South Africa posted a 2019 Q1 GDP growth decline of minus 3,2%.
Economic apologists tout this as the worst performance in 10 years. Worse! Back up 33 years to find self-inflicted stupidity of this magnitude. In the Court of Economic History, President Rhamaphosa and Finance Minister Mboweni stand in the dock alongside PW Botha and Barend Du Plessis as the worst economic executives to have held office. Go back 190 years to Lord Charles Somerset and Sir Harry Smith to find comparable incompetence.
Breathtaking - minus 3,2%.
A small number, yet considered, the enormity of the R300 Bn GDP gap, comes sharply into focus. Next - 300,000 pink slips, as actual jobs or bright young #feesmustfall graduates, that don't move out of University digs into a company apartment, but stay at home, sharing a room with baby Katlego and the twins. Revised career prospects are now poker games, soccer pools, traditional weddings.
The 2008 implosion of world markets and the 1992 dying Apartheid regime cranking interest rates to 24% are acts of desperation. Go back to The Rubicon Speech of 1986 or the 1976 Soweto Riots - 33 years to match 2019 Q1 made spectacular that it happened while the rest of the world marched onto maximum growth, stock market highs and full employment.
EWC - Expropriation Without Compensation
In the boozy gloom of 2018, Rhamaphosa meets his election advisory team. The inspiration flash is putting EWC at the forefront of the election campaign, the ANC heads off the EFF Land challenge. After the election, back to business, forget the promises, not a peep about EWC.
EWC worked! Who can forget the old woman in Erkhuleni visited by a campaigning President bursting into tears of joy as he explained on National television how her ANC vote would get her a plot of Land, a bond to build a house and security for an R150,000 overdraft to start the business she has always been denied. A big jump from a lifetime of poverty. In Africa - that promise is a vote in the bag.
There is however a cost side.
Decrying EWC is deemed, counter-revolutionary. The pungent argument that EWC is merely a ploy with no real Land Reform, is dismissed. The joy gushes from the left as they watch spooked Landowners, fret about losing their career savings. A political triumph!In Africa, the rich not only dominate the economy. They ARE the economy. When they tank, we all tank.Investors disappear like virgins at a matric dance. Property buyers scatter like rats up a drainpipe. Bank managers cut bonuses, cancel vacations, call in loans. Last year's pestering call center agents offering overdrafts? Retrenched or moved to collections. Standard Bank closes 100 Branches.The Q1 GDP figure is the first bill, court summons and blacklisting judgment still coming - GDP implosion with multipliers.Land reform, more urgent than ever, is now at what cost? The ANC election campaign cost R 300 Bn! R30,000 a vote exceeds even the per guest budget of the Gupta wedding. R300 Bn is more than double (nay triple) the total amount spent on Land restitution since 1994!
Not even a single farm took yet.
Land Reform - where South Africa loses capital - offers nothing. Say “Expropriation Without Compensation” to a Landowner. It matters not what follows, she is already checking European Bond rates online, not shopping, opening a new factory or employing more staff. Plain to see – GDP growth minus 3.8%.
South Africa, it is time for a serious rethink on where EWC is going.