Sygnia founder and CEO Magda Wierzycka said the acceleration of South Africa’s downward spiral under President Cyril Ramaphosa could be described as State Capture 2.0.
Wierzycka told SABC News that under former President Jacob Zuma, South Africa faced high levels of unemployment, load-shedding, and poor economic growth.
There was also widespread corruption throughout the government, which became known as “State Capture”.
“When Cyril Ramaphosa came into power, the country had an expectation that there will be a solid economic policy on the table that corruption will be dealt with,” she said.
There were high hopes that the damage under Zuma would be reversed and that the country would be put on a growth path. “We were completely naïve,” she said.
“Instead of economic growth and good governance, the country just started spiralling downwards. I call it State Capture 2.0,” Wierzycka said.
The country now faces record levels of unemployment, daily power cuts, and people using their savings to provide services that are the government’s responsibility.
She pointed to the recent cholera outbreak in Tshwane as an example of the impact of crumbling infrastructure in South Africa.
The country also suffers because of skills emigration, being greylisted by the Financial Action Task Force (FATF) and facing an uncertain future because of its close ties with Russia.
Wierzycka said South Africa’s stance on Russia has already collapsed the currency and risks sanctions against the country.
Should South Africa be hit with international sanctions, many countries will stop trading with us, and there will be a massive outflow of capital.
“Who could have envisaged that what was happening under Zuma would just escalate and increase under Cyril Ramaphosa,” she said.
South Africa a failed state
Wierzycka said South Africa is already a failed state, and nothing is on the horizon that would change the situation.
She argued that decreased economic activity, which includes no jobs being created, is a sign of a failed state.
“We have record levels of unemployment. We have a collapsing education system. We are condemning another generation of youth to unemployment,” she said.
South Africa is also bleeding skills through emigration, and there is a big outflow of foreign investments.
“The global community does not believe that we have sufficient controls to prevent money laundering and funding of terrorist activities,” she said.
“There are no international companies which are willing, in any meaningful way, to invest money into building factories in South Africa.”
She said municipalities, which form the backbone of South Africa’s government, cannot provide basic services like water and electricity.
Municipalities are essential as they are constitutionally mandated to procure and provide critical services to citizens.
Besides daily power cuts due to load-shedding and infrastructure failures, the water supply is also becoming unstable.
She said 45% of water in South Africa is lost within municipal water systems due to poor infrastructure, poor maintenance, and illegal connections.
Wierzycka added that the country has become irrelevant among international investors. “They are not even researching South Africa for the purposes of investment,” she said.