Preceded by Cyril Ramaphosa, this analyst has delivered a "cautiously hopeful" state of the nation's address this week, with promises and plans to drag South Africa out of a slow-growing economy, while attending to many social ills that persisted since dawn of democracy in the country.
Ramaphosa's "new dawn" approach to his presidency is in sharp contrast to the administration of his predecessor, Jacob Zuma, who Ramaphosa and Finance Minister Tito Mboweni have publicly accused of overseeing "nine wasted years" of governance, which brought about economic decline.
For his part, Zuma has tried to counter the narrative that the nine years he spent as president were 'wasted'.
According to Zuma, his critics within the ANC (alluding to Ramaphosa) who claim he wasted so many years are in fact pointing fingers at themselves, as they were part of the same administration they now criticize.
Beyond that, however, the former president said that calling the last decade and wasting one – especially in the election year – was taking a defeatist attitude and betraying the trust of the people who elected them.
Zuma countered the notion that the nine years were wasted by pointing out all the good that was achieved – namely:
- Millions of lives have been saved and transformed due to action on HIV and South Africa today has the largest treatment program in the world with more than 3.9 million people on treatment.
- Life expectancy increased from 58.8 years in 2007 to 64.3 in 2015, while the death rate fell.
- His administration created the National Development Plan as a central pivot around which to build government programs.
- Government was made more accessible through the Presidential Hotline.
- South Africa was the number one in the world in 2017 for delivering subsidized housing for the poor, with nearly 4.5 million houses and subsidies delivered.
- The government increased access to electricity. Access to sanitation improved. More households have access to piped water.
- The social grant program was expanded to 17 million.
- Government's expanded school nutrition programs in both primary and secondary schools reached more than 9 million children every school day, most in no-fee schools.
- Previously neglected provinces such as the Eastern Cape enjoyed the investment of hundreds of millions for development.
- More than R1 trillion was invested in national infrastructure projects between 2009 and 2014.
- Two new universities were built
- The ocean economy project became apex priority and was a major creator of jobs.
- The Zuma government has introduced free tertiary education, building on the gains in basic education.
- The matrix pass rate increased every year.
"These were not nine wasted years," Zuma said.
What South Africa lost
According to economist Magnus Heystek, Zuma's term brought destruction and carnage to South Africa's economy, with almost all financial metrics in the country under Zuma's ANC having experienced a dramatic decline.
The damage in some instances, is irreversible, he said. In most others, "it will take a stupendous effort by the government and private sector to reverse the damage to the vital organs of SA Inc.".
"Take your pick of vital signs: economic growth, foreign investment, unemployment, the value, government debt, budget deficit, performance of the JSE, retirement fund returns – they all show the signs of a slow-moving financial tsunami gathering speed and spreading to all corners of our beautiful country, "he said.
To emphasize his point, Heystek listed the things that South Africa lost during Zuma's time as president:
- SA's average growth rate since 2009 has been slightly over 1.5% per annum to end 2017.
- The unemployment rate increased from 22.5% for 2008 to 27.5% for 2017.
- Total Public Debt, as a percentage of the nominal GDP, dropped from a low point of 26.5% in 2008 to exactly double that (53%) toward the end of 2017.
- SA's total debt is now close to R3 trillion, depending on the rand / dollar exchange rate. If the contingent liabilities of the State are included, the number rises to about 60%.
- Revenue collections are under considerable pressure. In December 2018, company income taxes were 6.6% lower than a year ago. Expect a grim 2019 Budget with a estimated budget deficit closer to 4.5% than 4%.
- Electricity prices ballooned 350% from 2008 to 2017.
- Per capita GDP declined from 8,066 USD per annum in 2011 to 6,268 USD per annum in 2017.
- Net SA FDI (Foreign Direct Investment) as a percentage of GDP in 2010 = + 22.7%. In 2017 it was a minus 29%.
- Government wages as a percentage of GDP in 2007 = 10.5%. In 2018 it was 13.9%.
- Personal income taxes (as a percentage of GDP): 2007 = 7.35%. In 2018 it was 9.81%.
- SA was the only OECD country in a recession during 2018.
- The SA economy is currently in its lowest growth trajectory since 1945.
- S & P Global Ratings and Fitch has reduced SA's credit rating to below investment grade. Junk status, in other words.
- Residential property market has been in a 10 year bear market. Prices have declined by 22% in real terms over this time. In the third quarter of 2018, new mortgage applications dropped by 16% – and not a single word about this reported in our mainstream media.
- Average retirement funds have now not beaten inflation over 1, 3 and 5 years-soon 7 years.
- Annual average returns on the Johannesburg Stock Exchange have been last or second to last when compared to S & P 500, MSCI World Index, MSCI Japan and MSCI Europe. Against is peer group – the MSCI Emerging Market – it has been lagging for almost 2% per annum since December 2015 (when Zuma fired finance minister Nhlanhla Nene).
- Since then more than R400 billion has left our equity and bond markets.
"Poverty is increasingly visible on every street-corner, in declining car and retail sales, in empty rugby and soccer stadiums, in dwindling golf and bowling memberships.
"The list is almost endless," Heystek said.
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