Analysing the Current State of the Nation
Listen to the CapeTalk interview here: SONA unpacked: Navigating unemployment and economic prospects
With the State of the Nation address due to be delivered by President Ramaphosa this Thursday, Eighty20, South Africa’s leading consumer analytics and research firm has released an overview of the actual state of the nation with key statistics to paint the full picture, all of which are key areas of service delivery and impacts all South Africans.
Using the high-level Census 2022 results released last year compared with Census 2011, a few areas highlighted by Eighty20 includes:
Unemployment: For the year 2011 when the previous Census was released, the unemployment rate moved between 24% and 26%. Unemployment is currently almost 32%. The expanded unemployment rate (which removes those who have given up looking for a job) was between 34% and 36%, now it is over 41%.
Education: The literacy rate has gone up from 79% in the 2011 Census to 85% in the 2022 Census. One could argue that access to educational materials has increased dramatically with internet penetration increasing to 79% in 2022 from 35% in 2011. The Matric Pass Rate has shown a steady upward progression from 53.4% in 1995, to 70.2% in 2011 and 82.9% this year, although these figures can be misleading depending on the denominator.
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Electricity: Despite the ongoing and worsening energy crisis, an area of success over the past decade is access to electricity. The percentage distribution of households using electricity as the main source of energy for lighting grew from 85% of the population in 2011 to 95% in 2022. While 1% currently claim to use solar, the industry estimates are as many as 8% of households have solar panels. A recent Moneyweb article writes that the state power utility is currently producing approximately the same amount of electricity it produced 23 years ago.
Water: Piped water inside a dwelling has gone up from 4% to 60%, with the number of people who do not have access to piped water remaining stagnant at 9% for the last decade. Almost half of households in South Africa reported experiencing water interruptions for two or more consecutive days.
Housing: The proportion of people living in formal dwellings has gone from 78% to 89%, while those in informal housing has dropped from 14% to 8% (this percentage has halved since 1996). Those living in traditional dwellings dropped from 8% to 3% over that period.
Progress since last year’s SONA
In the 2023 SONA President Ramaphosa emphasised load shedding, unemployment, poverty, the rising cost of living and crime as the top concerns for South Africans. A year is perhaps not long enough to see significant progress, but nevertheless, it is interesting to note how the situation has changed over the last year.
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Load shedding: President Ramaphosa took the surprising route of declaring a national state of disaster to respond to the electricity crisis and its effects in his SONA speech a year ago. There was a myriad of other initiatives, including the restructuring of Eskom, that have not yet made an impact on the energy crisis. There were rolling blackouts for 90% of the days in the year in 2023 (335 days, up from 200 in 2022, and ‘only’ 75 in 2021). The economic cost of the energy crisis was estimated at more than half a trillion rand in 2022, with the economic cost over the last year likely to be significantly more.
In the 12 months prior to SONA 2023, there were 235 days where load shedding was in effect. In the 12 months since the declaration of the ‘state of disaster’, there have been 326 days of load shedding, a 39% increase.
Education: In 2022, 725,003 students wrote matric with 580,555 passing. This equated to a pass rate of 80.1%, up 3.7% from the previous year. 2023 showed a further 2.8% improvement to an 82.9% pass rate with 691,173 writing and 572,983 passing. It is important though to look at the matric pass rates in light of drop-out rates, despite a better pass rate, fewer students actually made their way through the schooling system in 2023. In 2022 the drop-out rate was 31.8%. For 2023, the drop-out rate increased significantly to 36.1%.
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Unemployment: According to the Labour Force Survey, the unemployment rate has come down from 32.9% to 31.9% since last year’s State of the Nation. The unemployment rate for the 10.2 million people aged between 15 and 24 years old, however, is at an alarming 58%.
Poverty & Rising Costs: This is another area where the President may claim success, with the inflation rate hovering around 7% this time last year, it is now down to 5.2%. But while the rate of inflation is back in the target range, fuel and basic food costs are still at record highs. Year-on-year: The Pietermaritzburg Economic Justice and Dignity research finds the average cost of the Household Food Basket increased by R407.44 (8.3%) to R5 324.86 in the past 12 months. Eighty20’s Q3 Credit Stress Report found that year on year, total credit card debt is up 9.5% down from the double-digit growth experienced over the past two years – peaking at almost 15% in 2022 Q2, but still worrying.
Crime: There is no new crime data to compare against 2022, but crime has topped the BrandMapp 2023 list of “Which of the following things keep you awake at night?” for the past four years, although this year ‘Corruption’ replaced ‘Rising food and energy costs.’
“The President’s focus last year on load shedding, unemployment, poverty, the rising cost of living and crime seems to have delivered a mixed bag of results. These areas of focus will require many years of successful interventions before the country realises the benefits. Covid certainly set many things back, but our hope is the government can start to turn some of these metrics around, maybe with effective private sector partnerships, to build a better society for all,” concludes Eighty20.