In South Africa and Nigeria – sub-Saharan Africa’s two largest economies – economic sentiments have turned sharply negative since 2015, according to a new Pew Research Center report.
Around seven-in-ten South Africans and Nigerians now say their economies are in bad shape. In the East African economic hub of Kenya, the report finds, just over half say the same. And large majorities in all three countries consider the lack of employment opportunities a very big problem. â€¨â€¨Just over a year ago, the United Nations agreed to an ambitious agenda for bettering the lives of people around the world – the Sustainable Development Goals (SDGs).
The SDGs call for countries to improve across 17 issue areas, including economic growth, accountable institutions and reduced inequality, among others. While the target for achieving the SDGs is not until the year 2030, the publics in Kenya, Nigeria and South Africa are increasingly concerned about some key development issues.
At the same time, they express considerable optimism about the future. â€¨â€¨Still, many believe the political and economic system is stacked against them. Political corruption – seen by many experts as a key stumbling block to a country’s development – is a major public concern.Broad majorities in all three countries name government corruption as a very big problem.
Most South Africans, Kenyans and Nigerians believe that government is run for the benefit of only a few groups of people in society. Perhaps most troublingly, only around a third of South Africans and Kenyans say government corruption will be less of a problem in their countries when today’s children grow up. Nigerians are more optimistic that there will be less corruption in the future – 60% expect things to improve. â€¨â€¨
In the economic realm, most see rewards and opportunities going primarily to those at the top. Majorities in all three nations say the gap between rich and poor has increased over the past five years. And when asked why so many people lack jobs in their country, the top reason given is that many jobs go only to people with connections. â€¨â€¨Despite these concerns, there is considerable optimism about the future across the three nations surveyed.
At least six-in-ten in each country say health care and education – two key issue areas that are highlighted by the SDGs – will be better for the next generation. And even though their views about the current state of the economy are negative, most are upbeat about the short-term economic future: Majorities in Nigeria, South Africa and Kenya believe their countries’ economies will improve in the next 12 months.
Moreover, roughly three-in-four Nigerians, Kenyans and South Africans believe that young people today who want to live a good life should stay in their countries rather than move abroad. â€¨â€¨These are among the key findings of a new Pew Research Center survey, conducted in South Africa, Nigeria and Kenya among 3,330 respondents from March 29 to July 9, 2016. Additional key findings in the report include:â€¨â€¨South Africa: South Africans are more dissatisfied with the way things are going in their country in 2016 than they were at any time the question was asked in the past eight years.
Whereas South Africans were split on their country’s direction in 2014 (47% satisfied, 49% dissatisfied), 74% now say they are unhappy with the way things are going and only 24% are satisfied. The poor state of the economy may be one driver of the souring mood in South Africa. A large majority (70%) describes the economy as bad, with 45% saying it is very bad. â€¨â€¨Kenya: While Kenyans are generally optimistic about the future, they still say a range of development issues pose serious challenges for their country today.
At the top of the list, with at least eight-in-ten Kenyans saying each is a very big problem, are government corruption (91%), economic issues such as a lack of employment opportunities (87%) and poverty (86%), and crime (82%). â€¨â€¨Nigeria: Poverty is the top issue for Nigerians, with 93% saying it is a very big problem in their country.
Energy shortages (e.g., blackouts or fuel scarcity), crime, government corruption and a lack of employment opportunities round out the top five concerns, with roughly nine-in-ten citing each as a very big problem. Over the past year, there have been food shortages in northern Nigeria and concerns about this issue have risen since our 2015 poll.
Lack of public participation in politics was the only issue tested not viewed as a very big problem by a majority of Nigerians. â€¨â€¨Models for Development: When South Africans, Nigerians and Kenyans are asked about the best example of an economically developed country, they tend to cite the U.S. and China.
And when asked what makes the U.S. or China the leading model for development, many respondents note the economic opportunities and growth in the two nations. Beyond this, however, people provide very different rationales for what makes the U.S. or China the best example. Respondents who name the U.S. tend to focus on American governance, citing good leadership and low levels of corruption, as well as education, as reasons why the U.S. is economically successful.
People who think China is the best example of an economically developed nation attribute this to Chinese technology, as well as the country’s manufacturing and exports and its work ethic. â€¨â€¨Pew Research Center is a subsidiary of The Pew Charitable Trusts, its primary funder. This report was made possible by The Pew Charitable Trusts, which received support for the survey from the Bill & Melinda Gates Foundation.y7
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”