Deflated Egos- South Africa within the African Economy
And finally when Pretoria starts to think
like Tswane it will also recognize the recalcitrant and ugly facts … it is now
number two in Africa and it really needs its neighbours as partners to even stay
second!
Some numbers
actually do make people and countries change their whole way of thinking about
their relations with other people as well as themselves. Take the GDP of China
as compared to that of the world’s number one economy, the USA. Economists have
spent the last few years speculating on when the day will come when China, with
its fabulous rates of GDP growth, would finally resume its rightful place as
the world’s biggest economy which it was for many centuries until European,
Japanese and American colonialism systematically plundered the country in the 19th century. When that day
comes and it will certainly come at some time between 2020 and 2030 the US will
become something that is not part of its
national psyche, it will become number two!
In Africa we
have had the same situation with South Africa and Nigeria. For years, South African officials and
politicians as well as the public, whether under apartheid or under democracy, could
take for granted that their country was number one in Africa and that anyone
north of the Limpopo was small stuff and could be taken for granted. It has
resulted in an insufferable level of hubris and arrogance in Pretoria towards
its neighbours that was painful to not only those in Botswana but throughout southern
Africa. But suddenly in early April Nigeria recalculated its GDP and overnight
its GDP went from 42 billion naira to
80.2 billion Naira. The Nigerian economy had grown 90% overnight and South
Africa was in a new position- number two in Africa!
Big
doesn’t mean Rich
Unfortunately
Nigeria has developed the reputation of being Africa’s home of ‘shonk’ and ‘dodgy
deals’ and the sudden doubling of its GDP was initially seen by many who did
not understand as something could be not possibly be accurate. However, this recalculation was not a product of
Nigerian fudging of numbers but the exact opposite, their statistics office finally
got the numbers right. The old GDP estimates were based on weightings from a 1990
base. These weights should be recalculated every 5 years to reflect the change
in the economy but statistics being what they are, i.e. a very low priority for
every government, this was not done for almost quarter of a century. In 1990
Nigeria had no telecoms, no Nollywood to speak of and no booming and aggressive
financial sector. This all changed in 20 years with a new 2010 base, lo and behold Nigeria was found to have a
larger economy than South Africa. This
meant that the usual measure of how rich a nation’s citizens are, its
GDP/capita went from USD1,500 to USD2,688 in 2013. Of course it does not mean much because South
Africa has some 53 million people and Nigeria 170 million and approximately 61%
of those Nigerians are estimated to live on less than one dollar (9 pula) per
day. This is up from 10 years ago when it was only 54%. The GDP per capita in
South Africa was US$ 5,920 and so we will have wait for a very long time before the average South
African worker would voluntarily swap places with his Nigerian counterpart no
matter how big his economy may be.
Despite the
brave face put on his country’s relative decline in economic importance in
Africa by then South African Finance Minister
Pravin Gorham you could almost hear the
South African egos deflating all the way
from Pretoria. The sound will be much more audible from Washington when China
overtakes them as the egos are much, much bigger. But like his South African counterpart the average
American worker is still a very long way from wanting to voluntarily swap
places with his Chinese counterpart.
Hiding
the Trade Numbers
Some
statistics are just so embarrassing that its better to just hide them from the
public. For years it has been impossible to get any reasonable estimate of
South Africa’s exports and imports from its SACU neighbours, Botswana Lesotho
Swaziland and Namibia i.e. the so-called BLNS. Like most commercial acts there
was a good and a real reason for why these figures were not public. The good
reason offered by South African officials is that all five SACU countries are part of a customs union i.e basically one
economy and officials in SARS could say that there was no need for SARS to
separate these numbers. In 2009, before I was blacklisted by the South African
Treasury and never again allowed to work on SACU issues, I was conducting an
agriculture study for SACU and despite desperate attempts could not get access
to South Africa’s agricultural exports to the BLNS. I was told first these did
not exist, then I was told these were confidential. Then I was told that the
data is completely inconsistent between one country and another, which is entirely
true. Given that some ZAR 20-30 billion in SACU customs revenue is distributed
to each of the 5 SACU members every year on the basis of the share of
intra-SACU imports, the fact that the trade figures should not be public in
countries that claim to be accountable for their finances seemed scandalous. But
I suspect the real reason for the secrecy is that the import statistics of the
all SACU members were so inconsistent between one country and another with SA
and Namibia, for example, never being
able to agree that the actual distribution of the SACU customs pool was in
effect not by any given formula but rather by agreement over which set of import
statistics should use.
At the SACU centenary
celebrations in Pretoria in 2010, the last SACU event to which I was ever
invited, I publicly asked why such figures are not in the public domain in four
countries that are democratic and respect the rule of law. My complaint and
that of others was finally heeded by SACU which soon after started publishing
some trade data and at the end of last year South Africa finally started to publish
detailed trade data with and without the four BLNS.
Pretoria
needs its Piddling Neighbours!
When you look
at the South African trade figures you start to understand that there was yet
another reason for keeping the figures out of public view. The trade figures
show how important Africa in general is to South Africa and just how important
the BLNS are to maintaining South Africa’s economic stability and a manageable
trade deficit. There are no full year
figures yet available on BLNS trade as
they only started late last year. What the available figures say is that for
the year from January to August 2014 South Africa’s trade deficit was a mere
ZAR70 billion. But if you exclude the SACU partners the trade deficit would have been ZAR 137 billion. In other words South
Africa on net has exported this year ZAR 67 billion to the BLNS more than it
imported and that is one of the main reasons why they agree to pay the
substantial transfers to the BLNS. South Africa’s trade deficit with every
other region of the world is subsidized by its surplus with Africa and the BLNS
countries. And that is why the South Africans fight so hard to maintain their
rail monopolies and their dominant position in Africa in general and Southern
Africa in particular. It is Africa and the BLNS and that trade surplus that
allows Pretoria to maintain its trade deficits with all the other regions with
which its trades.
It is time for
South Africa to conclude that it needs its neighbours, not just as markets but
as partners to its own economic development in which all must share- not just South
Africans. This is a position that has long been recognized by countries like
Kenya which have moved to a deep integration with its east African neighbours
in the East African Community but not by South Africa in the context of SADC.
And finally when Pretoria starts to think like Tswane it will also recognize
the recalcitrant and ugly facts … it is now number two in Africa and it really
needs its neighbours as partners to even stay second!
These are the views of the author and not
necessarily those of any institution with which he may be affiliated.
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