Thabo Mbeki stands out as the best in terms of economic growth and fiscal management. Jacob Zuma and Cyril Ramaphosa have been terrible. From Moneyweb.
There’s no question that former president Thabo Mbeki was South Africa’s best-performing leader based on measures such as economic growth and sound fiscal management.
He surpasses Nelson Mandela who came before him, and those who succeeded him. Using other measures such as social progress in delivering houses, schools and healthcare to the poor, Mandela stands head-and-shoulders above the rest.
The chart below shows economic growth reaching 5.6% in 2007 under Mbeki – the highest in 30 years – helped by a commodity boom, massive infrastructure spending ahead of the 2010 World Cup, highway expansion, the Gautrain, and a property bonanza.
Using social metrics such as housing and access to electricity and water, Mandela emerges as SA’s best president of the last 30 years, with 1.5 million houses built under his administration and the number of households with access to electricity expanding from 50% to 70%.
Access to electricity grew to 80% under Mbeki, whose policies favoured growth over equity.
What’s not reflected in the above graph is unemployment, which hit 31% in 2003 but declined to 23% by 2008 as growth hit 4%-plus for several successive years before collapsing in the 2008 financial crash.
The number of people employed grew 41% to roughly 17 million since 2000, interrupted by the 2008 financial crisis and Covid in 2020. That sounds decent, but it isn’t, given that roughly 17 million are currently classified as economically inactive.
Perhaps the most telling measure is debt-to-GDP, which illustrates the frightening growth of the state and its claim on the wealth of the country.
This is where Mbeki (and his finance minister, Trevor Manuel) displayed remarkable discipline, reducing debt-to-GDP to a low of 27.3% in 2008 before Jacob Zuma and his entourage entered the picture.
The Zuma era was the era of state capture, the Guptas, massive bailouts for looted state-owned companies, and general disregard for any kind of accountability and fiscal discipline.
Also worth noting is that under Mbeki and Manuel, the budget deficit was reduced from about 4% to zero. That worked like a charm with international financiers but infuriated elements within the ANC eager to get their hands on the dosh. Zuma was their man, and Mbeki had to go.
Under Zuma, unemployment rose to 27.5% with virtually no change in income inequality. Housing delivery was weak while electricity reliability collapsed due to corruption around Eskom.
The graph above shows that the trends established in the Zuma years continued under Cyril Ramaphosa, with debt-to-GDP shooting above 80% (it has since moderated a bit), accelerated by Covid and a massive expansion of the welfare state and government spending.
Government borrowed what it couldn’t raise in taxes, displaying none of the spending restraints imposed on ordinary South Africans by the state’s expansion.
By 2024, the number of people receiving social assistance had grown to 26 million, from around 14 million in 2010.
The Social Relief of Distress Grant was introduced in 2020 as a response to Covid and extended to 2026 as a way to take the edge off crippling unemployment.
Most of this welfare increase came in the Ramaphosa era, in part as a response to Covid. What was intended as a temporary measure has been extended several times and is starting to look like a permanent feature of the country’s fiscal burden, prompting panicked calls for structural reforms to kick-start serious growth and reduce unemployment.
So far, there is little sign of that.
Who did best to reduce income inequality?
Income inequality is measured by the Gini coefficient on a scale from 0 to 1 – where higher values indicate higher inequality. This is virtually unchanged over the last 25 years, starting at 0.66 in 2000 and estimated by the World Bank at 0.67 in 2024.
The Gini coefficient has serious limitations as a measure of inequality since it does not reflect increases in absolute income levels or non-income measures such as access to clean water and healthcare. The Gini measure is not particularly useful since it does not show progress in addressing racial inequities from the past.
Read: SA’s rising inequality and how to fix it
Black economic empowerment (BEE) policies have had limited impact, with figures suggesting about a third of top management roles are occupied by blacks, despite accounting for 80% of the population.
The black middle class, at around seven million, is more than double the size of the white middle class – a vast improvement since Mandela’s time.
What about foreign direct investment (FDI)?
This one is particularly alarming, as shown in the graph below.
It is a useful measure of foreigners’ perception of SA as a home for capital.
What stands out is how the rest of sub-Saharan Africa is pulling away from SA by crafting policies that are more business friendly.
The 2014 bump in FDI under Zuma was largely the result of a commodity boom, while Mbeki’s era was marked by infrastructure, property and mining investment.
The 2021 spike in FDI shown below is an anomaly created by the Covid disruption to business and trade, with many businesses postponing projects.
FDI in US$ – sub-Saharan Africa v South Africa
What about unemployment?
When Mandela assumed the presidency in 1994, unemployment at 20% was already considered way too high. It rose to 25% by 1999 as former bantustans were reintegrated into the country, and economic growth was unable to support the number of new entrants to the market.
Unemployment jumped to 31% in 2003 but fell under Mbeki to 23% – though youth unemployment remained stubbornly high above 50%. The figure worsened under Zuma, rising to 27.5% by 2018, with labour growth averaging 1.6% a year, far below the labour force growth rate.
Things got even worse under Ramaphosa, with unemployment hitting 31.9% in 2024 and youth unemployment at nearly 60%.
Ramaphosa launched Operation Vulindlela with the aim of improving the business environment, but has made little progress so long as structural constraints like logistics and load shedding persist.
The corruption and decades of neglect at Eskom and Transnet (under all presidents) had come home to roost. The Council for Scientific and Industrial Research (CSIR) estimated in 2023 that load shedding had deprived the economy of R2.9 trillion since 2007, with 2023 losses alone coming in at R481 billion – equivalent to nearly 7% of GDP.
Logistics consultancy The Gain Group estimated in 2023 that rail and port failures cost SA R1 billion a day in economic output, equating to R353 billion annually or 4.9% of GDP.
The failure of SA’s key chokepoints (electricity and logistics) is an indictment of every government going back to Mandela.
The warnings were there 30 years ago, but each president had more important things on their mind or chose to ignore them.
During Zuma’s time, it was a free-for-all as the procurement budgets and treasuries of state-owned companies were pillaged under the cover of “transformation”.
There have been improvements under Ramaphosa – load shedding is largely gone and rail performance at Transnet is improving – but he’s done little to inspire trust from investors, nor has he found the spine to pursue his colleagues named in the Zondo reports for state corruption.
And he continues to introduce legislation, such as the National Health Insurance and the Employment Equity Amendment Act, that terrifies business owners and could end up as an epitaph on the ANC’s tombstone.
Finally, the ZAR as a proxy for foreign sentiment, as shown below. All in all, not good.
ZAR/USD exchange rate under different presidents
