The long shadow of state capture
SA’s underlying productivity problem predates the Covid pandemic and has its roots in the state capture era. Until this is addressed, the country’s recovery will remain hostage to the ghosts of its past
With global growth poised for takeoff and SA finally gearing up for its vaccine rollout, attention is turning to the likely shape of SA’s economic recovery. Unfortunately, after an initial post-Covid bounce the Reserve Bank expects SA’s potential growth rate to fall back below 1% as the constraints that existed before the pandemic come back to haunt the country.
In its biannual Monetary Policy Review (MPR), released last week, the Bank warns that despite growth likely rebounding to 3.8% this year (mainly on statistical base effects) it will take until 2023 for the economy to recover to pre-Covid output levels...