BUSINESS NEWS - he South African economy could grow 2.3% in 2018 amid political change, a slowdown in inflation and higher commodity prices, the managing director of Goldman Sachs Sub-Sahara Africa said on Tuesday morning.
Speaking at an event hosted by S&P Dow Jones Indices at the JSE, Colin Coleman said its economic forecast was the “most bullish on the street”.
The International Monetary Fund recently lowered its GDP growth expectation for South Africa to 0.9% from an earlier 1.1%, while the South African Reserve Bank adjusted its projection upwards from 1.2% to 1.4%.
National Treasury is expecting growth of 1.1%.
Coleman said the fact that South Africa has grown by roughly 1% in recent years while the population was expanding at twice the rate was “a disaster”.
Without doing anything right or wrong in particular, the country should be growing at 3%.
“If we perform well we should be at a 5% growth rate and it is only by shooting ourselves in the foot – as we’ve done for the last arguably five years – that you’ve seen a three-year growth rate of [roughly] 1%,” he said.
This situation has effectively developed due to the “shadow state” that has emerged under President Jacob Zuma’s administration, Coleman argued.
“State capture hasn’t been an ideology. It has been a practice and that practice has effectively evolved into a kitchen cabinet and a shadow state that has been effectively running a parallel process to the ANC organisation.”
In some cases, the ruling ANC party agreed with the decisions of the shadow state, but it was also often at loggerheads, he added.
“In effect, President Zuma has in a way been his own captive of that shadow state organisation and its deals that it has made with various parties.”
