South Africa’s GDP per capita growth has been zero while other countries blossomed

If South Africa continues on its current trajectory of per capita GDP growth, South Africans’ current living standards will remain unchanged for an entire generation.

Over the past decade, South Africa’s GDP per capita growth has averaged near zero per cent, in contrast to other emerging markets that have managed to double their citizens’ living standards.

This was revealed in a recent research note from the Bureau for Economic Research, prepared by Stellenbosch University’s chair of economics, history, and policy, Professor Johan Fourie.

This research note compared the trajectories of post-transition reforms across various countries, including Poland, Chile, India, Germany, and Argentina, with those of South Africa’s.

All of these countries experienced significant political contestation when they embarked on post-transition reforms, with varying outcomes.

“All five cases experienced growth accelerations. What separated them was what happened next,” Fourie said. 

“In Chile, Poland, India, and Germany, the political settlement proved durable enough to sustain growth and – critically – to translate it into substantially lower unemployment.”

In contrast, he said Argentina saw the settlement unravel as reforms were reversed, institutions weakened, and growth collapsed.

“The distinction is not academic. It is the difference between doubling living standards in a generation and going nowhere,” he said.

Fourie specifically noted the contrast between Poland’s and South Africa’s trajectories in terms of GDP per capita.

He explained that Poland embarked on its post-transition reforms in 1992, when its GDP per capita was similar to South Africa’s today.

In 1992, Poland experienced the Balcerowicz Plan’s shock therapy, triggering a sharp transformational recession.

Fourie explained that average per capita growth in the European nation swung from -0.6% before reform to 6.0% after.

In addition, unemployment rose during the transition, peaking above 20% in the early 2000s, before falling sharply to around 7% after European Union accession in 2004.

“Twenty years later, Polish living standards had doubled. South Africa, by contrast, has averaged near-zero per capita growth over the past decade,” he said.

Fourie warned that if this trajectory is sustained, it would leave living standards essentially unchanged a generation from now.

The gap between Poland and South Africa’s trajectories is evident in the graph below, highlighting what is at stake if South Africa continues on its current path.

Lessons to be learned

Fourie explained that South Africa can take notes from what worked in other countries as they embarked on post-transitional reforms in order to accelerate its own reforms.

He distilled this into three “lessons” –

• Crises create windows, but only credible settlements sustain growth
• Reform sequencing matters – infrastructure first, labour later
• Institutional anchoring and coalition coherence determine durability

Based on these lessons, Fourie also outlined a short list of four near-term priorities for South Africa’s Government of National Unity (GNU).

Firstly, he said the GNU should deliver visibly on infrastructure, including water, energy and logistics, to build credibility and reduce policy uncertainty.

President Cyril Ramaphosa has identified infrastructure development and investment as one of the government’s top priorities in the coming years.

The 2026 Budget allocated R164.1 billion to economic regulation and infrastructure. Over the next three years, total planned infrastructure expenditure will amount to R1.07 trillion.

Over half of this total spend, or R577.4 billion, will be made by state-owned companies and public entities, with funding pooled from the national budget, own revenue and private investors.

Secondly, Fourie said the GNU should agree on a shared reform scorecard that all coalition partners endorse publicly, and the government should report progress regularly.

The GNU’s current reform engine, Operation Vulindlela, has made measurable progress in accelerating economic reforms in South Africa.

However, in his 2026 State of the Nation Address, Ramaphosa said that, “although we are moving forward, we must not claim any easy victories”. 

“We are still far from where we need to be. For too many people, life remains hard. Jobs are scarce, and opportunity is out of reach.”

Thirdly, Fourie said the GNU can focus on protecting and repairing institutions like the Reserve Bank, the National Treasury, the National Prosecuting Authority, and Chapter 9 bodies like the Public Protector and Auditor-General.

This is because, according to Fourie, “these are the commitment devices that make the coalition’s bargain credible beyond the current electoral cycle”.

Lastly, he recommended that the GNU defer politically divisive reforms until the growth dividend from infrastructure delivery creates fiscal and political space.

However, he warned that the GNU must not defer these reforms indefinitely.

“South Africa’s political economy is unique in important ways – the legacy of apartheid, the depth of inequality, the structure of the labour market – that limit the applicability of any single comparator,” he said. 

“What the lessons offer is a structured way of thinking about the political prerequisites for growth – a lens for assessing whether the GNU is on a path toward prosperity or stagnation.”