SANISHA PACKIRISAMY: Why South Africans are too gloomy

The optimism paradox, as the World Economic Forum describes it, is the gap between private hope and public despair.

It’s a dangerous misconception, since our personal prejudice can guide us into believing South Africa is swiftly descending into failure, and shut our eyes to anything positive happening in the country.The reality is that while South Africa emerged from the pandemic on a weaker socioeconomic footing, the realised growth of 4.9% for last year was more than 2½ times higher than the most optimistic prediction made in the Reuters economic consensus survey, when the country entered lockdown.

Not only did this strengthen South Africa’s post-pandemic rebound, it also allayed fears of a looming debt crisis. Instead, higher commodity prices helped curb South Africa’s projected budget deficit by R133bn for the current fiscal year, leaving the expected debt ratio at a less hard-to-swallow 71.4%.This unexpected commodity windfall also bolstered prices at which we sold exports, relative to prices paid for imports, leaving the country in a less vulnerable external position. It means our fiscal deficit has fallen from a risky 7.3% of GDP in 2019 to an expected 3.7% of GDP this year.

Even at home, the metrics show South Africa still boasts a relatively competitive domestic economy. In 2021, the country emerged as the top-ranked emerging market for global business offshore services in the GBS world competitiveness index. This sector grew twice as fast as the global average in 2019, promoting South Africa’s value proposition to targeted markets.Now, nobody is suggesting corruption is somehow under control.

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