JOHANESSBURG- Newly elected president Cyril Ramaphosa has a tough task ahead with tackling the South African economy.
Growth under former president of Jacob Zuma was sluggish, with unemployment rates high and his leadership viewed weak by economic analyst.
South Africa is one of the most unequal societies in the world, with the legacy of apartheid still very evident with the divide between white and black South Africans economically and socially.
Here are the challenges Ramaphosa faces in the economic front:
-South Africa’s economy has only grown at an average annual rate of 1.4% in the past decade.
-For an emerging economy that rate should be around 5% as seen in other African countries.
-South Africa’s growth in the last few years has weakened to such a low that it’s slower than the increasing population figures.
-GDP figure is low, as average living standards are decreasing.
-Unemployment sits at 27%, that is 1 in 4 people.
-The inequality rate is unbelievably high, according to the Gini coefficient which rates inequality from zero which is complete equality to 100 which is one income to an entire family. For South Africa the figure sits at more than 60.
– Land reform has happened at a slow pace as many Black South Africans do not have access to the land, and is still majority owned by white people. It is important that Ramaphosa tackles this, as it is a ticking bomb issue.
-South African government is borrowing at high levels and this debt can become a burden to the economy.
For Ramaphosa to make any progress in the economy he will need to make a lot of reinforcement in the public sector’s financial position.
Photo Credit- Daily Maverick