Alarm bells ringing for South Africa

• Investment in South Africa fell to 13.6% of GDP in the second quarter, as the public sector struggles to turn planned development into reality.
• The second quarter was a weak period for South Africa, as the country’s GDP contracted for the first time in six consecutive quarters. The contraction came amid global uncertainty around oil prices and an interest rate hike from the South African Reserve Bank (SARB), further cooling the economy. With the economic contraction, investment as a percentage of GDP was also worryingly low, at 13.6%. Business Leadership South Africa (BLSA) CEO Busiswe Mavuso said the investment percentage was at its lowest in five years.
• The business-government partnership has targeted 20% of GDP as a medium-term goal, though we have long seen 30% as the level needed to support credible economic growth.