South Africa’s macroeconomic risks after a decade of microeconomic turbulence

  • Led by long-time friend of CDE, Professor Ricardo Hausmann, a team of development economists from Harvard University’s Kennedy School of Government recently published an analysis of the reasons for South Africa’s poor economic performance over the past 15 years.
  • The report, published in January 2022 as a UNU Wider working paper, makes for sobering reading.
  • SA’s economic performance after 2008 was substantially weaker than before that date and was also substantially weaker than peer-group countries.
  • A key driver of the collapse in growth has been the collapse in output and productivity in key state-owned companies, especially Eskom.
  • Heightened political uncertainty also accounts for a significant portion of the growth collapse.
  • SA’s poor growth performance is not a result of a turn to “austerity” or because of the end of the commodity “super-cycle”.
  • Macroeconomic policy has been too slow to adapt to slowing growth, resulting in a very rapid build-up in debt.

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