South Africa will only be able to materially improve the lives of all South Africans and deliver on the promise of 1994 if we are able to kick-start, and sustain, high levels of inclusive economic growth.
South Africa entered a technical recession last year and with the arrival of Covid-19 at the beginning of March 2020, it is clearly evident that the associated economic and social ramifications for South Africa are more severe than previously anticipated.
Business for South Africa (B4SA), established as business’ response to the Covid-19 pandemic, expects GDP to decline by between 8% and 10% in 2020, recovering in the next two years to pre-Covid-19 levels, with muted growth thereafter. It forecasts a budget deficit of 13.3% for this fiscal year. Meanwhile, government debt is escalating to record levels in both absolute terms and as a percentage of GDP. In the absence of growth enhancing structural reforms, budget deficits are expected to remain high and government debt is expected to exceed 100% of GDP in 2023 (vs. 26% in 2008), as annual budget deficits remain above 13% of GDP.