South Africa’s failure to keep pace with its emerging-market peers in sustaining annual growth of 4.5% since 2010 has left the economy 37% smaller than it would have been, according to a new report.
Bloomberg reports that a study by Investec Wealth & Investment International finds that matching those expansion rates would have lifted the country’s nominal gross domestic product to almost R12 trillion rand last year, from R7.5 billion rand.
The Investec report says inertia caused by power outages, crime, disintegrating infrastructure and foreign-policy missteps dragged growth down to an average of about 1% a year over the past 15 years.
Bloomberg quotes Osagyefo Mazwai, investment strategist at Investec Wealth & Investment International, as saying in the report: “The cumulative figure of revenue forgone is scary.
“That is material, considering the fiscal constraints facing South Africa and demonstrates the need to ensure economic growth to boost the fiscal war chest and further enable the capacity of the state to deliver services.”