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South Africa, an economic giant in Africa, is struggling to stabilize a reeling economy after state-owned entities failed to deliver.

 South Africa, an economic giant in Africa, is struggling to stabilize a reeling economy after state-owned entities failed to deliver.

By: Mohamed Kosow Salat 

The South African economy is on the verge of collapse as unemployment rises, the tax base stagnates and more people depend on the state for their survival.

The country has an abundance of natural resources and seems that corruption, nepotism, and favoritism have marred the state infrastructure and plunged the country's economy to its knees.

However, ecomomists have warned about the weak SA Rand and the bailout of Eskom and SAA could drain the country.

Eunomix CEO Claude Baissac noted that relative to the size of the economy, the country has a rapidly growing population. Meanwhile, employment had remained flat and the number of people in need of social benefits was on the rise.

South Africa's economic growth is expected to slow to 1.9% in 2022, according to Finance Minister Enoch Godongwana.

Addressing MPs, Godongwana said this level of growth is "too low" to support the country's development goals. “As a result, we need to take action to put our economy on a higher growth trajectory,” he said.

The project is down significantly from 4.9% in 2021. The forecast, according to the National Treasury, is a response to global and national shocks. Average growth of 1.6% is expected from 2023 to 2025.

The previous administration led by Jacob Zuma was accused of giving government contracts to two Indian businessmen called Guptas who ruled Zuma's government behind the curtain.

 The former President was accused of misuse of state property, money laundering, and stealing $15 million which he renovated in his residential houses in Nkandle. 

International investors, skilled workers, and people with money are moving out of the country and investing their money in other countries.

Many South Africans are anxious about their future and some of them predict that South Africa is following in the footsteps of Zimbabwe, which was the bread basket of Africa.

The current South African president,  Cyril Ramaphosa has been accused of hiding $15 million. This money was discovered when thieves broke into Phala Phala farm and stole $15 million.

South African tax authorities have been closely tracking the source of the money.

The president repeatedly quoted saying that the cash stolen is from the sale of livestock business owned by the president.

South Africa's ailing economy started a decade ago when Zuma came into power. The country's biggest power supplier is in a bad condition with an aging network coupled with mismanagement and rampant corruption making the continent's largest industrial power station fail to supply power to the country.

All those internal factors made International investors pause their investment in the country and reconsider South Africa's economy.





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