Andre de Ruyter warns South Africa is on the edge of collapse

South Africa is locked in a downward spiral, with an unemployment crisis, surging government debt, and rising crime threatening to plunge the country into turmoil, last seen at the end of Apartheid. 

This is the warning from former Eskom CEO Andre de Ruyter at the second BizNews Investment Conference last week. 

De Ruyter said there appears to be a repeat of the circumstances that led to the end of Apartheid in South Africa in recent years. 

This extends from lacklustre economic growth, a looming financial crisis, rising crime and political violence, and increasing international pressure. 

De Ruyter outlined the myriad of factors that led him to draw this conclusion in the opening of his speech at the conference. 

“South Africa is in crisis. The economy shows no sign of meaningful growth, investor confidence is sinking, the currency is beleaguered, and government debt is ballooning to unsustainable levels,” De Ruyter said. 

“Our relationship with the United States has taken a significant turn for the worse. Geopolitical forces beyond our control force us to find new markets.” 

“Civil unrest is destabilising our cities and our towns. This is everywhere. It is not just in Gauteng. Political murders are an all too frequent event.” 

De Ruyter also pointed out that South Africa is the most unequal country according to the Gini coefficient, creating widespread desperation. 

The country’s unemployment crisis has also led to a significant number of young South Africans not having a stake in the economy or being active participants in society. 

“Crime, a problem that has always been pervasive, has become increasingly violent. Prominent activists and lawyers are murdered without impunity,” De Ruyter said. 

“Senior police officers make startling disclosures about political interference in their work and the misuse of the police for political ends.” 

“There are dark rumours of plots and coups. The military seems to grow restive under the yoke of civilian control.” 

This has resulted in many South Africans leaving the country, creating a substantial skills crisis and a loss of talent. 

De Ruyter also said that long-standing government policies appear to be failing to grow the economy and are increasingly challenged by longstanding allies. 

“If you think I am talking about 2025, you are sadly mistaken. I am talking about 1989, which is exactly when these conditions prevailed.”

“The picture that I have painted is the one that immediately preceded the end of Apartheid.”

South Africa on the edge

De Ruyter explained that this picture can give South Africa hope, despite the obviously negative factors at play in the country. 

The hope comes from the country’s ability to navigate its way through the crises of the early 1990s and emerge as a democratic nation with far faster economic growth. 

Post-1994, there was a large and rapid increase in the basic living standards of many South Africans, with faster economic growth coupled with improved service delivery. 

The share of households without electricity declined sharply from 49% in 1996 to 19% in 2006, while the number of people employed nearly doubled from 7.48 million to 14.5 million. 

Another improvement for many South Africans was the rapid growth of the state’s welfare system, as the number of people receiving social grants shot up from 2.4 million in 1996 to 14.9 million in 2010.

“In some way that may give us hope, because that means we can pull back from the brink once again,” De Ruyter said. 

However, De Ruyter said that in 1989, larger global factors were also at play that drove the political change necessary in South Africa. These factors may not replay while South Africa stumbles towards disaster. 

“If you cast your mind back, the Berlin Wall had just fallen, and it was clear that South Africa could no longer get a free pass based on its opposition to communism,” De Ruyter said. 

The National Party government effectively lost the support of its international allies overnight and, coupled with internal pressure and economic decline, was forced to implement drastic change. 

Thus, while comparisons can be drawn between 1989 and the present day within South Africa, the global factors are somewhat different. 

Due to its lacklustre economic growth and strategic missteps, South Africa has become largely irrelevant on the global stage. 

The attention given to the country by the Trump administration in the United States should not be wasted to reshape South Africa’s global image and the use the attention to drive meaningful improvements.