday night through Thursday morning we have significant rains circulating over the state. Combined rain totals will be from .5″ to 3″ and 100% coverage. This could provide for a significant interruption in harvest.10 day rain potentialThe extended 11-16 day period is a bit drier this morning. We see partly to mostly sunny skies for Friday the 11th through Sunday the 13th. Monday the 14th can bring a few scattered showers from US 30 northward, but nothing south. We cant rule out a shower or two with otherwise cloudy to partly sunny skies for Tuesday the 15th, but we are mostly sunny to finish the extended period on Wednesday the 16th.Temperatures remain normal to a bit above normal through the middle of October ,and we see no significant threat of frost at this time. The cooler temps late this week will be welcome, but not abnormal…remember, normals are falling off quickly this time of year…and we are getting spoiled with the kind of highs we are seeing today and tomorrow.last_img read more

TNT stays in playoff hunt, routs quarterfinals-bound NLEX

first_imgPussycat Dolls set for reunion tour after 10-year hiatus Don’t miss out on the latest news and information. LATEST STORIES John Lloyd Cruz a dashing guest at Vhong Navarro’s wedding Read Next Police teams find crossbows, bows in HK university PLAY LIST 01:29Police teams find crossbows, bows in HK university01:35Panelo suggests discounted SEA Games tickets for students02:49Robredo: True leaders perform well despite having ‘uninspiring’ boss02:42PH underwater hockey team aims to make waves in SEA Games01:44Philippines marks anniversary of massacre with calls for justice01:19Fire erupts in Barangay Tatalon in Quezon City Brace for potentially devastating typhoon approaching PH – NDRRMC LOOK: Iya Villania meets ‘Jumanji: The Next Level’ cast in Mexico FEU ends NU’s streak, gets share of second spot Google honors food scientist, banana ketchup inventor and war hero Maria Orosacenter_img “We’ve been struggling offensive this conference and that’s no secret,” said TNT head coach Nash Racela, whose squad led by as much 38, 59-3, early in the third quarter. “I think the two-week break really helped us.”“Today, at least offensively we looked a lot better than in our previous games. We needed a win for us to give ourselves a chance in the playoffs and the only thing we can control is this game,” Racela added.FEATURED STORIESSPORTSWATCH: Drones light up sky in final leg of SEA Games torch runSPORTSLillard, Anthony lead Blazers over ThunderSPORTSMalditas save PH from shutoutNewly-acquired guard Jericho Cruz was one of the big reasons for the KaTropa’s improved offense.Cruz fired a team-high 17 points and had three rebounds, four assists and two steals in his debut TNT. Kelly Williams also had 17 points on top of 16 rebounds and three steals. PBA IMAGESTNT staved off elimination after crushing NLEX, 101-75, in the 2018 PBA Philippine Cup Wednesday at Mall of Asia Arena.Despite the blowout win, the KaTropa’s playoff status remains up in the air with their fate of making the quarterfinals already out of their control.ADVERTISEMENT Families in US enclave in north Mexico hold sad Thanksgiving MOST READ The Road Warriors, who came into the game already assured of a spot in the quarterfinals slot, scored the game’s first four points, but the KaTropa took it from there.TNT outscored NLEX, 31-12, in the second quarter to take a 58-28 advantage heading into the second half.JR Quiñahan scored a game-hgh 20 points while Kevin Alas added 14 for the Road Warriors (6-5).RELATED VIDEOADVERTISEMENT Typhoon Kammuri accelerates, gains strength en route to PH AFP official booed out of forum View commentslast_img read more