The Rise and Fall of the South African Economy: A 60-Year Retrospective…

The economy of South Africa has experienced a tumultuous journey over the past six decades, shifting from a position of promise and potential to one marked by frustration and stagnation. To understand the current economic landscape, it is essential to explore the dynamics of the South African economy before and after the end of apartheid in 1994, analyzing the decisions made by both the apartheid and democratic regimes that have shaped the nation’s economic fortunes.

The Economy Before Democracy: 1964 to 1994

In the three decades leading up to the end of apartheid, South Africa's economy was characterized by significant growth, driven primarily by the mining sector and industrialization. The country was considered an economic powerhouse on the African continent, with a GDP that consistently outpaced many of its neighbors. However, this growth came at a significant cost. The apartheid regime implemented oppressive policies that systematically marginalized the black majority, restricting their access to quality education, employment opportunities, and economic resources.

As the regime began to sense its waning control, it attempted to bolster the economy through initiatives aimed at preserving white privilege and maintaining power. This included the strategic manipulation of markets and the establishment of monopolies that benefited a select few while further entrenching inequality. Contrary to popular belief that this policy was a brainchild of the ANC led democratic government, in fact it was the Apartheid regime government that introduced policies such as the “Willing Seller, Willing Buyer” framework, which allowed landowners to sell property at inflated prices, effectively disenfranchising black South Africans and hindering their economic progress. This was done to usher in the new dispensation that saw the black elite connected to politicians being paraded as overnight success stories meant to convince the populace that indeed change had come.

The Transition to Democracy: 1994 Onwards

With the advent of democracy in 1994, hopes were high for a new economic dawn. The African National Congress (ANC), led by Nelson Mandela, promised to dismantle the legacy of apartheid and create a more equitable society. However, the transition did not yield the expected economic transformation. The new regime inherited an economy plagued by structural inequalities, high unemployment rates, and a lack of investment in critical sectors.

In an effort to address these disparities, the government implemented policies such as Black Economic Empowerment (BEE), which aimed to promote the economic participation of historically disadvantaged communities. While the intentions were noble, the execution often led to unintended consequences. Critics like me argue that BEE created opportunities for a small elite while failing to uplift the broader population. Moreover, the focus on demographic representation sometimes overshadowed the need for genuine economic growth and job creation.

This policy was the brainchild of the Apartheid regime to brainwash the poor majority black into believing that democracy was working in their favour, and this is what produced overnight success stories and gave birth to fictional millionaires and billionaires such as Patrice Motsepe, Cyril Ramaphosa, Tokyo Sexwale, Trevor Manuel, Saki Macozoma, Precious Moloi-Motsepe, Bridgette Radebe, Zanele Mbeki, Judy Dlamini, etc. joining their colonial and apartheid regime made billionaires Johann Rupert, Nikki Oppenheimer, Koos Bekker, Christoffel Wiese, Michaiel le Roux, Wendy Appelbaum, Wendy Ackerman, Irene Charnley, Gail Kelly, Elizabeth Bradley, etc.

The Role of Corruption and Collusion

As the years progressed, the intertwining of apartheid-era politicians and their democratic counterparts became increasingly apparent. Corruption and collusion within political ranks and big business eroded the integrity of the economy. Numerous reports from the Auditor General, the Public Protector, the Competition Commission and the many expose cases as seen during the countless commissions of enquiries and parliamentary ad hoc committees have exposed systemic failures, including the manipulation of tenders, illicit financial flows, and the establishment of monopolies that stifled competition, not forgetting criminal cartels that have infiltrated government thereby seriously compromising the safety and security of the nation and the sovereignty of the Country

The abuse and mismanagement of State-Owned Enterprises (SOEs) provide a stark illustration of this decay. Companies such as South African Airways (SAA), Eskom, and Transnet have faced significant challenges due to corruption and mismanagement. For instance, SAA has been plagued by financial losses and corruption scandals, leading to government bailouts that have drained public resources.

Eskom, once a symbol of power generation in Africa, has been crippled by mismanagement, widespread corruption, and failing infrastructure, resulting in rolling blackouts that have severely impacted the economy. This was done deliberately by the corrupt lot who were busy positioning their renewable energy businesses and aligned them to supply renewable energy to Eskom, thereby unfairly siphoned billions of Rands from Eskom as we see it happening today.

Similarly, the arms manufacturer Denel and the rail service provider PRASA have suffered from financial mismanagement and corruption, leading to operational inefficiencies and loss of public trust. The South African Broadcasting Corporation (SABC) has faced significant scrutiny over its governance, with allegations of political interference and financial mismanagement hampering its ability to serve the public effectively. These examples highlight how SOEs, which should serve as engines of growth and development, have been systematically undermined, contributing to the broader economic malaise.

The state capture phenomenon, from the Mandela to Mbeki, from Mbeki to Motlanthe, from Motlanthe to Zuma, and from Zuma to Ramaphosa, saw a horrific culture of corruption with impunity in which significant public funds were diverted for personal gain. Investigations uncovered and continue to unearth how political leaders colluded with private enterprises and criminal syndicates to orchestrate corrupt contracts, resulting in billions of Rands being siphoned out of the economy. This corruption not only damaged public trust but also hindered economic growth, as resources that could have been invested in infrastructure and job creation were instead wasted.

