2021

The report provides a comprehensive analysis of:

• Changes in business conditions across various industries
• Business and consumer confidence 
• Energy supply constraints
• The labour market

Key takeaways:

• Household consumption expenditure, at 59.9% of the gross domestic product (GDP), is a key driver of South Africa’s economy.
• Consumer confidence recovered slightly in the first quarter of 2021 but remains very low.
• Debt levels are rising, with households increasingly struggling to meet their debt obligations.
• Household spending has diminished, as seen in poor retail and new vehicle sales.
• Online activity remains strong, despite the easing of lockdown restrictions.

Key takeaways:

• Basic education expenditure accounts for 70% of all education spending.
• Only half of grade 1s make it to grade 12 in the minimum time.
• Only a third of schools have a computer facility, merely a quarter have a library, and just a fifth have a laboratory.
• Pupils in Quintile 1 schools (the poorest) are six times more likely to fail maths than those in Quintile 5 (the most well-off).
• University enrolment increased by 88.7% between 1995 and 2018.
• Rates of completion are lowest for doctoral qualifications, at 13.5%.
  
  

In this month’s edition we unpack Finance Minister Tito Mboweni’s 2021 National Budget and identify the risk of South Africa’s deteriorating fiscal position.  

Key takeaways:

• The government expects economic growth of 3.3% for 2021, stabilising at 1.6% by 2023.
• It expects to collect revenue of R1.52 trillion, or 28.4% of GDP in 2021/22.
• Expenditure is expected to reach R2.02 trillion in 2021/22.
• The government therefore expects a main budget balance of -R482.6 billion in 2021/22 or -9% of GDP.
• The consolidated budget balance is -R500 billion or -9.3% of GDP.
• The government expects a debt-to-GDP ratio of 81.9% in 2021/22, rising to 87.3% by 2023/24.
• Debt service costs amount to R269.7 billion (17.7% of revenue and 13.3% of expenditure).
• The budget deficit amounts to R1.4 billion being borrowed every day for the year 2021.

The report identifies social and economic indicators where the country underperforms and what must be done to improve the lives of all South Africans.  

Key takeaways:

• The Quality of Life (QOLI) Index draws comparisons between South Africa’s nine provinces and between the different race groups.
• Ten indicators are used to calculate the QOLI Index scores.
• The best quality of life is in the Western Cape province, with a QOLI score of 6.5.
• The worst quality of life is in the Eastern Cape and Mpumalanga provinces, each with a QOLI score of 5.0.
• White South Africans have the best quality of life, followed by Indian/ Asian, Coloured and Black people respectively.