Latest news with #OsagyefoMazwai
The South African
11-07-2025
- Business
- The South African
How poor are South Africans compared to the rest of the world?
South Africans are significantly poorer than the global average, and the gap continues to grow. According to BusinessTech and Investec Wealth & Investment International, the country's economic stagnation since 2010 has left its people trailing far behind the rest of the world. In 2023, South Africa's Gross Domestic Product (GDP) per capita, adjusted for purchasing power parity (PPP), was $15 194. The global average was $22 850. That's a vast difference of over $7 656 per person. This means that, on average, South Africans are producing and earning far less than the average person globally, about $7 656 (+/-R136 000) less in 2023. The turning point came in 2010, when South Africa's GDP per capita started falling behind global trends. 'You can see a decoupling of South Africa's gross domestic product per capita from the rest of the world in 2010,' Osagyefo Mazwai, an investment strategist at Investec Wealth & Investment International, said as per BusinessTech . Since then, the economy has been bogged down by a toxic mix of rolling power blackouts, corruption, high crime rates, collapsing infrastructure, and questionable foreign policy choices. These factors have combined to drag growth down to a crawl. According to Investec's analysis, the economy is 37% smaller than it could have been if it had kept pace with its emerging-market peers. To close the gap with the global average in the next decade, South Africa would need to grow its GDP per capita by 8% per year, not something easily attained, Mazwai said. That's well above the 5.9% average growth rate for middle-income countries since 1991, and nearly double the global average growth rate of 4.4%. 'You need to be exceptional in your GDP growth outcomes, and even in that environment, you only get back to the global average,' Mazwai added. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Bloomberg
09-07-2025
- Business
- Bloomberg
South Africa's Low Growth Leaves Citizens Poorer Than Global Average, Investec Says
South Africa's anemic economic growth since 2010 has left its population significantly poorer than the global average, according to Investec Wealth & Investment International. 'You can see a decoupling of South Africa's gross domestic product per capita from the rest of the world in 2010,' Osagyefo Mazwai, investment strategist at Investec Wealth & Investment International, which manages 530 billion rand ($30 billion) in assets, said in an interview.
IOL News
04-07-2025
- Business
- IOL News
How low business confidence affects South Africa's investment and job market
Investec says a stronger fiscal position would have had a positive impact on the broader population. Investec's data shows that, had growth averaged 4.5% since 2010, the unemployment rate would be significantly lower. Stronger business confidence could lead to more investment, better employment figures, and improved outcomes for both households and financial markets. Recent analysis from Investec Wealth & Investment shows that if South Africa's economy had grown in line with its emerging market peers, at 4.5% a year since 2010, nominal gross domestic product (GDP) would now be around R11.5 trillion. Currently, it is at R7.4 trillion, said Osagyefo Mazwai, investment strategist at Investec Wealth & Investment International, in a blog post. Under the higher growth scenario, the National Treasury could have collected a cumulative R5 trillion more in taxes. That would have gone some way toward funding services and reducing the debt-to-GDP ratio, said Mazwai. Investec says a stronger fiscal position would have had a positive impact on the broader population. Investec's data shows that growth has averaged 4.5% since 2010, and the unemployment rate would be significantly lower. GDP per capita, on a purchasing power parity-adjusted basis, would also be much higher. The analysis highlights several underlying drivers of growth, including business confidence, policy consistency, and structural reform. Mazwai points to a statement made by Reserve Bank Governor Lesetja Kganyago in 2019, stating: 'Restoring confidence is the cheapest form of stimulus.' Data from 1994 to 2024 shows a clear relationship between business confidence and economic performance. For example, real GDP growth averaged above 4% during former president Thabo Mbeki's second term, when business confidence was high. During the same period, the unemployment rate dropped from 28% in 2004 to 21% in 2008.
