The University of Pretoria (UP) hosted the launch of the 13th bi-annual South African Economic Update report, produced by the World Bank. The report looks at the state of South Africa’s economy, focusing specifically on the impact of the COVID-19 pandemic on the economy and the job market.
Hosted online from UP’s Future Africa institute and campus, the report launch was accompanied by a discussion by leading thinkers and stakeholders in the World Bank and the country.
Some of the South African Economic Update’s highlights include:
- Despite the country’s economy being weakened further by the pandemic, the government’s response was sound;
- GDP growth is expected to reach 4% by the end of 2021 and slow to 1.5% by 2023;
- The COVID-19 pandemic is widening the inequality gap due to job losses, especially among the country’s poorest people;
- Young entrepreneurs are the country’s hope for creating new jobs.
Speaking at the launch, UP Vice-Chancellor and Principal Professor Tawana Kupe said the university is proud to be working in partnership with the World Bank with the aim of helping South Africa fulfil its development agenda.
“The University of Pretoria appreciates the partnership we have with the World Bank as we work together in our unique capacities to support South Africa to fulfil its development agenda and contribute to ending extreme poverty, promoting shared prosperity and growing an inclusive economy,” Prof Kupe said. He added that despite the challenges created by the pandemic, this may be the moment during which South Africa and the African continent are able to make the necessary changes.
Marie Francoise Marie-Nelly, World Bank Country Director: Southern Africa, shared that part of the World Bank’s activities included creating platforms for global knowledge, global analysis, and informing policy debates in middle-income countries. “We share our knowledge in different ways, one of these being with flagship reports such as the South African Economic Update,” Marie-Nelly said.
The report indicates that the pandemic has made South Africa’s bad employment situation worse. “By the end of 2020, despite two quarters of employment growth, the number of people with jobs had fallen by nearly 1.5 million, and wages had fallen by an average of 10 to 15% for workers who still had jobs. Combining employment and earnings losses, the average working-age South African was about 18% worse off at the end of 2020 than on 1 January 2020,” the report reads.
The report also found that South Africa is currently experiencing the deepest recession since the end of apartheid. “Gross domestic product (GDP) shrunk by 7% in 2020, more than almost all other emerging economies. Falling GDP and fiscal revenues, and a sizeable relief package, led the fiscal deficit to increase to 12.9% of GDP and public debt to reach 78.8% of GDP. Unlike advanced economies that can service debt at low interest costs, South Africa’s debt service burden is now close to 5% of GDP. This crowds out resources for much-needed developmental spending, including public investment,” the report reads.
Panellists included Trudi Makhaya, Chief Economist in the Presidency; Dr Adrian Enthoven, Business Leadership South Africa Executive; Heinrich Bohlmann, UP Associate Professor in the Department of Economics; and Tessa Doom, National Planning Commission Youth Commissioner and Director of Jasoro Consulting. The session was hosted by conversation strategist Nozipho Tshabalala.
To watch the full panel discussion visit the UP YouTube page here