IMF downgrading SA's economic growth outlook was expected - economists
During the week, South Africa faced a significant setback, as the IMF revised down the country's economic growth projections, warning that logistical challenges are dragging economic activity.
FILE: A man walks past the International Monetary Fund (IMF) headquarters in Washington DC. Picture: AFP
JOHANNESBURG - Economists said it was no surprise that the International Monetary Fund (IMF) almost halved its growth outlook for South Africa in 2024, given the extent of corruption and its effects in hindering economic growth.
During the week, South Africa faced a significant setback, as the IMF revised down the country's economic growth projections, warning that logistical challenges are dragging economic activity.
Adding to these woes, the country has reached its lowest-ever score on the annual Corruption Perceptions Index (CPI).
South Africa is one of the 23 countries that sunk to their lowest levels, placing it into the category of flawed democracies.
Economist Dale McKinley said South Africa has been affected by load shedding, ports, and railway challenges that reflect years of corruption.
“What we’re experiencing in South Africa is the fallout of years and years of corrupt relationships that have insinuated themselves in every track of state-owned enterprises, particularly within Transnet, Eskom, and others. That is the case, as we’ve seen.”
Economist Iraj Abedian said the latest economic outlook showed a need for comprehensive reforms to address both economic and governance issues.
“The downgrade was to be expected. The dysfunctionality of ports, rails, electricity has combined to create a very damaging and almost destructive cocktail of failures of infrastructure. The failure of infrastructure is not accidental - it’s intentional. It’s been driven by poor governance, incompetence and corruption.”