Economic prosperity awaits SA on the horizon, says adviser

Botha, who was the guest speaker at a business breakfast presented by Church Unlimited on Friday September 10, told the business community of Mbombela that South Africa is at the dawn of a new era of economic prosperity.

This is despite the fact that the country slipped into what is generally referred to as a technical recession – two successive quarters of negative GDP growth – after the GDP growth decreased by 0.7% in the second quarter of the year. This follows a restated contraction of 2.6% in the first quarter.

But Botha is adamant that there is more than one way to define what a recession is.

“Despite various challenges due to an inept government and Covid-19, the basic price GDP (market price GDP, minus taxes and subsidies on products) increased between April and June with 6.6% since the first quarter to reach a new peak of R1.4t,” Botha said.

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“In real terms (that neutralises the effect of inflation) the growth rate is 5.6%. The GDP increases to R1.53t after the effect of taxes and subsidies on products have been included in the calculation. This is a new peak and represents a real growth rate (quarter to quarter) of 4.2%, still a very good performance.”

Botha, who is known to be more optimistic than other economists, is adamant that the statistics are on his side and that he has reason to be optimistic, despite fierce criticism from his peers.

“I predicted that the economy would be fully recovered by the fourth quarter of last year. I was laughed at. But look at the latest GDP figures. Eight out of 10 sectors performed better than expected. At least some of my critics have the decency to apologise every time my outlook has been proved to be correct. The confidence in agriculture is at an all-time record high. Construction is clearly not at its knees and retail sales trade shows that shoppers have returned; all good news, and SSA should be reprimanded for not painting the full picture
of the South African economy,” Botha added.

“In general the economy grew very well since after the outbreak of the pandemic with exceptions like the hotel industry and restaurants, but the feature is definitely not bleak.” According to him, the country is on track with president Cyril Ramaphosa at the helm. But he needs more time; nothing will happen overnight.

“Zimbabwe and Venezuela became failed states because of the wrong policies. We have to get away from ideologies and go back to pragmatism. We can create jobs for every single South African if we implement the right economic policies, and I believe Mr Ramaphosa is doing the right thing.

“In the fourth quarter of last year, this economy produced exactly as much as in the fourth quarter of 2019. Which does not mean that all sectors did well, but we are normalising this economy,” Botha said.

“I have absolutely no doubt in my mind that this economy of ours is in a take-off mode,” he concluded.

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