Cause of the Economic Decline in South Africa. What to Expect in the Next 10 Years from now?

Abstract

This paper provides an analysis of the causes of the economic decline in South Africa and what to expect in the next ten years. The economy of South Africa has not improved in the past few years and the government had to borrow money from international financial institutions to provide public services. The objective of this study is to show and unpack the factors that lead to economic decline. The secondary objective of the paper is to show how the government's failure to mitigate the situation will affect the country in the next ten years or more. This study applied cohort analysis and time series analysis to analyze the existing secondary data. The study found that the South African government has not been able to catch up with the factors that affect economic development. The government has not been prepared enough to deal with challenges and design programs to fight against factors that affect the economy. Amongst the factors that the study found to be key include load shedding caused by the shortage of electricity supply, strikes, Covid-19, KwaZulu Natal floods, fuel prices, and global trends. The study concludes that the government of South Africa will not be able to change the situation because of the forever-growing interest on the government debt which has to be repaid by the government through a tax that is paid by the consumers.