At its core, it is a beautiful, cheerful, and welcoming country. There’s hardly a dull day ever in a country mightily respected for being the ‘Rainbow Nation’.
If there’s a living proof that today men belonging to different caste, color, creed, and ethnicities can co-exist peacefully, then look no further than South Africa.
In fact, to understand the seriousness of South Africa’s economic challenges today, it makes sense to remind oneself of a famous quote by none other than Richard Branson, who had once famously said, “to stand still today is to go backward!”
So is the situation confronting South Africa’s economy so serious that one fears the country might stroll backward? What exactly is happening in the rainbow nation?
Go no more than a week back and see for yourself. Two of the biggest companies operating in South Africa- ArcelorMittal and Eskom reported that they are struggling for growth and are, in fact, going backward. Thus far, they have enjoyed an almost monopolistic standing in the Protean economy.
The fact that the two organizations are vastly pertinent and relevant to what South Africa does or is about can be understood by a simple, unwavering situation that corresponds to their relative importance.
Without electricity (Eskom), one just cannot function today and without it, one also cannot manufacture steel. Similarly, without steel today, one cannot sufficiently cater to several industries and infrastructure development.
So if these two companies continue to be saddled by declining growth, won’t South Africa’s economy (also) not waltz backward?
How poorly has Eskom been operating in South Africa can be understood by the desperately overcharged prices it desires of its customers. Back in the day, Eskom demanded a paltry 17.01 per kilowatt-hour. But back then, it was considered a world leader in terms of production of cheap and reliable electricity. Today, the same company charges around 90 cent per kilowatt-hour from the same set of consumers.
A local South Africa-based publication called the firm a debt nuclear bomb. Its outstanding debt is around R441 billion. Similarly, fate has changed sourly for ArcelorMittal, which announced that the demands have fallen back to the 2008-levels.
What’s hurting South Africa’s economy today, more than ever, is that unlike the bygone days, there’s hardly any deadline in infrastructure spending. No directions either. The economy seems to be drifting around aimlessly, instead of working toward a collective goal, something that can reflect a common purpose, urgency, and leadership.
Moreover, the political establishment led by Cyril Ramaphosa seems to be spending its precious time at stopping the political control being lost to the hands of the determined ANC, that will stop at nothing to snatch the political control over a country mightily respected by the neighboring nations and those in the wider world.
Therefore, it is for reasons such as this that the economists are saying that the economy has been held to ransom.