President Jacob Zuma delivered his State of the Nation (SONA) 2017 address on the evening of 09 February 2017. While optimistic about economic growth, he acknowledged that the South African economy “is still not growing fast enough” to create the jobs needed to reduce poverty, inequality and unemployment. Mining has always been the backbone of our economy and an important foreign exchange earner.
When Nelson Mandela was sworn as South Africa’s first democratically elected president in front of the Union Buildings in Pretoria 23 years ago he embodied the hopes of a nation. Apartheid was vanquished, and in its place the rainbow nation was born. Apartheid had created rampant unemployment among the black population, an albatross that continues to hang around the economy’s neck almost two decades later.
South Africa’s official unemployment rate has hovered around 25% for years, and youth unemployment is much higher. By some measures half of those under 25 are out of work. South Africa remains a dual economy with one of the highest inequality rates in the world, perpetuating inequality and exclusion. With an income Gini that ranges between 0.66 to 0.70, the top decile of the population accounts for 58% of the country’s income, while the bottom decile accounts for 0.5% and the bottom half less than 8%. This makes South Africa one of the most consistently unequal countries in the world.
The gap between the annual average household incomes of African-headed households and their white counterparts remains shockingly huge. White households earn at least five times more than black households, according to Statistics SA. Even though the BEE policies expanded over the years and helped create a rapidly expanding black middle class, they still largely failed to improve the lot of the majority
Growth is forecast at 1.1% in 2017. Overall, South Africa is projected to remain largely below the average growth rate of 4.5% for Sub-Saharan Africa in 2016–2017…World Bank.
Mining has historically been the backbone of South Africa’s economy, and is also pivotal to the task of redressing historical and social inequalities. The South Africa mining project sector continues to be under tremendous pressure, with exceptional economic and environmental challenges, including a sluggish domestic economy significantly affecting the industry’s ability to contribute towards creating a more prosperous and fairer society. In 2015 the mining industry contributed R286 billion towards South African GDP, representing 7.1% of GDP. Around 500,000 direct jobs are created with mining and each person employed in the mining sector has up to nine indirect dependents. Also, and 200,000 jobs are created in beneficiation industries further downstream. The 2030 National Development Plan (NDP) outlines two main strategic goals to double the GDP by 2030 and eliminate poverty. NDP has listed mining as key drivers for sustainable development and solving unemployment and poverty.
South Africa has no shortage of challenges, but its people have already proved their resilience, creativity, and ability to envision a better future. South Africa needs transformation and it needs radical transformation.
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