Alongside high levels of inequality, South Africa has seen
increased social fragmentation over recent years. In 2014, we
witnessed the fracture of the Congress of South African Trade
Unions, with the expulsion of its largest affiliate, the National
Union of Metalworkers of South Africa. The fifth Parliament
descended into chaos in what seems to have been the ANC’s
attempt to undermine the rules of the game in a multiparty
democracy. It would appear that the South African social
fabric achieved under Mandela’s leadership has begun to
unravel.
Poverty and growing inequality have been a constant
feature of South Africa’s democracy, and are likely to undermine
prospects for social cohesion. Racial inequality remains
salient but, increasingly, class is becoming a key source of
division (as identified by South Africans in the South African
Reconciliation Barometer). Wage inequality and unemployment
are the biggest drivers of income inequality in South
Africa. High rates of unemployment continue to impact on
the rights of South Africans and, more glaringly, on the future
prospects of young people. The aspirations of underprivileged
youth are further obstructed by a poor quality education
system. South Africa would do well to address the skills
shortage and human capital deficit that is crippling the
economy.
In 2014, the economy did not perform as expected. The
National Treasury revised its growth estimates downwards
from 2.7 per cent to 1.4 per cent. For 2015, growth is forecast
at 2.5 per cent, still far below the target of 5 per cent set
by the National Planning Commission in order to achieve the
‘Vision for 2030’ in accordance with the National Development
Plan. South Africa was also hit by a downgrading of its credit
ratings by the top three rating agencies. The country’s fiscal
prudence, which was regarded as a key strength, is on shaky
ground with analysts raising concerns about deficit levels
and a fast-growing public sector wage bill.
It is unsurprising, therefore, that emerging from the 2014
elections, which marked 20 years of democracy, the ANC
government has prioritised radical economic transformation
for the next five years. Indeed, to produce radical outcomes,
South Africa will have to change course and not merely do
more of the same. Central to achieving its ambitious goals,
the government will have to focus on the efficient management
of state resources against a backdrop of escalating corruption.
It will also have to work on rebuilding a social pact with the
private sector and other social partners, with the introduction
of labour market reforms as a goal.
It is encouraging that the number of people living in
extreme poverty has dropped. Social grants continue to play
an important role as social safety nets to protect the most
vulnerable in our society, especially children.
It is in this vexed context that the IJR continues to remind
South Africans about the founding values of their Constitution,
reconciliation and justice – values crafted from the ruins of
apartheid at a time when their realisation seemed most
unlikely. I trust that this edition of the Transformation Audit
will further policy debate about what trade-offs are required
of us to improve the well-being of South Africans and to
promote a growing and inclusive economy.