South Africa needs a new economic policy that envisages an overhaul of the power utility Eskom, which can't keep the lights on. EPA/Nic Bothma
As the entrails of the era under South Africa’s former president Jacob Zuma continue to be exposed each day before a commission set up to investigate corruption, so the country witnesses the consolidation of the political project spearheaded by the new head of state Cyril Ramaphosa.
But a key piece of the puzzle is missing: Ramaphosa’s government doesn’t have an economic policy. All that’s been forthcoming is a stimulus package, plus two summits – one on jobs, the other on investment. Do these add up to an economic policy?
Families and the state are equally responsible for contributing towards human capital. Shutterstock
A country’s wealth goes hand in hand with its Gross Domestic Product (GDP), which is the market value of goods and services over a defined period of time. In contrast, wealth is capital or assets: the tools we have to create GDP sustainably.
There are several types of capital available to a country: manufactured capital, natural capital, financial capital, social capital and human capital. Human capital includes people’s health, education, skills, motivation and inclusion. Social capital, on the other hand, refers to institutions and organisations that help to develop human capital: families, communities, businesses, schools, faith organisations, and the like.
A recent World Bank analysis concluded that two thirds of the wealth differentials between countries can be attributed to variations in human capital. It found that human capital accounts for 70% of wealth in high-income countries, whereas natural capital remains the biggest asset in low income countries.
Importantly, low-income countries that have moved to middle-income status have done so mainly by investing in human capital, particularly, health, education and infrastructure.
R21 billion: that’s how much South Africa’s beleaguered national carrier, South African Airways (SAA), says it needs to keep running.
SAA has reached this point in its financial crisis through persistent mismanagement and cronyism, with the SA government as main shareholder refusing to take tough decisions about the company. But such decisions can’t be delayed any longer.
In theory, it’s the South African government that supports SAA and bails it out in times of need. But in practice, it’s the country’s already struggling taxpayers who foot the bill. And they keep doing so, with no clear plan in sight to stem the airline’s financial haemorrhaging. The Free Market Foundation, an economic and policy think tank, estimates that SAA has already cost taxpayers close to R60 billion in the past 20 years.
I have argued for some time that SAA is nothing more than a government vanity project and should be sold. In March 2016, when I first said this, it might have been feasible; then, the airline was still financially viable. That moment has passed as the government kept SAA as a vanity project.
Buffalo in the Kruger National Park, South Africa. Shutterstock
The hunting of wild animals is an emotive issue, drawing fire from anti-hunting organisations, environmentalists as well as many ordinary citizens. But it also has its supporters, some of whom argue that hunting, in particular, is a valuable source of income and that it contributes to conservation of wildlife, that can be used to protect threatened species and be put to other good uses.
Africa remains one of the most sought after destinations for hunters. The North West University’s Tourism Research in Economic, Environs and Society unit, which I’m a part of, set out to establish what financial contribution hunting makes. This is a particularly important question given the poverty challenges facing the country.
