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cost of electricity. But this came at a big cost
as state-owned enterprises (SOEs) were
causing government to haemorrhage money.
After tough negotiations with labour over
the necessary right-sizing of SOEs, Eskom
finally privatised power generation.
South Africa decided to breach the
spending ceiling due to the reappropriation of
funds that went towards rescuing some SOEs.
The country also embarked on an investment
drive that was started by President Cyril
Ramaphosa. Investment was targeted to avoid
creating costly white elephants.
The agricultural sector saw the largest boom
and, contrary to popular belief at the time,
mechanisation did not lead to job losses.
Instead, technology assisted with productivity.
Basic education improved astronomically,
and it led to the creation of small and
medium-sized enterprises, which were
previously neglected.
Much like in Switzerland, the majority of
South Africans opted for apprenticeships
instead of going to university.
Reforms are never easy and not everyone
wins. The problem South Africa faced was
high unemployment, especially among young
people – 41% of South Africans between the
ages of 14 and 34 were not being educated,
employed or trained.
This was a risk to the future growth of the
economy. It was clear that this age group had
to be prioritised. Perhaps formal education for
this group was not the answer, so many were
trained and absorbed into the mining,
manufacturing and agriculture sectors, and
these sectors began to grow again.
Redirecting investments to the continent
also boosted South Africa’s economy, as its
historical trade partner, Europe, had
experienced low growth for a long period. This
was affecting our export market, particularly
our vehicle sector, which relied heavily on the
German economy.
THABI LEOKA
Leoka started her career as an economist at Investec
Asset Management in SA and London. She has also
worked as an emerging markets economist at
Barclays in London, as head of economic research for
SA at Standard Bank and as the chief economist for
SA at Renaissance Capital. Leoka has a PhD in
economics from the University of London, an MSc in
economics and economic history from the London
School of Economics and an MA (with distinction)
Thabi Leoka from the University of the Witwatersrand
ANGLO AMERICAN 25 REASONS TO BELIEVE 7
