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South Africa in 2025 (long read)

The Real African|| By Dumani Mandela

The group of scenarios we are going to look at were produced in principal for South Africa within the African context.

They were published by the office of the South African presidency (policy co – ordination and advisory services – PCAS) in 2008 called; South Africa scenarios 2025, the future we choose. The scenarios were called; Not yet there, Nkalakatha and Muuhango.

The scenarios aim to stimulate discussion about the challenges South Africa might face up to after 30 years of democracy. The report expounds on its views to scenario planning by stating that;

 “…scenarios are not predictions, nor roadmaps; they are constructed stories about a particular point in the future and some informed speculation about the crosscutting paths that might get us there. The power in scenarios lies in provoking a sense of what be possible and in combining probabilities in ways that we might not have thought of previously”. 

The scenarios presented in the report for South Africa scenarios 2025 are neither worst case nor best-case scenarios of South Africa, which can end up being high road or low road scenarios but rather have their roots in some current reality.

This is on the basis that South Africa could do better than any best case scenario or that it could do worse than any worst-case scenario. The report identifies six Key driving forces that are mostly likely to influence South Africa to 2025 which are; shifts in global economic power, shifts in global political power, resource constraints, South Africa’s economic growth, governance, and social fabric.

The first key driving force shifts in global economic power in which rapid industrialisation and growth of China and India and their demand for resources are changing the way world markets function. The report predisposes that by 2025 China’s GDP will be the same as the USA reflecting three decades of growth. The growth of Brazil, Russia, India and China’s requirements for oil will do more to change the fortunes of African nations in the next 20 years than the last sixty years of Western Investment and aid.

Africa’s economic clout also as a result grows exponentially in 2025, with noted dangers of the disregard to democracy and human rights by Russia and China being noted a danger to African development, especially vies a vies the relationship with it the USA and its x colonial powers.

Also by 2025 trade in goods and services will amount to more than half of global GDP, therefore, affecting Africa’s fortunes.

The second driving force shifts in global political power. The power of the US particularly militarily where its military budget is larger than the fifteen largest economies will remain somewhat unchanged with it still having the largest global military force.

The report also expects that there will be fewer armed conflicts in the next decade in the world, with the global actors taking a much more multi – lateral approach to global problems. South Africa’s leading role in reshaping elements of international discourse over the last fifteen years, and re – imagining Africa, may be challenged by other fast growing power blocs in East and West Africa, leaving South Africa to pursue more narrow national and regional interests in the future.

The third driving force is resource constraints with the world that is caught in an energy gap, between the age of fossil fuels, particular oil with the development of alternative fuel sources being slower than envisioned.

By 2025, nuclear, hydrogen, solar and wind, will be the dominant energy source. But however, they might come at a high cost for their production limiting international tourism and mobility. Lastly, the battle for arable land will be an issue with shortages and deterioration of critical resources in the world like soil, and water could become pressing global issues.

The fourth driving force is South Africa’s economic growth, as an element of the shaper of the future of South Africa, and its economic performance. With this key performance indicator, there are more questions than answers such as: How competitive and productive will South Africa become in 2025?

Will the rapid decline of South Africa’s manufacturing, mining, and agricultural sectors in relation to their contribution to GDP be reversed and how? How responsive will the private sector be to national imperatives? Lastly, can the South African economy become more integrated into Africa?

The fifth driving force is governance in that how able, competent, efficient, honest and legitimate the government is going to be in 2025 and the years leading up to 2025.

Will the government be able to promote national competitiveness and drive the country forward or will it hinder innovation, productivity and social inclusion? Howe well will the government deal with issues of health, crime and corruption? And lastly, will leadership with particular reference to electoral politics within the largest political alliances bring about a greater sense of unity.

The last driving force for the scenarios is social fabric being the state’s ability to build a sense of nationhood, a sense of human solidarity that cuts across class, gender, race and ethnic divisions.

The report states that the South African state will be able to maintain its social fabric by providing citizens, especially the youth, with skills to operate in a 21st-century economy whilst increasing the wellness of its citizens and creating a sense of belonging and security for all.

The South African government should also create a sense of national pride in restructuring the national narrative for the greatest good. The educational and religious complexity of South Africa is also noted and the question is asked; how will government interact with these socialising forces for national benefit?

