South Africa�s and Botswana�s performance and outlook
Correspondent | Friday October 2, 2015 12:19
This was in recognition of South Africa’s economic potential and its position as a powerhouse in Africa. Botswana, in comparison, is a much smaller country in almost every respect.
However, South Africa has been a major disappointment to many observers who are interested in the rising star’s slow but questionable rise since the end of apartheid more than two decades ago. Nelson Mandela brought a lot of hope and promise to the nation as its first post-apartheid President. However, unfulfilled dreams of economic prosperity, failed attempts at ushering in equality (social, economic and political) in a racially divided and culturally bruised admixture of civilisations; and, fundamental failures in almost every key aspect of economy, society and politics are undoing the country’s hopes for a better future for its citizens. Democracy is faltering as well through corruption and strong-arm tactics by the current government, including suppressing certain basic tenets of democracy – a free press, accountability mechanisms, and
oversight bodies, for example. Economic growth in South Africa has also faltered and the future doesn’t look bright in view of the current slowdown in China in particular. Botswana’s economic performance meanwhile has slowed significantly but it is still “respectable” at between 4% - 5% for 2014 -2016. The World Bank’s Global Economic Prospects report (2015) and other sources speak volumes with respect to the past, current and short-term future of these countries, as encapsulated in the table below on economic growth.
Another critical economic indicator is that on inequality. Mainstream economists revere the Gini coefficient as a measure of inequality in a nation. And South Africa, with a Gini index of 63.1, has one of the most unequal societies in the world. Unfortunately, Botswana doesn’t fare well either with almost an identical Gini index. Other countries are included below for the sake of comparison.
Gini index for selected countries
In South Africa, economic inequality has not been successfully tackled – even ignored, one might say – in the post-apartheid era. As a result, regretfully, it has increased according to available figures, from 54.0 in 1993 to 63.1 by 2010. For further insight into inequality per se, see my Linkedin publication entitled “The Many Shades of Inequality: A Critical Perspective”, dated 16 August 2015.
Meanwhile, unemployment in South Africa remains very high at 25 per cent of the work force; and the forecast for the next four years is for it to remain roughly the same level. As inequality and unemployment are closely linked, I direct the reader to a related paper that focuses on South Africa: see “Poverty, Inequality and Unemployment in South Africa” (published in Economic Papers, Vol. 30, No. 1: pp. 307-315) that my co-author Professor John Luiz (of the University of Cape Town) and I wrote in 2011.
In comparison, based on figures from the Botswana Central Statistics Office, IEconomics, and my own estimates, Botswana’s unemployment rate for the 2010 – 2019 period will average roughly 20 per cent annually (+ or – 1 per cent).
With respect to politics, the landscape in South Africa is bleak for the next four years. According to The Economist (June 27th, 2015: p. 40), Jacob Zuma, the President, and the African National Congress (ANC), have set the clock back to the late apartheid period (to use hyperbole) by curbing free speech and freedom of press.
In particular, The Economist, in an earlier article (February 7th, 2015: p. 45), notes that: “Under attack are some of the most efficient and respected bits of the state: its justice system, its revenue service and the office of the public protector … (and) … allegations of corruption are being levelled against Zuma himself.
‘The one-man wrecking ball’, as a leading commentator, Max du Preez, described him, might yet survive – after all, his Presidency has at least four more years to run unless the ANC decides to ‘recall’ him – as it did Mbeki”. In short, South Africa’s institutions of democracy are not only fragile but they are being sorely tested.
In comparison, the political situation in Botswana is relatively stable. Also, unlike South Africa, Botswana has in general a fairly homogenous society and it does not have an apartheid legacy. Meanwhile, South African society remains divided and on separate paths.
Whether one looks at South Africa in economic, political or social terms, the current situation does not bode well for the future of South Africa, at least for the next four to five years. Botswana’s problems, in comparison, are largely economic, underlying the need for diversification of the economy, strengthening and expanding infrastructure (roads/highways, water supply, power generation). And while there are no easy solutions, progress is nevertheless possible through effective policies and strategies, a genuine commitment to decrease unemployment levels and the high levels of inequality, and by tackling related structural weaknesses. This is a “tall order” but the tasks appear to be relatively easier for Botswana to accomplish under good leadership.
*Michael Chibba “wears many hats”: he is a freelance writer, public speaker, guest columnist, international business & development management guru, economist/social scientist, teacher/lecturer/professor, and corruption and inequality expert. He is also the former Managing Director, Distinguished Fellow & Adjunct Professor of ICDEPR, Canada. Since the late1970s, he has done professional and managerial work in over 30 countries around the world, including Botswana and South Africa.
Michael Chibba