THE sprawl of cranes around Sandton, South Africa’s swanky financial district, and a dearth of empty beds in Cape Town, its tourist Mecca, point to an economy that shows some signs of rebounding from a deep slump earlier this year. Taken individually many indicators are buoyant: good rains mean that farmers are likely to plant 35% more maize this year; a weak rand has encouraged a 20% jump in the number of international tourists.
Yet add these numbers up and the equation still turns out badly: the economy will be lucky to limp in with growth about 0.5% this year and will not do very much more than 1.5-2% over the next few years. This is a percentage point or two below the long-run trend rate of 3%.
So what explains this black hole in the economy? The answer is almost entirely poor governance by Jacob Zuma, a president who may soon face 783 charges of fraud, corruption and racketeering.
Foolish policies play a part. Take tourism. Although the number of holiday-makers has soared, the government itself reckons that there ought to have been many more bottoms on South African beaches. Thousands have been turned away by...Continue reading
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