Work is needed to improve our economy

South Africa is envisaged to improve its economic performance in the next decade but experience a worsening unemployment rate by 2035. A future characterised by food shortages, leading to soaring prices, hunger and malnutrition, is predicted in one scenario produced by Indlulamithi Scenarios project.

The project was launched in July 2018 to imagine South Africa in 2030.

The research that produced various scenarios is a collaborative and creative venture, involving a range of stakeholders and social scientists who believe it could help shape South Africa’s future over the next decade.

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The work includes conducting interviews and focus groups, and coding and analysing qualitative data. Since 2019 the Indlulamithi Barometer was launched to gauge development around the various performances, and its latest report was released yesterday.

It said a lot of work would have to be done to prevent SA going into the worst-case scenario.

The precarious environment of the last five years has put everybody under strain and the situation would be the Achille’s Heel to recovery which would be slow and difficult.

However, there is light at the end of the tunnel when it comes to slight improvements in economic, political and environmental performances towards 2040.

In a future characterised by food shortages predicted, inflation could outpace wage growth, making South Africans 25% poorer in 2035 compared to 2020.

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Contributing factors

The report noted that among contributing factors to economic strain in the last half-a-decade were the implementation of self-serving laws and policies, including employment equity, water, the National Health Insurance (NHI), and mining charters that had eroded investor confidence.

Indlulamithi envisions that ratings would plummet and that would discourage investors. But the reluctance to invest would be exacerbated by an “unfriendly” government in 2029 and 2034.

The country’s wealth would remain predominantly in white hands, while unemployment was envisaged to become severe at 44% in 2035 with youth unemployment hitting 63%.

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One of the positive scenarios for sustainable energy supply given by Indlulamithi Scenarios as a forecast for 2035 was that private entities and municipalities would play active roles in the procurement of electricity instead of relying on Eskom.

It said by the early 2030s, over 40% of municipalities would become at least partially self-sufficient in electricity supply, while Eskom’s transmission and distribution units would no longer be losing money.

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Coordination needed

There would be interaction between the state power utility and private concerns resulting in private green energy generation using Eskom’s core infrastructure efficiently.

During this period the power supply would be stable and far cleaner with a move away from coal. But this shift would see thousands losing their jobs as eight of 14 coal-fired power plants would be shut down after 2024, as envisioned in the scenario.

The report said the semi-reprivatised SA Airways would shift to full privatisation by 2029. The scenarios also suggested state logistics company Transnet might get life-saving recapitalisation loans from the Brics Development Bank with assistance from India.

Another scenario envisioned a stage where the country’s democracy would see political parties being distrusted by over 70% of voters and over half the population no longer trusting the courts with the army being the most trusted institution in SA. In the process, a centrist social-democratic coalition would govern.

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