{"id":94463,"date":"2025-12-19T16:53:08","date_gmt":"2025-12-19T16:53:08","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade"},"modified":"2025-12-19T17:35:51","modified_gmt":"2025-12-19T17:35:51","slug":"one-decision-cost-south-africa-a-decade","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade","title":{"rendered":"One decision cost South Africa a decade"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>The firing of Finance Minister Nhlanhla Nene on 8 December 2015 marked the beginning of what many have termed a \u201clost decade\u201d for South Africa.<\/p>\n

This decade has seen an average annual economic growth rate of 0.8%, the government\u2019s debt as a share of GDP rise to over 77%, and debt-servicing costs cross R1 billion a day.<\/p>\n

Some analysts point to earlier moments when describing South Africa\u2019s lost decade, such as the state\u2019s last full budget surplus in 2007\/08, the 2010 FIFA World Cup, or the election of Jacob Zuma as president on 9 May 2009.<\/p>\n

Symmetry chief investment strategist Izak Odendaal explained that the firing of Nene and his replacement with Des van Rooyen was the moment when alarm bells really began to ring.<\/p>\n

\u201cIt was the moment when both local and international investors realised, without doubt, that something was fundamentally wrong,\u201d Odendaal said.<\/p>\n

Odendaal admitted that some of what went wrong in South Africa throughout the lost decade was due to global factors, such as volatile commodity prices, a strong dollar, capital outflows from emerging markets, and the pandemic.<\/p>\n

\u201cHowever, this was severely compounded by bad policy choices, deteriorating governance, rising systemic corruption, and the hollowing out of institutions meant to check the abuse of power,\u201d he said.<\/p>\n

\u201cThis cast a long shadow over financial markets and the broader economy suffered in tow. In that regard, the ten-year anniversary of \u2018Nenegate \u2018 is significant and provides a marker to date the lost decade.\u201d<\/p>\n

This event had one positive in that it signalled the beginning of the end for President Zuma and the era of State Capture.<\/p>\n

\u201cWhen he fired Finance Minister Nene for resisting the looting of the fiscus on 8 December 2015, the market reaction was fierce,\u201d Odendaal said.<\/p>\n

\u201cBond prices crashed, causing a spike in government borrowing costs, and the rand slumped. Zuma was forced to backtrack on the appointment of Des van Rooyen as Nene\u2019s replacement.\u201d<\/p>\n

Odendaal said the so-called \u201cbond vigilantes\u201d played as big a role as any other group to undermine Zuma\u2019s power and remove him from office.<\/p>\n

South Africa was not only downgraded by ratings agencies after Nenegate, but it was also instantly downgraded by the markets and started trading at a discount to its peer countries.<\/p>\n

A very distinct gap opened after Nenegate that persisted for the subsequent decade. Covid hit South Africa particularly hard, and the gap widened again in 2022, even as reforms were underway.<\/p>\n

The consequence of earlier mismanagement, notably loadshedding, a logistics crisis and elevated government debt levels, proved to be persistent.<\/p>\n

Source: Symmetry\u2019s Izak Odendaal<\/p>\n

From zero to hero<\/b><\/p>\n

South Africa appears to have turned the corner on this lost decade, with significant reform of key economic sectors and improved state finances driving improved fundamentals.<\/p>\n

Reforms in the electricity and logistics sectors, which focus on increasing private participation in these sectors, have borne fruit and are beginning to drive an economic recovery.<\/p>\n

South Africa has not experienced severe load-shedding since early 2024, and the performance of Transnet\u2019s ports has stabilised and begun to improve.<\/p>\n

The private sector is also set to play a much larger role in logistics, with companies set to operate key rail corridors and specific terminals at South African ports.<\/p>\n

This is expected to increase efficiency and unlock billions in investment from the private sector, which is sitting on a R1.8 trillion cash pile.<\/p>\n

These reforms have been coupled with fiscal consolidation, which is a painful process of raising tax revenue and limiting government spending.<\/p>\n

This process is beginning to bear fruit, with the government on course to post its third consecutive primary budget surplus in the current financial year.<\/p>\n

Odendaal said this is not a turning point in fiscal policy, but a turning point in investor perception of South Africa as a country with runaway debt.<\/p>\n

South Africa is set to record a wider primary budget surplus of 0.9% of GDP in the current financial year, with this widening to over 2% in the next three years.<\/p>\n

This means the government is bringing in more revenue than it is spending, excluding debt-servicing costs. It is on track to do this for three years in a row.<\/p>\n

A primary budget surplus will result in the government\u2019s debt pile stabilising at 77.9% of GDP in the current year before gradually beginning to decline. In effect, it halts growth in the debt pile.<\/p>\n

With faster economic growth forecasted, the picture should improve further as Godongwana\u2019s department remains dedicated to driving reform through Operation Vulindlela.<\/p>\n

Coupled with a lower inflation target, the government\u2019s debt-servicing burden should ease, freeing up more capital to spend on productive areas of the budget or pay down its debt.<\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. The firing of Finance Minister Nhlanhla Nene on 8 December 2015 marked the beginning of what many have termed a \u201clost decade\u201d for South Africa. This decade has seen an average annual economic growth rate of 0.8%, the government\u2019s debt as a share of GDP rise to over 77%, and debt-servicing costs […]<\/p>\n","protected":false},"author":84,"featured_media":94462,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[275],"class_list":["post-94463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-south-africa-2"],"yoast_head":"\nOne decision cost South Africa a decade - South Africa<\/title>\n<meta name=\"description\" content=\"The firing of Finance Minister Nhlanhla Nene on 8 December 2015 marked the beginning of what many have termed a \u201clost de ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"One decision cost South Africa a decade\" \/>\n<meta property=\"og:description\" content=\"The firing of Finance Minister Nhlanhla Nene on 8 December 2015 marked the beginning of what many have termed a \u201clost de ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-12-19T16:53:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-12-19T17:35:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/12\/sm_1766153091.505811.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"723\" \/>\n\t<meta property=\"og:image:height\" content=\"381\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"One decision cost South Africa a decade\",\"datePublished\":\"2025-12-19T16:53:08+00:00\",\"dateModified\":\"2025-12-19T17:35:51+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade\"},\"wordCount\":791,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/12\/sm_1766153091.505811.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-decision-cost-south-africa-a-decade\",\"name\":\"One decision cost South Africa a decade - 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