The South African
19-06-2025
- Business
- The South African
South African economy failing behinds its counterparts
The South Africa economy would be R5-trillion better off if we'd simply kept pace with other emerging countries over the last 15 years. In the last decade and a half, the South African economy has grown at an average of 1% annually. However, other emerging counterparts have grown at 1.4% or higher. This damning data was revealed by Investec's Osagyefo Mazwai. 15 years of lost growth coincides with the South African economy plowing money in State-Owned Entities (SOEs) like Eskom, Transnet and the Post Office. 'It is our proposition that the South African economy is falling behind. Had it followed a more pragmatic approach, focusing on the structural enablers of the economy, the outcomes could be much better for society,' Mazwai said in a Daily Investor report. Likewise, the South African economy displays a stark dislocation in GDP per capita. Proving that, essentially, residents are worse off than they were in 2010. The government has been ineffectual in addressing poverty, unemployment and inequality. And, per capita, the rest of the world is 50% richer than the average South African. With more money to play with, many of the country's crippling debt issues could've been avoided. Image: File As such, Investec compared the South African economy to other emerging markets over the same period. Many emerging nations have been growing at upwards of 4.5% per year. 'Had we grown at 4.5%, our nominal GDP would have been just below R12 trillion. Compared this with the actual number, R7.5 trillion, which is 35% less,' explained Mazwai. This lack of economic growth cost government revenue R800 billion in 2024 alone. And remember that the 2025 Budget impasse squabbled over a mere R75 billion from proposed VAT increases. This is an insignificant amount when one considers how much more growth our emerging-market peers have to play with. In practical terms, Mazwai explains that the missing R5 trillion would have been enough to clear nearly all of the country's national debt. Should SASSA grants be given a re-think in light of this damning data? Image: File As such, finance experts point out that Eskom and Transnet's lacklustre performance is arguably the most significant factor impeding the South African economy. Eskom is R400 billion in debt. Transnet is R140 billion in debt. Likewise, South African Social Security Agency (SASSA) grants cost the fiscus around R265 billion annually. SASSA grants, while well-intentioned, breed an unhealthy dependency on the social welfare system, reducing employment. SASSA grant beneficiaries now number 45% of all residents, and five out of nine provinces have more SASSA recipients than salaried employees. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The Citizen
02-06-2025
- Business
- The Citizen
This is where we would be if SA sustained an economic growth rate of 4.5%
It is enough to make you weep when you read how much better off South Africa could have been with economic growth of 4.5%. If South Africa had sustained an economic growth rate of 4.5% per year, in line with its emerging market peers, its GDP would have been just under R12 trillion in 2024 instead of the actual R7.5 trillion. Government revenue could also have been around R800 billion higher than it is. Investment strategist at Investec Wealth and Investment International, Osagyefo Mazwai, notes that although South Africa has grown over the last 15 years, averaging economic growth around 1% a year, the population has grown at a higher rate of around 1.3%. He points out that there has been a structural break in South Africa's economic performance compared to the rest of the world, with a stark dislocation in gross domestic product (GDP) per capita. 'In essence, people are worse off than they were in 2010, suggesting that economic policy has been ineffectual in addressing poverty, unemployment and inequality. 'On a per capita basis, the rest of the world is 50% richer than the average South African. Growth of 1% will not lead to the envisaged goals of lifting people out of poverty and meaningfully addressing the problems of unemployment and inequality.' This chart compares nominal GDP over the period with what it would have been if the South African economy grew at 4.5% a year to illustrate the point on the opportunity cost of foregone growth in policy formation and execution: ALSO READ: Experts say no way SA can achieve economic growth of 3% this year How does economic growth of R12 trillion sound? Mazwai says if the economy grew at 4.5%, South Africa's nominal GDP would have been just below R12 trillion in 2024, a significant number, especially considering the benefits that could have been derived from a vastly larger GDP. He points out that South Africa's economic growth rates similarly had an effect on government revenue. 'Government revenue in 2024 alone could have been around R800 billion higher, while just a few weeks ago, South Africa faced a budget impasse due to a shortfall in funding, needing to raise R75 billion in the medium term to cover the shortfall. 'That shortfall is insignificant considering how much more could have been raised had the economy grown more in line with emerging market peers. 'The cumulative figure of revenue foregone is scary, at around R5 trillion over the last 15 years. 