The state is delusional and dishonest about SA’s economic growth
The Treasury’s plan for faster economic growth is idiotic; no businessperson believes that fiddling at the edges will solve SA’s primary problems
Everyone seems to agree that avoiding a severe fiscal crisis will be impossible without faster economic growth. Currently 78.7% of the government’s primary borrowing requirement is used to pay interest on previous borrowings. Within 10 years, the overall government debt-to-GDP ratio will be 80.9%. To reverse course, private-sector economic growth needs to average a highly improbable 5.3% per annum for at least a decade.
The government has no idea where economic growth originates. In its recent medium-term budget policy statement (MTBPS), the Treasury pointed out that economic growth has fallen in almost every fiscal year between 2007 (5.9% per annum) and 2019 (0.5% per annum). Yet, even as growth has dwindled, the Treasury has forecast an abrupt resumption and lasting acceleration of economic growth in every budget over the period...
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