Mandela’s economic legacy

Twenty years ago, South Africa had a GDP of $136bn. Today, that has almost tripled to $385bn. Tax receipts have risen from 114bn South African Rand to 814bn Rand, and in the last ten years labour productivity per worker has risen from $8,800 to $25,600. Electricity was available to only 58% of households in 1996, now it is available to 85%. And social grants for welfare which were paid to 2.4mn people in 1994 are now paid to 16.1mn.

However, against 14mn people in employment now, 7mn are not working, with 70% of the unemployed under the age of 34. And social grants for welfare which were paid to 2.4mn people in 1994 are now paid to 16.1mn. This is partly because those grants are now much more widely available, a strength for a developing economy which is beginning to establish a welfare system, but also suggests the burden that government welfare spending poses for tax revenues. Productivity in mining, which represents a huge proportion of the country's GDP, fell by 4% in the last ten years, while wages inflated by 11%.

These are some of the findings of a report produced by Goldman Sachs in November, into the progress that South Africa has made in the last twenty years, and the challenges which still face the country now. The Goldman Sachs report is analysed in South Africa's Business Report newspaper here,and provides some powerful data and evidence for students who are studying Growth and Development as part of unit 4. Worth reading alongside two items from the BBC website: a video report of Mandela's economic policies and legacy, and a written report which looks at key areas of unemployment, inequality, the industrial unrest and shootings at the Marikana mines, allegations of corruption amongst today's political leadership, and the importance of being the fifth member of the BRICS.