The Current Economic Landscape

Today, the South African economy stands at a crossroads. High unemployment rates, rising inequality, and persistent corruption have left many citizens disillusioned and hurt. The once-thriving industrial sector has seen a decline with many consistent closures of multinational corporations, and the mining industry, once a cornerstone of the economy, faces challenges from fluctuating global prices to regulatory uncertainty, not forgetting the unforgettable illegal mining phenomenon as recently experienced across the country.

Additionally, the COVID-19 pandemic exacerbated existing vulnerabilities, pushing the economy further into recession. The government’s attempts to stimulate growth through various economic recovery plans have been hampered by ongoing corruption scandals and a lack of coherent policy direction. Many times, what has been presented to the South Africans as solutions, turned out to be well thought falsified projects used to officiate crime and corruption by the corrupt lot as we have been experiencing over the past three decades. The current looting of the Tembisa Hospital saga is just but one of the most recent example.

The Legal Framework and Economic Inequality

Furthermore, we all know for a fact that the legal system of South Africa is dangerously compromised and captured by the criminal elite. There are many cases that supports this notion with findings at all levels of our courts. Some officials including judges, magistrates, prosecutors and lawyers are behind bars for having being found on the wrong side of the law, and some have been charged, found guilty and removed completely from the legal system. As if this was not enough, we sadly continue to see many more officials being exposed via current investigations during commissions of enquiries and parliamentary ad hoc committees, etc.

Sadly, there’s overwhelming evidence proving how our legal system has often been used to uphold the status quo established during apartheid, ensuring that economic disparities between the haves and the have not continue to widen. Laws and regulations that favor established businesses and protect monopolistic practices have perpetuated a cycle of inequality, where the rich continue to benefit at the expense of the marginalized.

This systemic issue has made it increasingly difficult for small businesses and emerging entrepreneurs, particularly from historically disadvantaged backgrounds, to compete and thrive. This systematic structure was deliberately designed and everything is continuously done to maintain colonial and apartheid systems at the expense of the majority indigenous black people of South Africa and by extension, the indigenous black people of Africa, to the benefit of a privileged minority foreign whites.

A Clarion Call for Renewal, An Opportunity to Invent a New and Relevant Economic Model

The journey of the South African economy over the past 60 years serves as a cautionary tale of how political manipulation and self-serving interests can derail a nation’s potential. This history is not merely a chronicle of economic decline but a profound lesson on the consequences of allowing greed and corruption to infiltrate the fabric of governance. The intertwining of apartheid-era politicians with their democratic successors has fostered an environment where personal gain often supersedes the collective good, leading to a fractured economy marked by inequality, unemployment, and disillusionment.

As South Africa stands at a crucial crossroads, the path forward requires more than just acknowledgment of past mistakes; it necessitates a bold commitment to accountability and transparency from those in power. Citizens must demand a new standard of leadership—one that prioritizes the well-being of the nation over individual ambition. This is not just a call to action but a rallying cry for a movement that seeks to reclaim the integrity of governance and restore faith in public institutions.

In rebuilding the economy, we must embrace genuine reforms that addresses the systemic issues that have plagued South Africa for decades. This requires a radical shift in our approach to economic policy, moving away from practices that benefit a select few towards inclusive growth that empowers all South Africans. We must foster an environment where entrepreneurship thrives, where small and medium enterprises are supported and nurtured, and where innovation is encouraged. By investing in education and skills development, we can equip our future generations to participate meaningfully in the economy, breaking the cycle of poverty and disenfranchisement.

Moreover, ethical governance must become the cornerstone of our political landscape. Leaders must be held accountable for their actions, with stringent measures in place to combat corruption and ensure that public resources are used for the collective good. The establishment of independent oversight institutions, coupled with active citizen participation in governance processes, will be essential in creating a transparent political environment that serves the interests of the people.

This moment presents an extraordinary opportunity to rethink and reinvent South Africa’s economic model. We have the chance to forge a new path—one that is rooted in sustainability, equity, and resilience. By prioritizing social justice and environmental stewardship, we can create an economy that not only drives growth but also promotes the well-being of all its citizens. This new economic paradigm must recognize the interconnectedness of social and economic issues, ensuring that no one is left behind as we strive for progress.

Only through collective action and a shared vision can South Africa hope to rise from its current challenges and reclaim its status as a leader on the African continent. Every citizen, from business leaders to community organizers, has a role to play in this transformative journey. It is time to unite under a common purpose, to advocate for policies that reflect our values, and to build an inclusive economy that honors the sacrifices of those who came before us.

As we look to the future, let us not only be driven by hope and determination, but by our focuses actions whilst recognizing that the power to shape our destiny lies within us. Together, we can create a South Africa that is not only economically prosperous but also just and equitable—a nation that truly reflects the richness of its diversity and the strength of its people. This is our moment to rise; This is our moment to renew; and This is most certainly our moment to invent an economic model that serves all South Africans, ensuring that the promise of a better tomorrow becomes a reality for generations to come.