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Why South Africa is facing an insurmountable task and why it will take at least 100 years to fix

South Africa is in dire straights. The SOE’s are failing and unemployment is at an all time high. Combined with that we have stagnant foreign investment and an exodus of skills and wealth. Can we turn this ship around?

The current population is 56,72 million. The net population growth rate is 1.2%

We have to create 55,580 new jobs per month, just to maintain the status quo. With our current unemployment rate of 29% or 16,45 million people there will be 21 million unemployed people in the country in 20 years whilst we are only creating 843,000 new jobs a year.

Now add to that disastrous picture a GPD growth rate of 1.3% and we have a perfect storm.

In summary.

  • The exodus of investment and capital combined with
  • the population growth, combined with
  • the low job creation rate and combined with
  • the low GDP one can reach the conclusion by making some careful calculations that;

It will take at least 100-200 years before this trend can be reversed, if ever.

Unless the population growth rate is reduced to at least 0.02% and we manage to quadruple the number of jobs created we will never be able to get ahead of this exponential deterioration.

Can this be done? Yes, but it will take 100-200 years. In the next 50 years we are going to see an exponential decline in the economy due to these facts (and yes, they are indisputable facts) and we are going to see a massive growth in unemployment and poverty. And there is very little that can be done about it.

All the political campaign promises mean absolutely nothing because they cannot come up with solutions for this problem, if they even know it exists.

You cannot instantly convince the populace to have less children. You cannot create a million jobs per year which is needed in the next 12 months and you certainly will not be able to create more than 1 million jobs per month in 20 year’s time. And that is what will be needed just to cancel out the population growth.

Marthinus Strydom

Marthinus is a venture capitalist and private equity investor.

One Comment

  1. The current economic situation in South Africa is indeed dire. With little opportunity as the infrastructure crumbles. And if it couldn’t get any worse, we’re bleeding experienced professional people at an alarming rate!

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