Image Credit: Andrew Massyn

South Africa in Crisis

The resignation of South African President Jacob Zuma in mid-February 2018 offers some relief in South Africa’s profound national crisis. However, the challenges that lie ahead for Cyril Ramaphosa, the country’s new President, and his team are steep. We wonder: Which of the following are challenges crippling the country right now?

A. Unemployment
B. Crime and violence
C. Xenophobia
D. Corruption
E. Water supply problems

A. Unemployment … is correct.

Unemployment currently stands at 27%. A major reason for this is deficient economic growth, at 0.3% in 2016, just ahead of a recession. Meanwhile, India – a country that also has to contend with many obstacles – achieved GDP growth of 7.1%.

South Africans are paying the price for many years of scandals and a wide range of criminal charges associated with former President Zuma and his allies in business and government.

Zuma often feuded with top government officials and fired reformers who sought to tackle the country’s problems. Under those circumstances, an overreliance on state-backed enterprises with poor financial performance only dragged down the government treasury further.

Revenue shortfalls are exacerbating budget deficits, leading to credit rating downgrades. With domestic business confidence so low, foreign investors are reluctant to help.

The lack of growth is especially hard on young people entering the workforce. They need a solid economy, so that jobs are created which they can fill.

B. Crime and violence … is also correct.

Violent crime has declined since the end of Apartheid in 1994, but South Africa still faces one of the highest murder rates in the world – among the top ten according to UN data and fourth-ranked in absolute numbers. South Africa’s murder rate is estimated to be nine times higher than that of the United States.

According to other estimates, there have been half a million murders committed since 1994, including many thousands of children. In the final nine-month stretch of 2016, there were more than 14,000 homicides.

In addition, the South African Police Service says that 2.1 million “serious crimes” were reported in their 2016/17 period. Some cities saw double-digit percentage increases in the number of crimes reported that year.

This includes white landowners, who still overwhelmingly control South Africa’s farmable land decades after Apartheid. They have been murdered or attacked as continued racial resentments merge with crime moving beyond the cities.

C. Xenophobia … is also correct.

A year ago, in February 2017, South African police clashed with anti-immigrant protesters demonstrating in favor of ejecting Nigerian and Somali migrant workers from the country.

Given their weak economy, South Africans oppose immigrants from the rest of the African continent. Meanwhile, in the rest of Africa, South Africa is widely seen as an alternative destination to Europe by economic refugees.

D. Corruption … is also correct.

Corruption has long been a challenge in most developing countries with a large mining and natural resource sector. Unfortunately, in South Africa, once considered a beacon of sound business practices, the crisis is at a new peak.

President Zuma, who was forced out in February 2018 after nearly nine years in office, was involved in many personal and professional scandals. Charges include using $21 million in state funds to build out his private residence in the rural town of Nkandla. They also extend to false public health statements while heading the National AIDS Council and rape allegations to government contract corruption and patronage.

Zuma is closely tied to an Indian-born business family (Ajay, Atul and Rajesh Gupta), who are under investigation for grand corruption and have been called Zuma’s “shadow government.” Allegations against them include promising to secure government jobs from Zuma for anyone who would give them favorable treatment.

Zuma’s resignation followed years of sustained pressure by civil society groups, the media and courts. South Africa has been fortunate to have a relatively strong and independent media with broad post-Apartheid constitutional protections – ranking 31 out of 180 countries according to Reporters Without Borders in 2017.

However, the Zuma government had repeatedly threatened that media freedom over the years. In addition, the country’s weak economy has hit the financial fortunes of the media sector hard, which prompted cutbacks to newsrooms.

Corruption across South Africa has become so severe and permeated to such high levels that groups have requested that U.S. prosecutors help pursue companies for engaging in corrupt practices, if they also happen to have U.S. operations, which many do.

Wealthy South Africans have moved a figure equal to 12% of annual GDP offshore to tax havens.

E. Water supply problems … is also correct.

Supplying water for a growing population and large economy are key to sustaining South Africa. South Africa’s 57 million people give it the fourth-largest population in sub-Saharan Africa – and the 24th largest population worldwide.

South Africa also has the second-largest economy in all of sub-Saharan Africa – at $761.9 billion (in purchasing-power-adjusted terms).

Cape Town is the country’s second-largest city. Its 4 million strong metro area population is expected to run out of water completely by mid-April 2018. The city government began emergency water rationing in February 2018.

The water crisis resulted from a combination over several years of severe drought, global warming, El Niño effects, urban planning problems and more.

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