Low-hanging fruit lies everywhere
South Africa has never been short of potential. From our mineral wealth to our human capital, the promise of a prosperous, high-growth future seems almost tangible. Yet, despite the data repeatedly showing how small, targeted reforms could unlock dramatic improvements in growth and living standards, the country remains mired in stagnation. In a recent Foord webinar, the panellists noted that the reason is not the scarcity of ideas, nor the lack of resources — it is the entrenched political calculus that consistently chooses inertia over action.
Portfolio manager Nancy Hossack recently hosted political economist Frans Cronje on a Foord Asset Management webinar titled South Africa at a Crossroads — Power, Policy and Potential. They discussed the low-hanging fruit — policy choices — available to South Africa’s leaders to quickly kickstart growth and improvement in living standards. Frans listed some easy policy wins.
Consider the energy sector. South Africa possesses sufficient coal-fired capacity to remove the cap on growth overnight. By refitting decommissioned plants and stabilising the grid, we could secure reliable power for businesses and homes without waiting years for new infrastructure. Yet debate after debate, we debate the merits of renewables and nuclear, while Eskom’s availability factor flirts with crisis levels — and investors look elsewhere.
Similarly, South Africa’s most recent land-reform legislation contradicts the Constitution’s provision for expropriation only with compensation — the Expropriation Act allows seizure below market value. African National Congress voters are largely against expropriation, because they simply don’t trust the powers that be. By rolling back these changes, we could remove a red flag that scares off fixed capital in a country where investment rates languish at half the emerging-market average.
And then there is our empowerment framework, which taxes capital on arrival in pursuit of redistributive goals. By reframing the B-BBEE scorecards — rewarding job creation, fixed investment and export performance rather than ownership transfers — we could incentivise exactly the private-sector partnerships that will drive sustained job growth and equip millions to join the middle class.
Each of these interventions costs next to nothing, requires no herculean state-capacity building and could be implemented within the next parliamentary term. In private conversations, even senior government figures concede these reforms are logical and broadly popular. Yet week after week, policy discussions circle back to ideological posturing rather than pragmatic solutions.
Why reform falters
The obstacle is structural, as Frans notes. The ANC’s Executive Committee — eighty members deep — is so factionalised that decisive action becomes impossible without a strong, reform-minded leader willing to override consensus. Instead, policy becomes hostage to the lowest common denominator, and every bold proposal is diluted into bureaucratic limbo. Meanwhile, the Democratic Alliance, while capable of sound technical policies, lacks the parliamentary heft to force change without coalition partners.
This paralysis feeds public cynicism. Business and consumer confidence metrics remain stuck near half their historical peaks, and growth hovers around 1% per annum — far too low to tackle South Africa’s unemployment crisis and burgeoning public debt. Yet, if confidence recovers even moderately, GDP growth could lift to 3–4% within a few years — putting South Africa back firmly on the global emerging-market pace.
A sceptic’s outlook
South Africa’s frustration because of policy booms that never materialise is understandable. The data offered by political economist Frans Cronje is compelling: South Africa is, in effect, the world’s largest patch of low-hanging fruit. However, evidence alone does not translate into change. The lack of political will — a reluctance to risk short-term factions for long-term gains — means this fruit continues to spoil on the tree.
Yes, there are reasons for cautious optimism. The GNU arrangement has shown that coalition partners can work together without resorting to street violence. Public polling suggests voters embrace pragmatic, centrist values across class and race — and they want the GNU to succeed. And South Africa’s geostrategic position at the tip of Africa offers an unprecedented opportunity to forge a transatlantic investment pact with the United States — an initiative that could inject billions into infrastructure, energy and skills development. Yet these opportunities will remain theoretical until our leaders overcome structural inertia.
Picking the fruit
South Africa’s future does not require moonshots. It needs straightforward laws, clear incentives and the courage to pursue reform, even if it upsets entrenched interests. Burn the coal fleet’s dead weight. Safeguard property rights. Reward real investment rather than box-ticking ownership. Nothing here demands a radical overhaul of our democracy — only the political will to match the people’s aspirations.
Too often, we mistake stagnation for stability. True stability comes when citizens see tangible improvements in their lives: reliable electricity, secure property, and a job that pays more than subsistence wages. South Africa sits on a garden of opportunity — we only need to reach out, pluck the fruit and finally turn potential into prosperity.