Using these key drivers, there are three scenarios that are discussed in South Africa scenarios 2025 which are; Not yet Uhuru, Nkalakatha and Muuhango. The first scenario, not yet Uhuru, depicts a Government strongly committed to accelerating economic growth through optimising conditions for private investment, but which struggles to achieve its goals in the face of deteriorating global conditions and severe ecological challenges. The key points for not yet Uhuru are:

  • Holding Firm to Fiscal Discipline: in 2025 government has to work hard to unblock constraints, boost education, reduce crime, and attract investment, both foreign and local. It has to work hard to become a regional hub by providing finance, capital and knowledge for those wishing to invest in South Africa and Africa.
  • The State is Developmental: The state directs the path for national development with new poverty reduction plans and the publics work programs are expanded.
  • The Gap between the rich and poor: by 2025 the poor make up a smaller demographic but their relationship with government is still circumspect with the gap between the haves and the haves not’s growing wider.
  • Empowerment: Senior management is the government is almost exclusively black in 2025 but the nation’s capital markets are in white minority hands.

The second Scenario is; Nkalakatha which depicts a more cohesive society s a result of government playing a more central role in the economy, prioritising poverty reduction and skills enhancement by articulating a compelling national vision and fostering partnerships. The key points for Nkalakatha are:

  • National Compact: In 2025 the government worked hard to achieve a balance with the needs of the people and the conditions for prosperous private enterprise. Services to the poor are ramped up ramped up. Business and organised working class strive to create common solutions. Industrial policy is implemented systematically in the context of an emerging social compact.
  • Business: In 2025 business is clearer that before that nothing threatens their longer-term accumulation potential than the growing threat of insurrection and social turmoil brought on by poverty inequality. There is a need by business for a “take charge” Government. Local and international business falls in line as supporters of government’s plans.
  • Global Political Instability: In 2025 political instability in oil producing regions and rapid decline in available oil causes energy prices to spike. The full impact for of the need for renewables is coming to bear. Japan and USA’s growth is at 3% which is lower than the global average of 4%.
  • New African Union: In 2025 Africa has built stronger ties with East and Latin America, the continent was able to sustain and an average rate of 6% growth. South Africa was also able to continue to take advantage of this world experience by Africa to play a more effective role in the international stage, by navigating the interests of USA, EU, China and India for the best deal for itself.
  • Empowerment: In 2025 30% of black ownership in the JSE is achieved with 40% of all managers and professionals being black.

In scenario three, Muuhango depicts a government that battles to govern well despite an initial resurgence of the economy and positive world conditions, because of poor planning, lack of coordination and slow policy implementation. The key points for Muuhango are:

  • An environment for Growth: In 2025 Africa is better at governance and has strong economic performance particularly in Southern Africa, which characterises the African continent in this period. Better terms of trade are negotiated from collective strength, allows the Southern African economies to grow at 5%. Growth is stimulated by government infrastructure investment and South Africa sells more services internationally.
  • Inconsistencies: In 2025 despite a good economic environment there is a breach in the government key performance system. Not enough is done to check public sector corruption such as tenders going to companies with clear connections to well-positioned people within the ruling party. Also, there is a failure to kerb self-enrichment by people working in government at all levels. A big increase in the size of public service by 400 000 people helps to create jobs but does not assist in creating efficiencies or delivery.
  • Deterioration: In 2025 successive governments battle to articulate clearly and to model the social values that encourage solidarity. The government celebrates and condones vulgar displays of wealth. There is widespread corruption in the civil service. Elements of the judiciary and investigating agencies are co-opted into a permissive era. The private sector also adapts to the corrupt ways of managing themselves in an equally corrupt manner by finding creative ways to get the politicians to do their bidding.
  • Poor Government Planning: In 2025 healthcare and education flounder with the inability to enforce consequences for poor performance. There is little in the way of central planning and coordination. There is despite ministerial clusters, lack of a shared vision of growth and development in society.

The scenarios presented in South Africa scenarios for 2025 are a mixture of what South Africa is at present.

Nkalankatha is probably the scenario that best describes from past and present developments what South Africa might look like in 2025 if one is positive.

However, in order to understand the South African scenarios, it is important to contextualise them in the African context. It is worth noting that seven out of the ten fastest developing nations in the world in 2016 according to IMF were in Africa. There is also the regional integration that is being spearheaded by the African Union, which seeks to harmonise African trading amongst its member nations on the continent.

There is also the vast commodity consumption of China, which in a lot of cases is buying African commodities at above market rates. Although South Africa is growing at less than 1% of GDP currently, there is an opportunity to make the Nkalankatha scenario a reality by taking advantage of the confluence of forces that are driving African growth.

South Africa secondly has one of the best regulatory regimes in Africa, which would make it an ideal base for international companies wanting to enter the African market. South Africa can achieve the Nkalankatha scenario if it, maintains law and order, kerbs corruption, promotes social cohesion and lastly make itself the gateway to Africa through its regulatory regime.

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