Get more Mail & Guardian
Subscribe or Login

Editorial: GDP focus trips South Africa up

We need to deal with this notion that trickle-down economics works in South Africa. What has been clear over the past two decades is that the expansion of our economy hasn’t filtered through to the vast majority. Unemployment has remained stubbornly high since the mid-1980s when deindustrialisation began in earnest as an Asian factory gained in strength and through our boom years leading up to 2008 global recession.

While we’ve had terms such as “black diamonds”, made popular by the Bureau for Economic Research at the University of Stellenbosch at the height of the super commodity cycle that boosted our prospects, it was a phenomena that proved fleeting.

The emerging black middle class that was supposed to drive the country’s economic transformation has come under significant pressure over the past decade as corporate SA looked to rather invest offshore and public sector spend dried up as a result of a badly executed and corruption-tainted expansion of electricity generation in the main.

The Covid-19 pandemic has just added another dampener. While we may celebrate the first quarter GDP figures released by Statistics SA this week, the agency points out that the size of the economy is now comparable to 2016. It’s a sobering thought.

But here’s a hypothesis that the Mail & Guardian has been playing with this week as we considered the latest statistics that do point to a rebound in the economy. What if, in a best case scenario, markets turned in emerging market countries’ favour for the next decade? Would the fortunes of the regular man or woman on the street change significantly? 

The structure of the South African economy and the state’s focus on primarily GDP as a marker of its success or failure warn us that once again the benefits of any sustained upturn in our fortunes would only benefit a few. Any structural reforms that would ensure a greater share of economic wealth that would affect the short to medium-term target of GDP growth at all costs quite simply mean they won’t be adopted.

This is not uniquely a South African problem. Since the end of the roaring Twenties, GDP has been the primary target of governments in the modern democratic world. It’s been a marker of their success or failure as the idea of “trickle-down” economics has largely won the argument.

This is despite the fact that over many economic highs and lows, the harsh realities for most South Africans, Brazilians and Chileans have proved impossible to escape. We have to rethink our GDP focus. British economist Kate Raworth asks a pertinent question in her seminal 2017 book, Doughnut Economics, that we should all consider, in particular our policymakers. In the context of today’s social and ecological crisis, how can GDP — “this single, narrow metric” — still command international attention?

Subscribe to the M&G

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them.

Related stories


If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here


Subscribers only

MK committee to look into Gupta influence in military veteran’s...

Party insiders say a report on the Guptas’ association with leaders of the Umkhonto weSizwe Military Veterans’ Association will help rid the structure of Jacob Zuma’s most loyal allies

Bloated Sassa to make staff cuts

The social security agency has ‘lost’ R2-billion on unnecessary salaries and through wasteful expenditure

More top stories

As South Africa’s Covid infections surge, the number of jabs...

Hospitals are under strain, nurses are burning out and infections are on the rise, but there are limited Covid-19 vaccine doses available

SAA: PIC allegations are Harith’s albatross

Sipho Makhubela assures that the private equity firm has what it takes to raise the capital to get SAA flying again

Young people call for an end to the terrible legacy...

‘The generation of 1976 did not fight to end the injustices of their time only for there to be the dawn of a climate apartheid’

Honey laundering: Transcontinental scheme puts fake honey into our supermarkets

South African beekeepers compete with cheap honey imports while still using ethical, bee-friendly practices

press releases

Loading latest Press Releases…