One group of people costs South Africa R1.36 trillion each year

South Africa’s public servants and state-owned enterprise employees cost South Africa 17% of its gross domestic product each year.

This was one of the revelations from Efficient Group chief economist Dawie Roodt during an interview on the State of the Nation podcast.

Roodt explained that approximately 2 million civil servants work for the state in South Africa across three sectors.

• At the local government level, there are approximately 300,000 employees.

• At the national level, 1.2 million employees are paid by the National Treasury.

• There are roughly 500,000 people employed across state-owned enterprises.

“In total, that gives us approximately 2 million civil servants working for the state. They are all civil servants. Even Eskom’s CEO is a civil servant,” he said.

Roodt explained that the 2 million civil servants represents 3% of the South African population.

However, this group’s wage bill accounts for 17% of the South African economy, measured as a share of the country’s gross domestic product (GDP).

South Africa’s nominal GDP is R8 trillion. This means that the civil service salaries account for approximately R1.36 trillion.

Roodt explained that this is a highly unproductive part of South Africa, which drains a large part of its economy.

He explained that the low productivity and efficiency of the civil servants can be seen in the collapsing municipalities across South Africa.

“We need to fix the quality of the local authorities. That is a complete mess. It’s a disaster. It’s dirty,” he said.

“I’ve been to many cities and towns in South Africa, and some of them look like war zones. We have to fix that.”