South Africa is failing to achieve growth and inclusion

According to a report by The Growth Lab at Harvard University, jobs are scarce and South Africa’s economic potential remains unrealized.

The national economy has experienced slow and highly vulnerable growth. Inequality is the highest in the world, and structures of exclusion remain embedded in South African society both within and across racial groups and geographies.

Black South Africans continue to face poverty and joblessness at very high rates, and overall wealth, although racially more balanced, remains as concentrated in a narrow few as it was at the end of apartheid.

Though government policies have worked to dismantle many structures of the apartheid state and increase living standards, these efforts have not translated into the creation of job opportunities for too many South Africans.

Despite immense effort aimed at socio-economic transformation, including policies of broad-based black economic empowerment, inclusion has been very limited in practice.

When South Africans threw off the structures of apartheid three decades ago, the nation captivated the world. The early 1990s marked a victory for generations of freedom fighters, and the future of an inclusive South Africa was set in motion.

There was no telling what could be accomplished with the full force of South Africa’s human capabilities, creativity, and resilience in combination with its industrialized economy and established comparative advantages in global trade.

There was good reason to be hopeful as the Presidency of Nelson Mandela ushered in an active period of reconciliation. By including all South Africans in the functioning of society and the economy, the Rainbow Nation seemed poised to leverage its substantial economic assets at full strength.

In 1995, South Africa supported the 47th most complex economy in the world — on par with China (ranked 46th) and far ahead of any other African nation (Tunisia was next at 66th).

There was good reason to believe that the economy would grow rapidly, and opportunity would expand to many more South Africans.

Read the full report by The Growth Lab here.