Zimbabwe’s
economy
has
more
than
tripled
in
size
in
US
dollar
terms
over
the
past
15
years,
while
South
Africa’s
has
largely
stagnated.
While
Zimbabwe’s
growth
is
off
a
much
lower
base,
it
came
despite
the
country
being
considered
an
economic
basket
case
after
decades
of
hyperinflation,
poor
government
policies,
and
a
controversial
land
reform
programme.
South
Africa,
the
largest
and
most
developed
economy
in
Africa,
has
stagnated
over
the
past
15
years
due
to
widespread
corruption,
load-shedding,
inefficient
logistics,
and
an
increasingly
onerous
regulatory
environment.
This
lacklustre
performance
has
been
celebrated
by
the
country’s
leaders,
with
President
Cyril
Ramaphosa
using
the
30th
anniversary
of
South
Africa’s
first
democratic
elections
to
laud
the
ANC’s
efforts
to
grow
the
economy.
Ramaphosa
said
the
ANC
has
ensured
the
economy
has
tripled
in
size
since
1994,
with
this
prosperity
felt
by
a
growing
share
of
the
population.
“Although
there
have
been
setbacks,
although
we
have
faced
challenges
both
beyond
our
borders
and
at
home,
our
economy
has
tripled
in
size
since
1994,”
he
said.
He
emphasised
that
this
has
led
to
job
creation
for
millions
of
South
Africans,
with
employment
increasing
from
8
million
in
1994
to
over
16.7
million
today.
There
was
no
mention
of
the
surge
in
unemployment
over
the
same
period,
as
South
Africa’s
economy
did
not
grow
fast
enough
to
absorb
a
growing
labour
force.
Ramaphosa
has
emphasised
the
ANC’s
accomplishments
in
recent
years,
saying
it
has
been
working
hard
to
overcome
a
decade
of
economic
stagnation.
“Over
the
past
five
years,
we
have
worked
to
revive
our
economy
from
a
decade
of
stagnation
and
protect
it
from
domestic
and
global
shocks,”
Ramaphosa
said.
“We
have
made
progress.
Our
economy
is
today
three
times
larger
than
it
was
30
years
ago.”
However,
when
comparing
South
Africa’s
economic
growth
rate
with
its
African
peers,
the
country’s
performance
becomes
far
less
impressive.
In
2010,
South
Africa’s
GDP
was
$417.36
billion
according
to
the World
Bank.
By
the
end
of
2024,
the
country’s
economy
was
smaller
at
$401.14
billion.
This
marks
a decline
of
3.89%.
From
these
figures,
it
appears
as
though
South
Africa’s
decade
of
stagnation
has
extended
into
15
years
of
flat
economic
growth.
In
contrast,
over
the
same
period,
Zimbabwe’s
economy
has
more
than
tripled
from
$12.05
billion
to
$41.54
billion.
This
signifies growth
of
over
244%.
This
is
despite
the
country
being
considered
an
economic
basket
case
after
it
entered
a
decades-long
downward
economic
spiral
in
2000,
following
the
government’s
controversial
land
reform
programme.
Zimbabwe’s
expropriation
of
white-owned
farms
was
followed
by
involvement
in
a
war
in
the
Democratic
Republic
of
Congo.
This
collapsed
the
state’s
finances
and
led
to
international
sanctions
against
the
country.
Inflation
skyrocketed,
reaching
a
peak
of
231
million
per
cent
in
2008,
rendering
the
Zimbabwean
dollar
essentially
worthless.
Basic
necessities
became
scarce,
leading
to
widespread
poverty
and
hunger.
This
economic
meltdown
continues
to
cast
a
long
shadow
over
Zimbabwe’s
present
and
future.
Despite
this,
the
Zimbabwean
economy
has
grown
much
more
strongly
than
South
Africa’s
over
the
past
15
years,
indicating
how
poorly
the
local
economy
has
performed.
South
Africa’s
economic
stagnation
There
are
many
reasons
why
South
Africa’s
economy
has
stagnated
over
the
past
15
years,
with
the
main
contributors
being
widespread
corruption,
load-shedding,
deteriorating
infrastructure,
and
inefficient
ports
and
railways.
More
recently,
this
has
culminated
in
private
businesses
losing
confidence
in
the
local
economy,
leading
to
declining
fixed
investment.
This
type
of
investment
is
key
to
sustained
economic
growth
over
the
long
run,
as
it
improves
the
workforce’s
productivity.
Fixed
investment
refers
to
capital
used
to
purchase
land,
equipment,
machinery,
and
build
infrastructure,
as
opposed
to
financial
assets
and
consumption.
South
Africa’s
fixed
investment,
typically
measured
as
gross
fixed
capital
formation,
has
declined
from
around
30%
in
the
1970s
to
15%
today.
This
has
translated
into
poor
economic
growth,
with
fixed
investment
hovering
around
15%
for
the
past
15
years
after
the
boom
that
preceded
the
2010
FIFA
World
Cup.
Investec
Wealth
&
Investment
International
investment
strategist
Osagyefo
Mazwai
pointed
to
this
as
the
main
reason
the
country’s
economic
growth
has
lagged
that
of
its
peers.
Had
South
Africa
merely
maintained
the
emerging
market
average
of
4.5%
since
2010,
its
economy
would
be
around
R4.1
trillion
larger.
However,
while
South
Africa’s
emerging-market
peers
have
fixed
investment
rates
of
around
25%
of
GDP,
its
share
is
only
15%.
“Our
fundamental
proposition
is
that
South
Africa
needs
to
get
back
to
business,
and
by
that,
we
mean
get
back
to
the
basics
of
business
confidence,”
Mazwai
said.
He
explained
that
the
cheapest
form
of
economic
stimulus
is
the
restoration
of
confidence,
as
that
directly
translates
into
increased
investment
and
job
creation.
This
has
been
the
case
in
South
Africa’s
past,
with
a
high
correlation
between
business
confidence
and
various
economic
indicators
since
1994.
Mazwai
explained
that
this
is
not
a
one-way
street,
as
business
confidence
is
both
a
driver
and
a
result
of
GDP
growth.
Improved
confidence
and
growth
create
a
powerful
feedback
loop.
“The
key
is
that
business
confidence
should
be
the
main
focus
of
the
current
government
when
solving
for
economic
and
employment
growth,
in
turn
solving
for
the
poverty,
unemployment
and
inequality
problem
in
South
Africa,”
Mazwai
said.
The
direct
impact
of
this
is
that
South
Africa’s
fixed
investment
rate
in
comparison
is
much
lower
than
its
peers.
This
can
be
seen
in
the
graph
below,
courtesy
of
Melville
Douglas.
that
“PDP”
in
the
graph
above
should
be
“GDP”