Goldman Sachs: SA could do better

Goldman Sachs says South Africa has made massive progress since 1994, but serious challenges remain.

Goldman Sachs South Africa head Colin Coleman the Talk Radio 702 studio on 4 November 2013. Picture: Sebabatso Mosamo/EWN.

JOHANNESBURG - Ahead of the twentieth anniversary of democracy next year, Goldman Sachs on Monday released a report titled 'Two decades of freedom: A 20-year review of South Africa', a breakdown of the country's economic progress since 1994.

The investment bank's South African head Colin Coleman says the report, which took six month to compile, is aimed at balancing South Africans' views on the country's economic status.

"We are concerned at the level of emotion and negative sentiment around South Africa in the short-term, so we thought that looking back over a longer term perspective would give some balance to the debate."

Coleman says major gains have been achieved in the two decades, but could do better.

"We had a golden period of growth; 3.6 percent from '94 to 2007 - up to the global financial crisis - inflation fell to six percent and we managed to bring about 10 million people into the middle class.

But the report also warns that a number of challenges remain, such as a stagnant unemployment rate, high debt and inequality, as well as the effect of tense labour relations on some industries.

Goldman Sachs says if South Africa aims to lift its growth rate to five percent, it will need to attract R50-R100 billion a year in foreign direct investment from R19 billion over the last two decades.

"This will require a much more determined and coherent focus on improving the investment climate," Coleman says.

He says government and business need to work together to overcome the remaining challenges, adding, "This is not a time for finger pointing."



  • GDP almost tripled from $136 billion to $385 billion.

  • Inflation fell from a 1980-1994 average of 14 percent to an average of six percent from 1994-2012.

  • Tax receipts of R114 billion from 1.7 million people rose to R814 billion from 13.7 million people.

  • In the last decade, a total of 10 million consumers were added to the middle to higher economic classes.

  • Social grant beneficiaries rose from 2.4 million to 16.1 million people.


  • Unemployment remains stagnant at 25 percent from the 23 percent inherited in 1994.

  • 70% of the unemployed are youths, aged between 15 and 34.

  • 85 percent of Africans remain in the lower income categories while 87 percent of white people remain in the middle to upper class categories.

  • The current account deficit of 6.5 percent is one of the highest among global peers.

  • The contribution of mining and manufacturing to GDP has fallen to 23 percent from 38 percent in 1986.

  • Household debt to disposable income soared from 57 percent in 1994 to 76 percent.

To view the full report, click here.

To listen to Bruce Whitfield's full interview with Coleman on 567 CapeTalk/Talk Radio 702, click here.