GROWTH PROSPECTS DWINDLES IN SOUTH AFRICA

Economic growth in South Africa looks set to remain behind the rate of population growth for four years ending in 2018, ensuring that more people will be poor. As things stand 40 percent of South Africans are chronically poor and a further 40 percent are what economists call the temporally poor, sometimes getting their heads above water only to sink again as seasonal or part-time jobs dry up. That means only one in five South Africans are completely untouched by poverty.

According to today’s Johannesburg-based financial paper BusinessDay, the World Bank has halved its growth outlook for South Africa and has flagged diminishing productivity as the major threat to growth. In its latest economic update published yesterday, the World Bank revised growth prospects down to 0.6 percent for 2017. In January, the same organisation forecast that Gross Domestic Product would grow by 1.1 percent.

Growth has been hampered by lost productivity. Private investment in research and development has declined 40 percent in South Africa since 2008.

There has been almost no export diversification over the last seven years, reflecting the country’s inability to break into new markets with innovation. Only seven percent of South African exports are high-tech.