GDP growth not meaningful to South Africans, says analyst

Political Analyst and Socioeconomic Commentator, Lunga Mrhetjha, has lambasted government for its remarks on the recently published gross domestic product (GDP) growth indicators for the first quarter of 2023.

Minister in the Presidency, Khumbudzo Ntshavheni, said that South Africans should draw inspiration from the 0.4 percent GDP increase announced on Tuesday by Statistics South Africa (Stats SA) in this year’s first quarter, as it shows that the country is able to make a dent in the economic difficulties it faces.

The Minister emphasized that the positive GDP statistics and the recently published Quarterly Labour Force Survey results for the same quarter should serve as encouragement that the country is making progress in line with the Economic Reconstruction and Recovery Plan.

According to Mrhetjha, when government officials talk about GDP growth, they are not communicating the real measure of progress or success in the country.

“These stats are not a true reflection of the situation on the ground in terms of the impact they make on ordinary people. What most people want to see is a noticeable difference in their pockets, spending power to absorb the high cost of living, the ability to pay for bills and provide for their families.

“If the price of taking credit, buying food, electricity, clothes, petrol and the interest rates are high, while salaries stay the same, it makes no significant difference,” he said.

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Mrhetjha further stated that whenever government throws around these statistics, they are “merely trying to put lipstick and make-up on a pig’s face to make it look presentable, but such tactics are not conducive or appealing to the everyday men and women.”

The fundamental problem here in South Africa, Mrhetjha contends, is that the economy is over-financialized.

“Real sectors like manufacturing and agriculture are suffering while a bulk of the money is circulating there in the Johannesburg Stock Exchange (JSE), being used for speculation in the financial markets.

“Government has folded its arms and dedicated the task of job creation to the private sector. The private sector is incapable of creating enough jobs for the people. All they can do is be parasites and eat government money.

“So everything they are saying about GDP growth has no real meaning in people’s lives,” the Analyst argued.

Stats SA figures showed that eight sectors recorded growth from January to March 2023, with strong contributions coming mainly from manufacturing, finance, personal services, transport and trade.

Bearing this in mind, Mrhetjha does acknowledge that South Africa is a trade surplus nation. He believes that the country has a vast amount of potential to grow and prosper economically.

“The only thing that government must do is abandon the neoliberal path imposed by the International Monetary Fund (IMF) with its structural reform programmes. SA can get back to exporting more than it imports, and in the same breadth increase its Forex Reserves so that it can be in a better position to fund imports as and when it’s necessary.

“What’s missing from this equation is sheer political will,” he said.