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South Africa in crisis (part 3): failure will impact Africa and the world

Posted By on October 3, 2018 @ 14:52

Whether South Africa is teetering or slowly crumbling is moot. But one thing’s clear: the country faces a raft of intersecting crises that it is ill-equipped to solve. And the world’s inattention doesn’t mean it’s not going to matter. A collapse of Africa’s most advanced nation, be it rapid or piecemeal, would have a massive regional impact—with significant knock-on effects beyond the continent.

South Africa’s future matters most, of course, to its 58 million people—a number that is projected to rise to 65 million by 2030 [1]. A failure of what is currently the world’s 25th most populous nation would be disastrous, ipso facto. Life may be far from rosy for the majority of South Africans, but it would get much worse if living standards fell back towards the norms that prevail in other sub-Saharan countries.

According to the most recent World Bank data [2], 57% of South Africans and 74% of those in neighbouring Zimbabwe live on less than US$5.50 a day. In Africa’s three biggest countries by population, the situation is dire: it’s 85% in Ethiopia, 98% in the Democratic Republic of Congo, and 92% in Nigeria. That’s not somewhere you want to be.

Africa’s economy is not as integrated as it ought to be, yet South Africa is an enormously important economic player, particularly for the countries of Southern Africa. Landlocked Lesotho and Swaziland, along with the former South African dependency of Namibia, are part of the Common Monetary Area, which ties local currencies to the rand. If South Africa goes under, those countries will sink with it.

Trade statistics underline South Africa’s significance to the region. Exports produced by its relatively sophisticated manufacturing, agricultural and services sectors are especially critical. Namibia draws 57% of its imports [3] from there; Botswana, 65% [4]; and Mozambique, 30% [5]. Exports from this trio to South Africa account for between 14% and 16% of their total export trade.

Zimbabwe’s dependence on South Africa is more acute again. The creation of Rhodesia—of which Zimbabwe is the post-independence successor state—was an integral part of capitalism’s expansion in South Africa during the late 1800s, so bilateral economic links have long been intimate. Yet the relationship was previously a much more dynamic, two-way phenomenon.

Since 2000, when Robert Mugabe’s ‘fast-track land reform program’ gutted the country’s agro-business economy, South Africa has been less an economic partner than an emergency life support. Nearly 80% of Zimbabwe’s exports [6]—far more than any other Southern African country’s—cross the Limpopo to South Africa, and 41% of its imports travel the other way.

That last figure excludes an entire universe of dependence that revolves around the Zimbabwean diaspora in South Africa. Pushed by economic collapse and political persecution, untold numbers [7] of Zimbabweans have illegally migrated south in search of work and shelter. So vast has this population movement been that the demographics of some parts of Zimbabwe, like rural Matabeleland, are markedly different from what they were in the 1980s and ’90s. Some of these areas have been largely stripped of their economically active youth, who now keep those at home alive through their remittances of cash and kind.

Official figures put the value of remittances at an average of US$1 billion a year [8] over the past three years—and that’s likely to be a significant underestimate given that much is sent through unofficial channels. Those in South Africa are estimated to contribute more than a third [9] of the total figure, aside from drawing directly on the South African economy to support their own needs. When the two are combined—both direct dependence and remittances—it’s clear that a large proportion of Zimbabweans are reliant on South Africa’s economy. Even small shocks, like depreciations of the rand’s purchasing power, cause serious grief for them. A repeat of Zimbabwe’s economic disintegration in South Africa would be a disaster of monumental proportions.

Further afield on the continent, geography dissipates South Africa’s economic weight, but it doesn’t become trivial. South Africa is the second largest exporter [10] to sub-Saharan Africa next to China. Together with Nigeria, South Africa generates almost half of Africa’s GDP [11]. An economic dive in South Africa would lop chunks of varying sizes off the GDP growth of many countries outside Southern Africa—something the continent can ill afford given that growth is already insufficient to reduce poverty [12] in any substantial way.

That’s because Africa is in the midst of the biggest population spike in human history. The UN’s ‘medium scenario’ projection [13] is that Africa’s population will climb from today’s 1.3 billion to 1.7 billion by 2030, double to 2.5 billion by 2050 and soar to 4 billion by 2100. Africa will contribute more than 58% of world population growth between now and 2050, and over 89% by 2100. The end-of-century figures may differ significantly by the time we get there—depending on factors such as economic progress—but demographers point out that inertia means the projections for the next 10 to 30 years are almost certain to be relatively accurate [14].

That means the consequences are just around the corner. For everyone. If Africa doesn’t get it right, it will inevitably export its problems across the globe in the form of mass migration and terrorism, among others. It will also become a centre of increasing conflict between global powers. Hunkering down behind walls and border forces isn’t going to cut it, in and of itself.

It’s time we started caring more about what happens in Africa. If we don’t do it now, we’ll pay later, as sure as one African birth succeeds another.



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URL to article: https://www.aspistrategist.org.au/south-africa-in-crisis-part-3-failure-will-impact-africa-and-the-world/

URLs in this post:

[1] 65 million by 2030: https://businesstech.co.za/news/general/180963/there-will-be-65-million-people-living-in-south-africa-by-2030-heres-how-we-stack-up-to-the-rest-of-the-world/

[2] most recent World Bank data: https://data.worldbank.org/indicator/SI.POV.UMIC?locations=ZA-NG-CD-ZW

[3] 57% of its imports: https://wits.worldbank.org/CountrySnapshot/en/NAM/textview

[4] 65%: https://wits.worldbank.org/CountrySnapshot/en/BWA

[5] 30%: https://wits.worldbank.org/CountrySnapshot/en/MOZ

[6] 80% of Zimbabwe’s exports: https://wits.worldbank.org/CountrySnapshot/en/ZWE/textview

[7] untold numbers: https://africacheck.org/reports/how-many-zimbabweans-live-in-south-africa-the-numbers-are-unreliable/

[8] US$1 billion a year: https://www.newsday.co.zw/2018/02/tap-diaspora-remittances-growth/

[9] more than a third: https://www.newsday.co.zw/2017/05/diaspora-remittances-180m-q1/

[10] second largest exporter: https://wits.worldbank.org/countrysnapshot/en/SSF/textview

[11] almost half of Africa’s GDP: https://www.timeslive.co.za/sunday-times/business/2018-05-25-world-is-looking-elsewhere-in-africa-as-sa-economy-struggles/

[12] already insufficient to reduce poverty: http://www.worldbank.org/en/region/afr/overview

[13] ‘medium scenario’ projection: https://population.un.org/wpp/DVD/Files/1_Indicators%20(Standard)/EXCEL_FILES/1_Population/WPP2017_POP_F01_1_TOTAL_POPULATION_BOTH_SEXES.xlsx

[14] almost certain to be relatively accurate: https://theconversation.com/theres-a-strong-chance-that-one-third-of-all-people-will-be-african-by-2100-84576

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