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.