The spirit of enterprise will give rise to growth

The buck stops with government, whose policymakers should stop scapegoating and allow South Africa’s economy to flourish in a free market, writes Temba Nolutshungu of the Free Market Foundation.

- Temba Nolutshungu

South Africa’s economy is in a mess, to say the least, and this is solely and exclusively the fault of policymakers. Yet it is not beyond redemption. The overall remedy lies in simply utilising empirical evidence in the form of studies that demonstrate the close and proven correlation between economic freedom (free markets) and high economic growth, which in turn translates to increased GDP per capita, high employment levels, better education and increased lifespans: all the positive social indicators that collectively amount to a good, contented and prosperous life. The Human Freedom Index (published by the Cato Institute), the Index of Economic Freedom (Heritage Foundation and The Wall Street Journal), the International Property Rights Index (initiated by economist Hernando de Soto and involving the Property Rights Alliance) and Economic Freedom of the World (Fraser Institute and over 100 think tanks worldwide) all attest to the axiomatic, empirically verifiable connection between economic freedom and economic growth, and the positive social outcomes that emanate from this.

SOUTH AFRICA’S SLIDE

The socio-economic misery of South Africa is self-inflicted and, ipso facto, can be reversed, as illustrated in the Economic Freedom of the World (EFW) report, which is evidenced by the abovementioned studies. The EFW report ranks countries according to the measurement of their level of economic freedom. South Africa features at position 84 out of 165 countries, according to the EFW’s annual report of 2019.

After being placed 54th in 2000, South Africa’s measure of economic freedom has gone into a sorry decline, hitting 62nd in 2005 and 79th in 2010.