SOUTH African President Cyril Ramaphosa’s claims about South Africa’s economic growth during his 2024 State of the Nation Address (SONA) hid the truth about how badly the country is really performing.
In his address, Ramaphosa said they have worked hard to undo the damage caused during state capture under former President Jacob Zuma.
He said the real tragedy of state capture was that it diverted attention and resources from growing the economy and creating jobs.
“Over the past five years, we have worked to revive our economy from a decade of stagnation and protect it from domestic and global shocks,” Ramaphosa said.
“We have made progress. Our economy is today three times larger than it was 30 years ago.”
At face value, growing the economy by 300% sounds impressive and creates the impression that the government has done good work.
However, anyone with a basic understanding of economics realises that Ramaphosa employed an elementary political trick to make a dismal situation look better.
Instead of using a standard economic measure, like the average annual GDP growth, he used an absolute figure. An absolute figure can make most things sound great.
For example, in the 30 years before the ANC took the reins, South Africa’s economy grew by 1,357% in US$ terms. It is five times higher than the next 30 years under ANC rule.
The latest World Bank gross domestic product (GDP) data for South Africa and Zimbabwe further shows why his claim is misleading.
– Between 1993 and 2022, South Africa’s GDP in US$ terms increased by 275%.
– Between 1993 and 2022, Zimbabwe’s GDP in US$ terms increased by 417%.