Cape Town — A chief economist from Standard Bank, Goolam Ballim, says South Africa is not yet a failed state, but it is a fragile one, following the conclusion of the State of the Nation Address (SONA).
Ballim was speaking after SONA on Thursday evening, where president Cyril Ramaphosa highlighted his administration’s efforts to tackle state capture where he said the country’s institutional fabric remained “butchered”, and his main concern about the state of the nation was the rule of law, EWN reported.
“Up to 75% of the reason any economy thrives persistently is because it’s founded on the rule of law or more extendedly a sound bedrock of governance. South Africa’s governance structures have been brutally undermined,” Ballim said.
He said some progress was made by the South African Revenue Services (SARS) it ewas an exception, not a rule. He did not label the country as a mafia state or as a failed state, but said it was in a precarious situation.
“I would describe our country as a fragile state, not yet a failed state. Not yet, in the sense that we still have some pillars of our institutional fabric. The judiciary, in general, for example does hold fair muster. But the state is certainly fragile.”
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According to Satori News, South Africa is deeply intertwined with global economic movements due to its openness, the nation faces significant challenges that could affect its economic health.
Ballim painted a picture where South Africa settles into a “Goldilocks phase” where, despite South Africa facing favourable interest rates and controlled inflation, there are looming risks that can threaten the balance.
South Africa must contend with its own dilemmas. Despite anticipated improvements to the embattled Eskom and Transnet, there are still issues that remain.
Ballim splits 2024 into two distinct segments: In the first half, South Africa will undoubtedly grapple with escalating uncertainty as it builds up to the national elections. The second half, however, will largely be occupied with absorbing and adjusting to the outcomes of these pivotal elections.
In addition, he said South African investors and policy-makers should prepare for a year that promises economic trubulence, and episodes of progress and regress amidst the country’s economic challenges.
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Compiled by Matthew Petersen