'That is material, considering the fiscal constraints facing South Africa and demonstrates the need to ensure economic growth to boost the fiscal war chest and further enable the capacity of the state to deliver services.' ALSO READ: IMF's bad news about economic growth for SA, thanks to Trump tariffs What economic growth of 4.5% could have meant Mazwai says these statistics put this into perspective: The R5 trillion lost would be enough to clear almost 90% of South Africa's gross national debt and bring the debt-to-GDP ratio down to just below 10%, compared to the currently expected 77% ratio this year. Eskom needs R390 billion over the next decade for transmission lines, a fundamental pillar of creating greater capacity in the energy sector. Electricity is the backbone of any structural improvement, especially considering the government's goals to build domestic manufacturing capacity and create meaningful employment opportunities. The R390 billion would be a drop in the ocean had growth been 4.5% over the last 15 years. Transnet needs R160 billion to upgrade rail and port infrastructure. Our logistics networks are key in connecting the economy across its internal nodes, but also key in building additional capacity to meet the demands of external markets. Again, R160 billion would have been a drop in the ocean had growth been in line with our peers. Eskom has debt of R400 billion. With economic growth at 4.5%, the government could have bailed Eskom out 12 times. Transnet has a debt of R140 billion, and the government could have bailed out Transnet many times, too. Social grants will cost the fiscus around R266 billion this year. With economic growth of 4.5%, these would have been more than affordable and potentially materially higher than what marginalised citizens receive now, also considering that many more people would have been absorbed into the labour market. ALSO READ: Fourth quarter GDP improved but economists say its still not great – here's why With higher economic growth, South Africa would have functioned better Mazwai says these statistics are significant because they show how South Africa could have been in a better position to address the prevailing needs of the state. 'Granted, if the economy was growing at 4.5% the assumption is that Transnet and Eskom and some of the other structural enablers of the economy would have been functioning properly. 'The numbers indicate the potential for vastly greater capacity to invest in the productive elements of the South African economy, such as in infrastructure, education, healthcare and the salaries of teachers, nurses and doctors.' He also notes that business confidence has been unusually correlated with the performance of state-owned enterprises (SOEs) in the post-pandemic environment, and therefore, SOE reform momentum must be sustained or increased. 'Business confidence is the key leading indicator of economic growth and employment creation. The unemployment rate would be closer to around 20% compared to the current 32.9% had the economy been growing at 4.5%. 'In other words, a third of those presently unemployed, according to the narrow definition of unemployment, would have jobs.' ALSO READ: Absa foresees economic growth of 2.1%, but Trump and budget can disrupt it But there have been some victories so far for the economy However, Mazwai says none of this should detract from some of the victories seen of late, such as: The formation of the government of national unity (GNU) and subsequent political stability and increased policy certainty, although the recent budget impasse showed that these are nonetheless fragile. The increased momentum of Operation Vulindlela in addressing the various structural impediments in the economy. The next steps are critical for addressing water infrastructure and local government inefficiencies. Improvements in the electricity supply and logistics network. Mazwai says there has been some stagnation in the recovery of SOEs, which may be cause for concern, although the worst of SOE performance appears to be behind us. However, he says a reacceleration in trend improvement is important for business confidence to grow. ALSO READ: Economic activity still moving sideways but optimism increases Recovery in PMI could mean higher economic growth 'We recently saw a modest recovery in the S&P Global Purchasing Managers Index (PMI), to a neutral level of 50. There must be a trend improvement in PMIs, which are typically linked to economic outcomes. 'Should PMIs continue to improve, the economy should continue on its path of recovery. This will likely be driven by the continued success of Operation Vulindlela.' Looking at GDP projections, Mazwai says data released so far suggest that while growth was likely weak in the first quarter, a persistent upward trend in PMIs can result in a marked acceleration in growth outcomes. 'PMI improvement will largely be a function of continued improvement in SOE performance. At present, the economy, by our estimates, is tracking at 1.3% for the year, which is well above the 0.6% seen in 2024 and 0.8% in 2023. 'This can then lead to more meaningful employment creation and a trend reversal in GDP per capita from the pattern of decline since 2011.' ALSO READ: World Bank has simple answer to improve South Africa's economic growth What SA can do to keep momentum going to grow He suggests that South Africa follow these steps to keep the momentum going and put South Africa on a firmer growth trajectory:
